Apple (AAPL) Leaving Exclusive AT&T iPhone Arrangement?
The Apple (Nasdaq: AAPL) analyst at Broadpoint.AmTech is making a pretty bold statement today saying "iDon't think the iPhone will remain exclusive in the U.S. in 2010."
Analyst Brian Marshall thinks iPhone could be added to the Verizon (NYSE: VZ) network in the 2nd-half of 2010, versus its current exclusive deal with AT&T (NYSE: T). He said, "diverse carrier support is a key element to driving global penetration of the iPhone (from ~3% share today of the total handset market). Therefore, we believe the chances are high the iPhone will find its way onto the VZ network in 2H10."
If the iPhone is sold by Verizon, Marshall estimates the company could sell approx. 14 million iPhone units in 2011. This would equal about $7 billion or more in pro forma revenues.
If Apple were to leave the exclusive AT&T deal, the ~$450 sweetheart" carrier subsidy would go away, thus the firm assumes the general ~$300 carrier subsidy.
Marshall said the "iPhone is by far the single most important driver of the postpaid subscriber addition market in the US today. In fact, we believe the iPhone represented over 90% of T's total postpaid net additions in the September '09 quarter (up from 57% in September '08 and 33% in September '07).
The firm is reiterating their Buy rating and $235 on Apple.
This could have negative implications for other smartphone makers including Research in Motion (Nasdaq: RIMM) and Palm (Nasdaq: PALM).
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