Apple is working on “an iPod with phone functions” and could use Taiwanese electronics manufacturer Hon Hai Precision to build the device, says Johnny Chan, a J.P. Morgan analyst based in Hong Kong. Barron’s Online reports [paid sub. req.]: “Apple still hasn’t decided whether to give the contract for what’s being referred to as an ‘iPhone’ to Hon Hai or to another manufacturer, says Ellen Tseng, a Morgan Stanley analyst in Taipei. One analyst in Taipei who declined to be identified said Taiwan Green Point Enterprises, which makes plastic cases for the iPod, is in talks with Apple for a role in the phone.”
Bill Shope of J.P Morgan believes Apple will introduce the phone by the fourth quarter of this year. Piper Jaffray analyst Gene Munster told clients last week that he estimates there to be a 75% chance that we’ll seen an iPhone in the next 12 months.
Analysts believe that if Apple does come out with a music-playing cell phone, it will likely have the biggest impact on Motorola, the leading cell phone maker in the U.S. “Even a modest showing for an Apple multimedia cellphone could put a dent in Motorola’s profits,” Barron’s says. “If Apple were to grab just 1% of the 900 million phones expected to be sold worldwide this year, it would equal nine million units. At Motorola’s average selling price of $147 per handset, it would represent $1.3 billion in missed opportunity.”