Should Apple end its exclusive carrier agreement with AT&T next year, it will likely mark the end of its estimated US$450 carrier subsidy for the iPhone, a new analysis has forecast.
Per AppleInsider, analyst Brian Marshall with Broadpoint.AmTech said that the “sweetheart” carrier subsidy provided by AT&T for the iPhone would not be attainable with Verizon. According to Marshall’s note to investors, the analyst believes that the iPhone will be added to the Verizon network in the second half of 2010, but not without consequences.
A non-exclusive iPhone, Marshall forecast, would command roughly a US$300 carrier subsidy. But he believes that any losses would be made up in volume, as Verizon is predicted to sell roughly 14 million iPhones in the 2011 calendar year. With an average selling price of around US$500, which would account for another US$7 billion in revenue for Apple.
“While AAPL started off with exclusive arrangements in 2007 with the original iPhone launch, the company has since migrated towards multiple carriers per region,” the note said. “In our view, 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.”
Marshall’s assumption of 14 million Verizon iPhones is based on the performance Apple has had on AT&T’s network. Within six quarters of the iPhone’s launch, the handset has become 4% of AT&T’s postpaid subscriber base.
In the September quarter, the iPhone was said to represent more than 90% of AT&T’s total postpaid additions — an increase from 57% from a year earlier, and 33% in September 2007. It is based on the strength of the iPhone that AT&T has posted subscriber gains on market leader Verizon, adding 2 million customers last quarter to Verizon’s 1.2 million.
AT&T activated a record 3.2 million iPhones last quarter, of which nearly 40% were customers new to the wireless carrier. But CEO Ralph de la Vega also predicted that the iPhone will not remain exclusive to AT&T forever, though he believes his company’s portfolio will remain strong after the device jumps to other carriers.
3 replies on “Rumor: Apple May Switch From AT&T to Verizon as Official iPhone Carrier”
Bu they would have to make an entirely DIFFERENT iPhone. Verizon is neither GSM nor G3 in the “3G-GSM” sense. How many radios do we expect them to cram into such a small device??? =-O
Whoa! Calm down. You’re misreading the article. It merely states the possible end of the $450 subsidy of the iPhone, which allows people to buy one on ATT’s network for $199. There’s nothing in the article referring to a switch in carriers. Making the iPhone non exclusive might mean a reduction of ATT’s subsidy. Though in my opinion, market forces would certainly mean competitive pricing between the two carriers.
Dude, can you please explain to me why you think ending the exclusivity deal with AT&T would mean Apple would drop AT&T as a carrier? Can you explain to me how exactly that would take place?
Doesn’t it mean INSTEAD that the iphone would be carried on B O T H AT&T and Verizon?
Doesn’t it? DOESN’T IT?????????????????????????
There has been no talk about Apple “jumping” carriers whatsoever. How in the living hell would Apple increase their market share by switching carriers? Hmm?? Answer the question!
It’s extremely tempting to call you a name that is the opposite of “smart” here man.
In case I’m not being clear…..the suggestions are that Apple would be able to offer the iphone on more than one carrier thus increasing the phone’s exposure to consumers and increasing it’s market penetration. Ya know……like they are starting to do in other countries?
Is everybody on the internet mentally challenged?