Verizon could sell 12M iPhones a year, but don't 'pop the champagne'

Posted:
in iPhone edited January 2014
A Verizon-compatible CDMA iPhone could result in at least 12 million new unit sales for Apple next year, one Wall Street analyst believes, though he's not convinced the deal will actually happen in January 2011.



Yair Reiner of Oppenheimer cited a new report from Bloomberg this week, which cited two unnamed sources in reporting that a Verizon iPhone is expected to arrive from Apple in January of 2011. Such a move, which has been rumored for some time, would mark the end of iPhone exclusivity for rival wireless carrier AT&T.



But Reiner isn't completely sold on the prospect of a Verizon iPhone in early 2011. The analyst, in a note issued to investors Wednesday morning, noted that such rumors have surfaced numerous times.



"Similar speculation has emerged before, so barring independent confirmation or a press release from one of the parties, it'd be rash to pop the champagne," he wrote. "Still, it's worth considering the potential implications."



The impact for Apple would be huge, he believes, adding at least 12 million additional iPhone sales in the U.S. annually. That would amount to $7 billion in incremental revenue and more than $3 in incremental earnings per share.



"Many investors have mused about this upside, but few, we believe, have built it into their models or expectations," he said. "If this is real, it's big and it's incremental."



On AT&T alone, Apple over the last year sold 11 million iPhones to its 65 million postpaid install base of subscribers. Some of those subscribers who switched for the iPhone would inevitably move back to Verizon if Apple's handset became available on its network, Reiner said. But with Verizon's 83 million subscribers, Verizon would likely add at least 12 million net subscribers for Apple, and likely many more.



And from a strategic standpoint, Yainer said he believes it makes sense, as adding Verizon would "significantly blunt the competitive threat" from Google's Android mobile operating system. Since last year, Verizon has worked closely with Google to offer some of the best Android devices in an effort to compete with the iPhone. One new handset coming soon is Motorola's Droid X.



Weighing the possibilities of an Apple-Verizon deal, Reiner noted that AT&T made some subscribers eligible for an iPhone 4 upgrade long before their two-year contract was set to expire. He said it could have been a "last-ditch effort to lock them into new contracts before Verizon came aboard," or just the fear of a possible Verizon deal could have inspired AT&T.



On the other hand, he also noted that a January handset debut would run counter to the established iPhone refresh schedule, in which Apple introduces a new handset at its annual Worldwide Developers Conference in June.



"Would Verizon just get a CDMA version of the current iPhone 4? Would it get a new iPhone? Neither scenario makes much sense given that the iPhone just got a huge upgrade and that another isn't likely before mid-2011," he said.
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Comments

  • Reply 1 of 60
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by AppleInsider View Post


    "Would Verizon just get a CDMA version of the current iPhone 4? Would it get a new iPhone?



    Stay tuned to find out!



    Same Bat Channel!



    Same Bat Time!











    Good morning all...
  • Reply 2 of 60
    lilgto64lilgto64 Posts: 1,147member
    With LTE right around the corner - and Verizon recently joining the GSMA board - I would think that some sort of LTE compatible iPhone mid year 2011 is more likely - that way production and sales of the next gen iPhone could coincide with the deployment of LTE - just a matter of synchronizing those two schedules - and perhaps in part AT&Ts plans to move to LTE.



    AT&Ts move to allow early updates could be nothing more than increasing the pool of potential buyers for new hardware.
  • Reply 3 of 60
    Heeeeere we go again! Believe it when I see it.



    Verizon is definitely better, but they rape your wallet for it. Two power hungry companies, IMO, can't work together either. Att bent over for the iPhone. I don't see verizon doing that.



    My opinion, other companies will get it. Not CDMA verizon.



    These wall street analysts want to drive up the stock to pad their pockets.
  • Reply 4 of 60
    I actually don't think there will be another major upgrade until mid-2012... only because that's how the 3G worked, and all the people that just bought the iPhone 4 will still be in their 2 year contract.
  • Reply 5 of 60
    damn_its_hotdamn_its_hot Posts: 1,193member
    I wouldn't go get all hot and bothered about this rumor until something more concrete is known. How many times have we heard a rumor that Verizon is coming? I don't think it is even breathing hard yet!
  • Reply 6 of 60
    shobizshobiz Posts: 207member
    "Similar speculation has emerged before, so barring independent confirmation or a press release from one of the parties, it'd be rash to pop the champagne," he wrote. "Still, it's worth considering the potential implications."



    In other words, nothing to see here. This article means absolutely nothing.



    Oh, and 2 million more phones sold? Great, but we have availability issues as it is now.
  • Reply 7 of 60
    shobizshobiz Posts: 207member
    Quote:
    Originally Posted by iancass79 View Post


    Heeeeere we go again! Believe it when I see it.



    Verizon is definitely better, but they rape your wallet for it. Two power hungry companies, IMO, can't work together either. Att bent over for the iPhone. I don't see verizon doing that.



    My opinion, other companies will get it. Not CDMA verizon.



    These wall street analysts want to drive up the stock to pad their pockets.







    "...att bent over for the iPhone..."



    I don't agree with that at all.
  • Reply 8 of 60
    If Apple really wants to sell phones, they will make phone available to Verizon before the holidays. Verizon could sell several million in December alone.
  • Reply 9 of 60
    bartfatbartfat Posts: 434member
    The obvious option would be to expand it first onto T-Mobile though. why are analysts so insistent that Apple doesn't like easy money if they simply swapped GSM chips to support the 1700 Mhz band on the iPhone? With all the things that Verizon is, this marriage is highly unlikely. Given that Verizon would like to lock down its customers' experience...
  • Reply 10 of 60
    SpamSandwichSpamSandwich Posts: 33,407member
    Another rumor not worth discussing.
  • Reply 11 of 60
    bcodebcode Posts: 141member
    I hate to stir the waters but given all the facts of late, I'm almost a believer of the January Verizon iPhone. Here's why:
    1. AT&T doesn't get 'inspired', nor does it offer freebies for no good reason - for this, I'm convinced that the move to allow newer subscribers to upgrade to the iPhone 4 is a last ditch effort to sign as many 2 year contracts as possible.

    2. Apple tries to stay on a release schedule, but has been known to update products on a whim if the market pushes hard enough. It's my opinion that Apple would gladly release a 'tweaked' version of the iPhone 4 to sell on the Verizon network, especially if that means doubling their selling power overnight.

    3. 2011 marks the 4 year mark for the Apple/AT&T relationshit... Since the US works on 2 year contracts, it would seem logical that the original exclusivity deal was for 2 full contract terms (or 4 years).

    4. Apple has publically rediculed AT&T several times over this last year - they are in just as much of a hurry to get away from AT&T as you are.

    5. Apple is liberally leaking documents that suggest the exclusivity will last, at least, another year - a typical misdirection move (or legitimate cause for concern).

  • Reply 12 of 60
    Oh yeah, 12M iPhones which loose signal strength when held in hand. Am nervously waiting to see if the iPhone i ordered for will have similar signal reception issues or not. It would be nice if apple concentrates more on this issue first.
  • Reply 13 of 60
    docno42docno42 Posts: 3,687member
    Quote:
    Originally Posted by AppleInsider View Post


    And from a strategic standpoint, Yainer said he believes it makes sense, as adding Verizon would "significantly blunt the competitive threat" from Google's Android mobile operating system.



    And to me, this is why the iPhone isn't coming to Verizon any time soon. I'd wager the insulation from government meddling because of "anti-trust" issues is worth far more than the sales of a device they can't make enough of anyway.



    Quote:

    Since last year, Verizon has worked closely with Google to offer some of the best Android devices in an effort to compete with the iPhone.



    And yet Android is still nowhere near the overall experience of the iPhone. Too many competing interests and no clearnfocus/goal will ensure that Android will always have impressive checklists of features, yet always feel lacking compared to the iPhone in overall user experience.



    The real irony is since everyone can get Android and molest it to their hearts content, their is little incentive for some to try to build the Apple model around Android. How would you differentiate yourself from the "isn't that just another Android phone"?
  • Reply 14 of 60
    boogabooga Posts: 1,081member
    My guess is that this rumor is being spread by Verizon's marketing department to keep people from switching to AT&T to get the iPhone 4.
  • Reply 15 of 60
    slynkeslynke Posts: 1member
    If the iPhone goes to Verizon it going to be the modern day Custer's Last Stand, the last hurrah of the iPhone before it gets overtaken and made a niche product by the android army.
  • Reply 16 of 60
    desarcdesarc Posts: 642member
    iPhone on verizon in 2012 as LTE. until then it's all Blah Blah Blah Blah with the only grain of salt being the early upgrades for 3GS customers.



    6/2012 makes sense with the Apple/AT&T 5 year contract, with the rollout of LTE, and with the production of one model [i think] - there will still be legacy networks that will need handled - 3g on both GSM and CDMA. [someone please correct me if i'm wrong, as i'm not an expert on Cellular legacy network compatibility mumbo jumbo]



    imagine that - someone posting that they're NOT an expert on something.
  • Reply 17 of 60
    docno42docno42 Posts: 3,687member
    Quote:
    Originally Posted by lilgto64 View Post


    With LTE right around the corner - and Verizon recently joining the GSMA board - I would think that some sort of LTE compatible iPhone mid year 2011 is more likely - that way production and sales of the next gen iPhone could coincide with the deployment of LTE - just a matter of synchronizing those two schedules - and perhaps in part AT&Ts plans to move to LTE.



    An LTE only iPhone is years away. An LTE phone from Verizon would also have to support CDMA.
  • Reply 18 of 60
    lilgto64lilgto64 Posts: 1,147member
    Quote:
    Originally Posted by Inklings2 View Post


    If Apple really wants to sell phones, they will make phone available to Verizon before the holidays. Verizon could sell several million in December alone.



    I guess selling 1.7 million phones in the first week or so shows no interest in selling hardware.



    Could be that adding Verizon customer base would be bad publicity since the shortages and wait times would double unless manufacturing could also be doubled.



    Then again there is something to be said for having a market where your product is in demand and commanding a premium as opposed to warehouses full of product that needs to be given away to make room for the over production. Not good for business to have 20 million units available on day 1 and only 12 million interested customers.
  • Reply 19 of 60
    cvaldes1831cvaldes1831 Posts: 1,832member
    The biggest reason I don't see Verizon getting the iPhone in the near future is the fact that Apple has not made an surge of hiring CDMA engineers (which would be covered by the tech media). I actually believe that there are CDMA iPhones somewhere in a lab on the Apple campus, but there's no way that these prototypes are near steady state production quality. For Apple to reach that level, they would need to hire a bunch of people specialized in CDMA phone design and implementation.



    The technological challenges aren't insurmountable (simultaneous voice-data can be achieved with SV-DO -- and apparently Qualcomm has an SV-DO chip that's waiting for a handset). Apple simply isn't staffed with enough people to make the Verizon iPhone in six months. They are straining to make their own internal product release schedules. iPad was slightly late and the iPhone 4 is arguably still half-baked.



    Secondly, the fact that the Verizon iPhone rumors have been continuing at breakneck pace is also an strong indication that they are not getting the iPhone soon. Apple's business partners clam up real tight when there's a deal in the works. There are far too many blabbermouths (including Verizon CEO Ivan Seidenberg) for any of these rumors (some of them patently ludicrous) to have any weight.



    Expanding iPhone to T-Mobile USA is a far more likely next step for Apple. Adding a 3G chip that can handle T-Mobile's unique AWS frequency is relatively easy. T-Mobile has been quite happy over the years to have jailbroken iPhones on its network (no 3G data, just EDGE). T-Mobile's silence makes them a far more serious candidate to be the next American iPhone carrier than Verizon with their tsunami of silly rumors.
  • Reply 20 of 60
    Quote:
    Originally Posted by bartfat View Post


    With all the things that Verizon is, this marriage is highly unlikely. Given that Verizon would like to lock down its customers' experience...



    I disagree to some extent. When it comes to the smartphones Verizon doesn't touch the software all that much, especially in the case of Android. That is more in the hands of the manufacturer of the phone (which has it's own problems).



    The only annoying thing that Verizon does is throw their logo onto the phone wherever they can (I have a big Verizon logo on both the front and back of my Moto Droid).



    I'm sure Verizon would want a huge logo somewhere on their iPhone, but Apple would never allow for that.
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