Tech Check

Apple: Will iPhone Ring Up The Company's Stock?

If you're holding Apple   stock, or want to, and haven't asked these five financial questions, you should.

1. What if the iPhone is a bust? What will that do to Apple stock?
"If the device doesn't hit, and continue with a real strong bang, people might be deflated here," says Jonathan Hoopes at ThinkEquity. "Believing that the iPhone, if it's not as successful as those who think it will be, is gonna bring the down the company's other businesses."

In other words, a bet-the-company product and if it doesn't perform, that "popping" sound will be Apple stock.

2. What's the best-case scenario for the iPhone, and what would that do to Apple shares?
"It's important that it gets off to a fast start, we think that it will get off to a fast start and we think momentum will only build over the next 12 months," says Piper Jaffray's Gene Munster.

In fact, as I previously reported, Piper projects $15 billion in iPhone sales in 2009, on 45 million units shipped. That would eclipse Apple's Mac business, projected at $13 billion that year. But since so much of that optimism is already built into Apple stock at this point, Apple's got its work cut out for it to build on those gains.

3. What does iPhone mean for other smart phone makers and their stocks?
"It really redefines the cell phone and the handheld device into a powerful new platform and that alone makes it very difficult for the traditional smart phone vendors to compete," says Tim Bajarin at Creative Strategies.

Which is likely why companies like Palm  , Nokia , and Motorola   haven't done much, stoclk-wise, with many investors keen on the head-to-head battle shaping up between BlackBerry maker RIMM   and Apple.

4. Will iPhone cannabalize other iPod sales?
In a word, yes, especially sales of the lower capacity models. But Street analysts say Apple will more than make up for the hit to volume with the increased price-points for iPhone.

5. How important is iPhone to AT&T stock?
Very. "Of the 1 million people who have contacted AT&T , research is showing us that nearly 40 percent of them are not AT&T wireless customers today," says Randall Stephenson, AT&T CEO.

That's an amazing stat, indicating that AT&T is getting a huge amount of customer traffic from its Apple relationship. Also, some Wall Street firms estimate that AT&T will enjoy 4.5% gross margins from the sale of every handset. That's a dramatic departure for an industry that typically has to subsidize new handsets by several hundred dollars hoping to make it up with service contracts. AT&T will actually make a profit on handset sales.

And that's on top of the big-time data business iPhone is expected to generate.

The iPhone will cast a long shadow. Now everyone's waiting to see just how tall this gizmo will stand.

Questions?  Comments?