Apple investors were reported to be worried about the telecom operators' plan to slash subsidies. Concerns regarding the lack of boost for iPhones continued to grow as telecoms compete with each other regarding better offers.
Original equipment manufacturer would normally venture with a wireless carrier so that it could make a lower entry cost for users who wanted to purchase a smartphone. Most markets would subsidize the real cost of a gadget by making a two-year contract.
An evolving smartphone market was expected to influence carriers however, analysts said that the carriers' shift to offer the actual price of a device would provide more impact to the makers of smartphones. "As customers see the writing on the wall and see that phone subsidies are coming to an end, I think that a lot of them are going to run out and upgrade right now which will drive sales of the iPhone 5 before even the release of the iPhone 5S," Doug Ehrman said when he was interviewed by The Motley Fool.
Wireless carriers' plan to upgrade their offers would boost iPhone sales. This was due to the fact that buyers would no longer worry about being trapped in a carrier's service plan with an obsolete phone. The sales of iPhones would typically decline before the latest model is expected to be available. With the upgrade, Ehrman noted that Apple was given an incentive to accelerate its "slower product cycle." Apple recently predicted that it would earn US$34 billion to US$37 billion in the fourth quarter. The figure was said to be achievable with a new product and promos presented by carriers.
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