Analyst: iPhone sales could double on Verizon
updated 07:00 pm EDT, Mon June 1, 2009
iPhones could double on VZ
Although Apple's exclusive deal with AT&T is expected to last at least through 2010, Bernstein Research analysts Craig Moffett and Toni Sacconaghi claim iPhone sales could double if the device was also distributed by Verizon. The catch, however, would be a drop in subsidies attached to each phone. While AT&T has been estimated to pay a $450 subsidy per device, a non-exclusive deal would likely bring the value down to around $250 to $350.
Verizon CFO John Killian declined to comment on the iPhone, although he did not explicitly deny the possibility of a future deal. A separate report suggests the carrier has been in talks with Apple since before CEO Steve Jobs left on a medical leave of absence.
Apple CFO Peter Oppenheimer and senior Mac manager Tom Boger recently explained that Apple has been satisfied with iPhone sales in a number of countries where the handset is available from multiple carriers. The executives claimed that a Verizon deal is unlikely in 2010 because the carrier uses CDMA technology, while the current iPhone model is compatible with GSM networks.
To overcome the compatibility hurdle, Apple could produce a CDMA variant or wait until both carriers transition to the LTE standard in 2011. Although Verizon is expected to launch LTE slightly ahead of its competitors, a CDMA-compatible phone would still be necessary until the upcoming technology reaches the broader market.
AT&T CEO Randall Stephenson is said to be involved in discussions with Apple to extend the exclusive iPhone deal into 2011. Both companies have not publicly disclosed the terms of the current deal.
Way to state the obvious
06/01, 09:37pm reply
Boy, I'm a high priced analyst and I predict obvious things! Let's see...AT&T has roughly half the US cell phone subscribers and Verizon has the other half...so if iPhone is on Verizon too, they can double their sales! What a theory!
snork
Fresh-Faced Recruit
Joined: Feb 2008
It could be better than
06/02, 12:26am reply
It could be better than half for Verizon. There are a lot of people who would bolt from AT&T if Verizon offered the iPhone. Better networks make a difference.
jdonahoe
Fresh-Faced Recruit
Joined: Jul 2006
Better now
06/02, 02:04am reply
Verizon may have a better CDMA network now, but during their transition to LTE, they won't be able to easily match AT&T's future coverage of LTE HSPA EDGE. They would need an iPhone with a CDMA chip-set, or their iPhone customers would be rather disconnected.
I mean look at the situation right now. Verizon's CDMA is a patchwork of EVDO and older 1XRTT systems, bridged with roaming agreements on carriers with even older CDMA standards. The iPhone will work on none of these. Verizon cannot afford to roll out LTE everywhere at once, nor could they shut down their old system until all of their CDMA subscribers ditch their old phones. Think of the customer relation problem when two Verizon customers are standing side-by-side when the one who shelled out for a VZW iPhone has no signal, but the other has 4 bars of EVDO service.
-- Len
LenE
Fresh-Faced Recruit
Joined: May 2004
CDMA version
06/02, 09:48am reply
Odds are Apple would just build a CDMA version. If Motorola could justify the cost with even their dinky phones, and RIM can justify it with half their BlackBerries I think Apple could hire a few other people for the project to make up a couple million more in sales.
Salty
Professional Poster
Joined: Jul 2005
userbase
06/02, 01:25pm reply
It could be better than half for Verizon. There are a lot of people who would bolt from AT&T if Verizon offered the iPhone. Better networks make a difference.
But that's not what is being said. Supposedly adding Verizon would double the market share. I doubt it, as a lot of people jumped to ATT to get an iPhone. Many would jump back to Verizon, even if they have to get a new phone in the process. But I seriously doubt there are that many Verizon users out there drooling over the iPhone but hating Verizon wireless. There are some, but certainly not enough to double their market share.
testudo
Fresh-Faced Recruit
Joined: Aug 2001