TEXT OF INTERVIEW

Bill Radke: Apple reports earnings today after the market closes, and the numbers are expected to look great, again. Apple is that rare company whose stock is higher today than it was two years ago when the Dow was at its peak. So, are there any worms threatening this company? On the line with us is James McQuivey. He follows Apple as an analyst with Forrester Research. Good morning.

James McQuivey Good morning.

Radke: Right now the iPhone comes exclusively with AT&T as the carrier. When that contract expires next year, is that going to be good for Apple or bad?

McQuivey: No matter what comes out of this it’s going to be good for Apple. Because either AT&T is going to step up and pay a hefty sum to make sure they maintain their exclusivity with Apple. Or AT&T is going to not be able to afford it and as a result Apple will be able to shop around and get a few more providers, certainly someone like a Verizon or a Sprint would be very eager to get in on the action and would pay for the privilege to do so.

Radke: And would that carrier competition make the iPhone any cheaper for consumers?

McQuivey: Probably in the end slightly cheaper. Where it’s going to be cheaper is on the data plans, probably for lower speeds.

Radke: Verizon just launched an ad for its upcoming phone using Google’s Android operating system. There’s already an Android phone with T-Mobile. How big a threat does Google’s Android pose to Apple?

McQuivey: In the short run, it’s not much of a threat at all. The smartphone market is going to grow dramatically. However, if Android is successful, it will be successful because anyone can develop applications for it that don’t have to be approved by Google, and that’s not the case with the iPhone. And so if Google is in a position to say, “Hey, let’s have a dozen or two dozen carriers use our phone operation system ,and lets let thousands of developers develop applications for it,” you might see — three or four years from now — a world where there are many more Android phones than there are iPhones.

Radke: Anaalyst James McQuivey at Forrester Research. Thank you.

McQuivey: Thank you.