Verizon iPhone Reports Gain Credence - InformationWeek
Mobile // Mobile Devices
11:24 AM
Eric Zeman
Eric Zeman

Verizon iPhone Reports Gain Credence

Barclays Capital says Verizon will score the iPhone in early 2011 and sell 9 million by the end of the year.

Verizon Wireless will sell 9 million iPhones by the end of 2011? That's a heck of a predication being made by Barclays Capital analyst James Ratcliffe. Ratcliffe recently wrote, "Channel checks by our communications equipment and semiconductor research partners give us greater confidence that Verizon will get an iPhone in early 2011, and we are now incorporating that belief into our models for AT&T and Verizon."

This isn't the first time analysts have believed in that Apple and Verizon would team up. Back in January, it was widely believed that the iPad would be announced in conjunction with Verizon Wireless. It wasn't. Instead, it was announced with Apple's long-time partner AT&T.

On June 7, Apple announced the iPhone 4, also with AT&T and not Verizon. The exclusive arrangement between the two companies would, on the surface, appear to be ever-lasting.

Ratcliffe notes that AT&T won't necessarily be the loser when Verizon finally begins offering the iPhone. "We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T's network take advantage of the alternative," he wrote.

"Overall, however, we believe that smartphone customers are relatively sticky, particularly given that (a) 70% of AT&T postpaid customers are on family plans (which would necessitate a group switch), (b) switching cost for customers currently in contract would be $375-525 per handset, (c) approximately 40% of handsets are covered under corporate discount arrangements, many of which may not have VZ equivalents, (d) for many, if not most iPhone customers, the service quality being delivered on the AT&T network is in reality comparable to what they'd receive on Verizon's network, and (e) switching will likely result in accepting a bandwidth-capped data offering, since (we believe) that Verizon is likely to launch tiered bandwidth pricing prior to the launch of an iPhone."

The breakdown Ratcliffe sees is churn of somewhere between 500,000 and 1 million AT&T customers who will defect for Verizon. The remaining 8 to 8.5 million Verizon iPhone customers will be existing customers who change devices, or stolen from T-Mobile, Sprint and others.

Ratcliffe still believes that AT&T will hook up to 16 million more iPhone customers by the end of 2011, with 10 of them signing up this year and another 6 next year. That's hardly a catastrophe for AT&T.

This report does lend credence to the theory that AT&T is offering the iPhone 4 upgrade to so many of its customers early to prevent them from jumping ship in January when the iPhone is rumored to be released for Verizon.

As far as I am concerned, a Verizon iPhone won't exist until it is announced by Steve Jobs. Until then, anything else is a rumor.

[Via AllThingsD]

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll