Analysts Differ on Verizon iPhone Speculation
Analysts debated over renewed speculations that a Verizon iPhone deal is coming in January 2011. A Bloomberg story citing unnamed sources said the device will be available to customers in January. A deal could hurt manufacturer Research In Motion’s BlackBerry sales, some analysts said. Spokespersons from Verizon Wireless and Apple declined to comment.
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Component and distribution checks indicate that Apple is likely to begin production of a CDMA iPhone, possibly with LTE support, in 4Q10 for launch at Verizon in January 2011, perhaps at the Consumer Electronics Show, Barclays Capital analyst Ben Reitzes said. As a result, Apple’s U.S. unit volume is likely to grow from 11 million units in 2010 to some 15 million in 2011, with 9 million at Verizon and 6 million at AT&T, he said. He also forecast that Apple would launch the device in other CDMA markets, in particular China with China Telecom.
Verizon could sell as many as 6 million iPhones next year if it starts doing so early next year, RBC Capital’s Mike Abramsky said. Verizon had some 92.8 million customers at the end of Q1 and those customers could buy 3 million iPhones a quarter, UBS’ John Hodulik said.
Rumors are likely overblown, some analysts said. January 2011 is right in the middle of the iPhone’s typical life cycle, said Oppenheimer analyst Yair Reiner, saying it would be an unusual move to have another big launch right in the middle of iPhone’s cycle. Several analysts expected Apple’s exclusivity agreement with AT&T, signed in 2007, to expire in 2012. The Bloomberg report is “the newest version of a rumor we've seen again and again,” said Current Analysis’ Avi Greengart. Yet if the rumors happen to be true, it likely wouldn’t have as big an impact on AT&T as it might have had a few years ago, he said. A majority of current AT&T customers are on family or business plans, meaning they are less likely to change carriers because of one device, he said.
Some 10 percent of Research In Motion’s sales would be at risk from a Verizon iPhone, said Needham & Co. analyst Charles Wolf. If the iPhone takes share equally from BlackBerry phones and Android phones, that works out to about a million units worth of impact to RIM sales, he said. However, not all is lost for RIM, Abramsky said. “While a headwind to Verizon share, actual impact on RIM may be less than feared,” he said. AT&T losing iPhone exclusivity may give RIM more leverage ahead of RIM’s expected launch of a new BlackBerry device in August, he said. Additionally, where RIM has competed with the iPhone in other markets, BlackBerry has seen sustained growth despite competitive gaps, he said. Furthermore, Verizon may also offer tiered iPhone data plans, which may highlight BlackBerry’s efficiency, he said.
Meanwhile, a Verizon iPhone could spur stiff competition for Samsung, Motorola and HTC, all of which have high-end Android phones at Verizon, Greengart said. Adding a second U.S. carrier would blunt the competitive threat from Google’s Android platform, which Verizon has been promoting heavily as its answer to the iPhone, said Reiner.