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Apple's Verizon iPhone could cannibalize 6.5M sales from AT&T

post #1 of 32
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Though the arrival of the iPhone on Verizon is expected to increase overall U.S. iPhone sales for Apple, the effect on carrier AT&T is expected to be significant.

Analyst Gene Munster with Piper Jaffray said in a note to investors on Monday that he believes the launch of a Verizon iPhone will increase total 2011 U.S. handset sales for Apple by 2.5 million, a number he cautioned "may be conservative." In all, Munster sees AT&T selling 11 million iPhones, and 9 million from Verizon.

But if the iPhone didn't debut on Verizon in 2011, Munster said AT&T alone would likely sell 17.5 million of Apple's handset in the 2011 calendar year.

Munster sees Verizon activating 25 million total smartphones in calendar year 2011. If Apple does indeed account for 9 million, the handset maker would sell 36 percent of the smartphones on Verizon's network.

Munster's model places Apple with a much lower share of smartphone sales that the iPhone currently enjoys at AT&T. In the September 2010 quarter, Munster estimates that the record 5.2 million iPhones activated by AT&T accounted for about 80 percent of all smartphones sold by the carrier.

In a best-case scenario, Munster said AT&T could break even with 2010 and sell 15 million iPhones, and Verizon could match that sum. If that were to happen, it would add 10 million iPhone sales to Munster's 2011 projections, amounting to $5.9 billion in revenue and $1.27 earnings per share.

Kaufman Bros.

In addition, analyst Shaw Wu with Kaufman Bros. issued a note to investors on Monday in which he said Verizon arguably needs the iPhone more than Apple needs Verizon.

"The reason that VZ arguably needs the iPhone now more than ever is as it has lost share to AT&T over the last two quarters as Android momentum slows here in the U.S. (as per carrier subscriber data)," he said. "We also believe VZ is willing to pay to keep the iPhone exclusive on its network and AT&T. Because of this, we believe the iPhone isn't likely to appear on T-Mobile USA and/or Sprint until later."

Wu sees the Verizon iPhone adding an incremental 2 million to 3 million units per quarter, or 8 million to 12 million on an annual basis. If this prediction holds accurate, it could add between $1.00 and $2.00 earnings per share for Apple, an increase of between 5 and 10 percent in the 2011 calendar year EPS forecast from Kaufman Bros.
post #2 of 32
Quote:
Originally Posted by AppleInsider View Post

Analyst Gene Munster with Piper Jaffray said in a note to investors on Monday that he believes the launch of a Verizon iPhone will increase total 2011 U.S. handset sales for Apple by 2.5 million, a number he cautioned "may be conservative." In all, Munster sees AT&T selling 11 million iPhones, and 9 million from Verizon.

Has anyone ever done a tale of the tape on this nut-job Gene Munster? Is he ever close with all these attention grabbing claims? I really wish AI would stop using his remarks every week.
post #3 of 32
I think they are chasing pink unicorns over rainbow bridges.

The first thing I intend to do, as soon as I determine that Verizon has stock on hand (or I can order from Apple) - I will sell my current iPhone 4, and take the proceeds from that sale and give it to AT&T to shove up the oriface of their choice, so I may terminate my contract.

Then, I'll walk my happy self down to Verizon and buy another iPhone 4 from them.

I travel a lot - I cannot get AT&T data coverage at Salt Lake International Airport, Minneapolis International Airport and only sporatically at Baltimare, Ronald Reagan and JFK. Freakin' International Airports!!! Does AT&T actually believe that International travelers do not want to use their AT&T smartphones at the airport?!

My iPHone4 is practically useless at work, poor coverage. When I go skiing, the only phones that work at the resorts are using Verizon or Cricket. Now ask yourself, if you ski and get hurt - and your cell phone has no coverage - what do you do aside for scream for help?

I think AT&T is going to lose A LOT more than what they are letting on. Arrogance and incompetence are going to have large vote at the end of this month. And a lot of customers are going to vote with their feet - I will be but one of millions.
post #4 of 32
I think AT&T might become a little more competitive if this started to become likely. We have had zero choice till this occurs so I have to think we were not exactly getting AT&Ts best possible pricing. Competition will be interesting
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post #5 of 32
I don't think it will hurt AT&T much. Verizon has a bunch of Droid users that are not happy with how updates are being pushed and that's where iPhone is going to make a big impact.
post #6 of 32
Quote:
Originally Posted by Hodar View Post

The first thing I intend to do, as soon as I determine that Verizon has stock on hand (or I can order from Apple) - I will sell my current iPhone 4, and take the proceeds from that sale and give it to AT&T to shove up the oriface of their choice, so I may terminate my contract.

post #7 of 32
Amen..
post #8 of 32
Quote:
Originally Posted by Hodar View Post

I travel a lot


I hope that all of your travel is domestic....or else keep the AT&T iPhone for international coverage. You sound like a heavy user....may want to buy 2 iPhones from Verizon....1 for voice and 1 for data

AT&T has 93 million customers...I'm sure not everyone is happy.

I think that the Verizon iPhone will mostly 'steal' customers away from Verizon Android customers.
post #9 of 32
Quote:
Originally Posted by noexpectations View Post

I hope that all of your travel is domestic....or else keep the AT&T iPhone for international coverage. You sound like a heavy user....may want to buy 2 iPhones from Verizon....1 for voice and 1 for data

AT&T has 93 million customers...I'm sure not everyone is happy.

I think that the Verizon iPhone will mostly 'steal' customers away from Verizon Android customers.

You really think SJ is going to release an iPhone for Verizon that is unable to do voice and data simultaneously? I may have to eat my words but I can't see that happening.
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post #10 of 32
which system you are on. My phone is through work and Verizon and my wife's phone is separate and it is an iPhone through ATT. There are times where I don't get a signal at all with Verizon and there are areas where my wife doesn't get a good signal. I think both networks have problem areas. And I am going to guess that in certain high use areas, if Verizon takes a certain amount of traffic from ATT, ATT service is going to be better and Verizon's service is going to suffer.

Since I am limited by work to Verizon, when the new phone comes out, I will switch my phone to an iPhone when/if it is available on Verizon. But I am not under the illusion that it will make my service better or worse in the areas of low/poor signal strength.

As to Munster, he is one of the original Apple bulls from way back. He would have his people do some nice research at Apple stores seeing what was being bought over a period of time so he was always interesting. I don't know how he models that ATT will lose 6 million customers but as an analyst, that is what he does, he analyzes and predicts. I don't believe he has been very accurate as of late, especially since there have been many more analysts that follow Apple now who have a much better accuracy record at predictions. It will be interesting to see what the other analysts say and what actually happens.

But no matter what, this is all good news for Apple and its shareholders which is the bottom line. Selling more phones is a good thing, which is going to happen no matter what Munster says unless the whole economy goes to pot. And if they sell more phones, I am going to guess that means they will sell more iPads, iPod touches and and Macs.

Neal
post #11 of 32
Including me.
post #12 of 32
I think once the iPhone is available on big V they will sell at lease 15million iphones the first year. I think 11 million on Att is respectable although i think once you account newbies into the smartphone world don't be surprised if they sell around 15 million too.

What about Sprint or T-Mobile though? Are they not going to be allowed to sell iphones?? That would be stupid of Apple when worldwide it's selling sim free. I would have told big V either take it or leave it. I'd rather sell to Sprint and T-Mobile than only to Verizon. If they really come out with another exclusive agreement and the only carriers to officially carry the iphone are ATT and Verizon then Apple has really lost its mind.

They need to make the iphone available on all carriers and sim free at the apple store like in Europe. And make it cheaper by 100 bucks!
post #13 of 32
is all about market shares. Everybody (Google Android & Microsoft Windows) is looking to gain more market shares. With the daily insane release of smartphones, Apple cannot limit the iPhone to only 1 US carriers. The telecommunication laws in Europe & Asia forbidden them to do such practices. I believe the FCC should the rules in US to allow equal competition. I am sure At&t knew this will come sooner or later (they had to be prepare for this. The general public knew it will happen. When, was the only question). I hope they were prepared for it.
We all want to see the US economy moving in the right direction. This will be good news on the stock market. At&t will eventually find ways to growth and perhaps improve their network that has been so criticized in this past decade.
I doubt will see the BIG switch that everybody is talking about from At&t to Verizon. In my opinion, it will be Sprint & T-Mobile.
post #14 of 32
I won't give up my 3G ATT Iphone to go back to the 1990's to use a CDMA Iphone on verizon.
A Verizon Iphone will be a joke.
post #15 of 32
Quote:
Originally Posted by HappyAppleUser View Post

I won't give up my 3G ATT Iphone to go back to the 1990's to use a CDMA Iphone on verizon.
A Verizon Iphone will be a joke.

How about a 4G iPhone?
post #16 of 32
Quote:
Originally Posted by noexpectations View Post

I hope that all of your travel is domestic....or else keep the AT&T iPhone for international coverage. You sound like a heavy user....may want to buy 2 iPhones from Verizon....1 for voice and 1 for data

Agreed, big-time. No idea how a Verizon phone would behave in the EU, and I certainly wouldn't want to find out the hard way... I go there too damned often. :/
post #17 of 32
Quote:
Originally Posted by TheShepherd View Post

How about a 4G iPhone?

Sure. Show me an actual 4G network and give me a CDMA/GSM/LTE chip that doesn't make my battery last three hours and you have a deal.

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post #18 of 32
I am staying with my great AT&T service, Rollover minutes and FAST 3G service that's absolutely perfect in my area.
3mbs down 1.5mbs up on average.
Not paying for Visual voicemail at $2.99 a month that vzw breaks off the phone then charges for you to get it back.

I have 5 bars at work, home and everywhere in between.
Crazy part is I had I vzw phone when I worked for the company a year or two ago and the service was so bad I gave it to my wife, then my wife gave it to my step daughter, then step daughter asked for an iphone because she didn't like vzw service either.
All 3 of us worked in dif locations and none of us liked it better than AT&T.
The voice quality was horrible compared to AT&T, 3G was so slow it was like watching a snail race.
And yes, the area where I live is covered in RED on the map. I should have been getting perfect service where I live in the south east.
In my house, no internet at all on vzw, even though map says I should have been in "best" network area.

Needless to say, I wouldn't take a vzw iphone if they offered to buy out my AT&T contract and give me 3 iphones for myself and my family for free.
As far as vzw LTE. I will bet the farm LTE iphone wont be out until summer 2012.
Prior to that happening, not being able to Talk and Surf at the Same time seems like a big step backwards.


One good thing about all this! If you plan to stay with AT&T, there should be a lot of iphone 4's on sale on ebay for those that want to drink the VZW red koolaid.

Funny part of all this, there is nothing saying for SURE vzw is even getting the phone. Just because vzw has a meeting tomorrow, doesn't mean they will for sure announce a vzw iphone.
I always thought APPLE would be the one to announce this fact on their own home grounds.
post #19 of 32
Quote:
Originally Posted by Hodar View Post


My iPHone4 is practically useless at work, poor coverage. When I go skiing, the only phones that work at the resorts are using Verizon or Cricket. Now ask yourself, if you ski and get hurt - and your cell phone has no coverage - what do you do aside for scream for help?

I've never met anyone that had coverage towards the summit of a ski area, only at the bottom.
post #20 of 32
Personally I think you are delusional. I have no idea why YOUR phone doesn't work at those airports. Mine has worked at all of them and more.

Further, if you are skiing and get hurt why are you reliant upon you cellphone for help. That sounds like a bad move. If you are on public slopes I'm sure help is about 100 yards away. If you are making free runs I'd say you should carry around a Sat phone or a police radio. Why should you expect a cellphone to work in the Rockies? You're just putting yourself at risk if you are reliant upon consumer tech in the wilderness.

So go ahead and walk to Verizon and get your new phone, Wouldn't be the first bad idea you've had.

Quote:
Originally Posted by Hodar View Post

I think they are chasing pink unicorns over rainbow bridges.

The first thing I intend to do, as soon as I determine that Verizon has stock on hand (or I can order from Apple) - I will sell my current iPhone 4, and take the proceeds from that sale and give it to AT&T to shove up the oriface of their choice, so I may terminate my contract.

Then, I'll walk my happy self down to Verizon and buy another iPhone 4 from them.

I travel a lot - I cannot get AT&T data coverage at Salt Lake International Airport, Minneapolis International Airport and only sporatically at Baltimare, Ronald Reagan and JFK. Freakin' International Airports!!! Does AT&T actually believe that International travelers do not want to use their AT&T smartphones at the airport?!

My iPHone4 is practically useless at work, poor coverage. When I go skiing, the only phones that work at the resorts are using Verizon or Cricket. Now ask yourself, if you ski and get hurt - and your cell phone has no coverage - what do you do aside for scream for help?

I think AT&T is going to lose A LOT more than what they are letting on. Arrogance and incompetence are going to have large vote at the end of this month. And a lot of customers are going to vote with their feet - I will be but one of millions.
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post #21 of 32
Then about a month later when your bill comes you will likely be complaining on this board how awful Verizon is because it is over billing you, the customer service doesn't want to do anything about it, and the device works, but not as well.

Verizon in some parts of the Country does have a more developed voice infrastructure, but AT&T has the better data infrastructure.

For your sake, I hope I am wrong, but Verizon has screwed me too many times to suspect otherwise.


Quote:
Originally Posted by Hodar View Post

I think they are chasing pink unicorns over rainbow bridges.

The first thing I intend to do, as soon as I determine that Verizon has stock on hand (or I can order from Apple) - I will sell my current iPhone 4, and take the proceeds from that sale and give it to AT&T to shove up the oriface of their choice, so I may terminate my contract.
post #22 of 32
Funny. My boss offered to buy me out of my T-Mobile contract and pay for my cell phone. It was on Verizon, I said thank you, but no thanks. I am happy using my iPhone (on T-Mobile).

Quote:
Originally Posted by eyepad View Post

Needless to say, I wouldn't take a vzw iphone if they offered to buy out my AT&T contract and give me 3 iphones for myself and my family for free.
post #23 of 32
I suspect Apple will bring T-Mobile into the mix when the iPhone 5 comes out. It would have to update the current iPhone to allow users to use T-Mobile's 3G data. At least I hope I am right, because I am on T-Mobile. Unlocking is somewhat of a pain when you want to update your software.

Quote:
Originally Posted by lav1daloca View Post

What about Sprint or T-Mobile though? Are they not going to be allowed to sell iphones?? That would be stupid of Apple when worldwide it's selling sim free. I would have told big V either take it or leave it. I'd rather sell to Sprint and T-Mobile than only to Verizon. If they really come out with another exclusive agreement and the only carriers to officially carry the iphone are ATT and Verizon then Apple has really lost its mind.

They need to make the iphone available on all carriers and sim free at the apple store like in Europe. And make it cheaper by 100 bucks!
post #24 of 32
Just looking at Munsters comments and as usual they don't thread water. Purely a guesstimate.
post #25 of 32
Quote:
Originally Posted by fraklinc View Post

I don't think it will hurt AT&T much. Verizon has a bunch of Droid users that are not happy with how updates are being pushed and that's where iPhone is going to make a big impact.

Ultimately this will be the much bigger story...

Quote:
Originally Posted by spliff monkey View Post

Personally I think you are delusional. I have no idea why YOUR phone doesn't work at those airports. Mine has worked at all of them and more.

Further, if you are skiing and get hurt why are you reliant upon you cellphone for help. That sounds like a bad move. If you are on public slopes I'm sure help is about 100 yards away. If you are making free runs I'd say you should carry around a Sat phone or a police radio. Why should you expect a cellphone to work in the Rockies? You're just putting yourself at risk if you are reliant upon consumer tech in the wilderness.

So go ahead and walk to Verizon and get your new phone, Wouldn't be the first bad idea you've had.

Mine works fine at every airport he listed as well.

Matt
post #26 of 32
Not only is the iPhone on Verizon going to cannibalize sales from AT&T, but from Motorola. Who's really going to buy a Droid now, except for maybe the people who hate Apple?
post #27 of 32
Quote:
Originally Posted by DV1Band View Post

Not only is the iPhone on Verizon going to cannibalize sales from AT&T, but from Motorola. Who's really going to buy a Droid now, except for maybe the people who hate Apple?

I think AT&T will be the least hurt by a Veizon iPhone. Remember, they will still sell the iPhone wnd will have about 1/5 of their users under contract with the iPhone.

The carriers that will be most affected are T-Mobile and Sprint where users who couldnt or wouldnt use AT&T stayed where they were. But with Verizon on board the migration from those carriers will happen yet again.

I think Verizons other smartphones will be heavily affected, too. Verizon may even help this by pushing the iPhone themselves. With the number of carriers and countries selling modern smartphones I dont expect their numbers to be much lower. I do expect there sales on Verizon to be considerably hit, but not overall.
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post #28 of 32
Quote:
Originally Posted by TBell View Post

I suspect Apple will bring T-Mobile into the mix when the iPhone 5 comes out. It would have to update the current iPhone to allow users to use T-Mobile's 3G data. At least I hope I am right, because I am on T-Mobile. Unlocking is somewhat of a pain when you want to update your software.

I think you will be waiting until at least 2012. If the Verizon iPhone is an ATT workalike and without Verizon branding, Apple would have had to give them at least 8 months (more likely, a year) semi-exclusive with ATT.
post #29 of 32
Quote:
Originally Posted by solipsism View Post

The carriers that will be most affected are T-Mobile and Sprint where users who couldnt or wouldnt use AT&T stayed where they were. But with Verizon on board the migration from those carriers will happen yet again.

I am still not convinced of this. So many Sprint and T-Mobile subscribers made their carrier choice based on service plan price. Add in the fact that it is currently possible to use an iPhone on T-Mobile (even if it is far less capable) and I think the biggest chunk of Verizon iPhone adopters are in-network.
post #30 of 32
Quote:
Originally Posted by penchanted View Post

I am still not convinced of this. So many Sprint and T-Mobile subscribers made their carrier choice based on service plan price. Add in the fact that it is currently possible to use an iPhone on T-Mobile (even if it is far less capable) and I think the biggest chunk of Verizon iPhone adopters are in-network.

Yes, the biggest chunk will be from Verizon non-iPhone users becoming Verizon iPhone users, but that isn’t going to affect Verizon negatively. Quite the opposite. It will affect the other devices being sold on Verizon’s network, but I addressed that.

Anecdotally, I know many people that don’t have an iPhone because of AT&T, all for various reasons. Hence, I firmly believe that Sprint and T-Mobile will suffer more damage than AT&T, who will still have the iPhone.
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post #31 of 32
I dunno, I have a hard time believing that Verizon sales will match ATT sales anytime soon. Verizon has spend so much time working with Android manufacturers and plugging them in their ads, that I feel like a lot of Verizon users are content with Android devices.

In short I predict that Verizon sales will increase iPhone sales by 20% at best in the short term, at least until iPhone 5 comes out.

PS I don't really care about how this affects Verizon or ATT, I just want iPhone to keep a solid market share and continue to bring about awesome iOS innovations.
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post #32 of 32
Quote:
Originally Posted by lav1daloca View Post

I think once the iPhone is available on big V they will sell at lease 15million iphones the first year. I think 11 million on Att is respectable although i think once you account newbies into the smartphone world don't be surprised if they sell around 15 million too.

What about Sprint or T-Mobile though? Are they not going to be allowed to sell iphones?? That would be stupid of Apple when worldwide it's selling sim free. I would have told big V either take it or leave it. I'd rather sell to Sprint and T-Mobile than only to Verizon. If they really come out with another exclusive agreement and the only carriers to officially carry the iphone are ATT and Verizon then Apple has really lost its mind.

They need to make the iphone available on all carriers and sim free at the apple store like in Europe. And make it cheaper by 100 bucks!


When are people going to realize that Apple (or any other company) won't lower the price on any product that they can't make enough of to meet the current demand to start with.

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