CHICAGO, Jan. 13, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Apple Inc. (Nasdaq: AAPL), Verizon Communications (NYSE: VZ), Vodafone Group Plc (NYSE: VOD), Sprint Nextel Corp. (NYSE: S) and AT&T Inc. (NYSE: T).
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Here are highlights from Wednesday's Analyst Blog:
Verizon iPhone to Debut Feb. 10
Market speculation about Verizon Wireless selling Apple Inc. (Nasdaq: AAPL) iPhone 4 has been appeased with the two companies finally reaching an agreement. Verizon announced that it will begin selling the handset from February 10, 2011 and pre-orders for existing customers will be cleared online from February 3. Verizon Wireless is a venture between Verizon Communications (NYSE: VZ) and Vodafone Group Plc (NYSE: VOD).
The iPhone will be available at all Verizon stores at $199.99 for the 16GB model and $299.99 for the 32GB model. Both models will carry a new two-year agreement. The news, however, has not given any immediate fillip to Verizon's share price. The shares of Verizon fell approximately 1.6% yesterday at the close.
Verizon's iPhone will support third generation (3G) technology and run on the CDMA network, a standard employed by Sprint Nextel Corp. (NYSE: S) and carriers in China and South Korea. Although Verizon continues to extend its nationwide coverage with 3G wireless technology, it also invests heavily in the more advanced fourth generation (4G) infrastructure.
The iPhone will not support the company's new high-speed 4G network that uses the long-term evolution technology with average download speed more than five-times faster than the 3G network. Thus, Verizon's iPhone will deploy lower data speeds as against AT&T Inc. (NYSE: T) upgraded 3G network. AT&T and Verizon iPhones are essentially identical. The only exception in Verizon iPhone is its capability to simultaneously connect five laptops or other devices to its 3G network through Wi-Fi.
The sale of iPhone by Verizon will mark the end of exclusivity that its largest rival AT&T has been enjoying since 2007. The iPhone facilitated AT&T by drawing in more subscribers even when the U.S. mobile-phone market was nearing saturation.
Driven by strong iPhone activations, AT&T added 2.6 million consumers in the third quarter of 2010, reaching 92.8 million total subscribers in service, up 29.9% year over year. This represents an all-time high quarterly net addition in the history of AT&T.
The end of the exclusivity on the iPhone that AT&T enjoyed thus far gives Verizon a shot in the arm. It also strengthens Verizon's competitive position in the highly coveted smartphone market. Going by the AT&T-iPhone boom, we expect Verizon's partnership with Apple will drive its revenue and earnings in the near term. Verizon's iPhone is expected to add 2.1 million net new subscribers in 2011 outpacing AT&T for the first time since 2008.
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