Science & Technology
Science and Technology
Science and Technology
Fri, July 2, 2010
Thu, July 1, 2010
Apple, Verizon, Vodafone, AT&T and Research In Motion
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Apple Inc (Nasdaq : [ AAPL ]), Verizon Communications (NYSE: [ VZ ]), Vodafone Group Plc (Nasdaq: [ VOD ]), AT&T Inc (NYSE: [ T ]) and Research In Motion Ltd (Nasdaq: [ RIMM ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Will Verizon Sell the iPhone?
The wireless industry is buzzing with rumors that Verizon Wireless, the largest U.S. mobile-phone company, will start selling Apple Inc's (Nasdaq : [ AAPL ]) iPhone in January 2011. Verizon Wireless is a venture between Verizon Communications (NYSE: [ VZ ]) and Vodafone Group Plc (Nasdaq: [ VOD ]).
If the rumor proves true, AT&T Inca™s (NYSE: [ T ]) exclusive hold on the iPhone will end, giving Apple an opportunity to expand the availability of the product through other mobile service providers. Several researchers estimate that Verizona™s release of the iPhone will drive Applea™s U.S. sales higher by at least 5 million units in 2011.
The anticipated alliance with Verzion Wireless will also provide Apple a stronger position over its rivals such as Research In Motion Ltd (Nasdaq: [ RIMM ]), whose smartphones are currently promoted by Verzion Wireless. The availability of Applea™s iPhone through Verizon may drive down market share of Research In Motion.
Verizona™s biggest rival AT&T is the leader in selling iPhone in the U.S. since June 2007. The iPhone facilitated AT&T by adding more subscribers even when the U.S. mobile-phone market was nearing saturation. In the first quarter of 2010, AT&T added 1.9 million subscribers, reaching 87 million total subscribers, up 11.2% year over year, driven by increased smartphone penetration (especially iPhone) and healthy adoption of connected devices. This represents the largest first-quarter net addition in the history of AT&T.
However, while iPhones are delivering strong growth momentum, high marketing costs associated with the products (especially due to the heavy subsidy associated with iPhone 3G/3GS) have been affecting AT&Ta™s earnings. AT&T is currently paying a hefty subsidy of approximately $300 per phone to Apple, which is dilutive to the companya™s earnings.
Verizon is involved in an increasingly expensive promotional campaign against AT&T to aggressively position its newly launched Droid against AT&Ta™s iPhone. The opportunity to sell iPhones will provide a significant impetus for Verizon to boost its bottom line.
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