CDMA components could drive price of Apple's Verizon iPhone up $20-$30Verizon may charge between $20 and $30 more than AT&T for the subsidized Apple iPhone price, due to the higher cost of CDMA wireless components, according to J.P. Morgan.
Analyst Mark Moskowitz with J.P. Morgan believes the Verizon iPhone could carry a slightly higher price tag following its expected announcement on Tuesday. In order to be compatible with Verizon's network, the redesigned device must include an internal CDMA radio, which he said is a more expensive component than the UMTS technology found in the current AT&T-compatible iPhone.
"The key differentiator is the cost of CDMA-related components," Moskowitz wrote in a note to investors on Monday. "While the acquisition price of the iPhone could be slightly more expensive for subscribers on Verizon, we think that there will be offsets, specifically network performance."
AT&T's network has been viewed by some as an "Achilles' heel" for the iPhone, as the carrier's network has struggled at times thanks, in part, to the popularity of Apple's iPhone. In a survey of wireless subscribers last month, Consumer Reports found that AT&T was ranked the worst carrier in the U.S., while Verizon was the top-ranked among the "big four."
Moskowitz said it remains to be seen whether Verizon's network will be able to handle an influx of new iPhone customers. But if the carrier's network can withstand the crush of handsets, it will work to Verizon's advantage.
"If Verizon can avoid network performance issues during and after a potential iPhone roll-out, then we expect a multi-year growth spurt in U.S. iPhone sales," he wrote," as meaningful levels of AT&T iPhone subscribers could migrate to Verizon for improved performance."
Another factor he noted are rumors that Verizon will offer an unlimited data plan for iPhone customers. Earlier this year, before the iPhone 4 launched, AT&T halted new "unlimited" data plans, and new customers are capped at a maximum of 2GB of data per month.
Verizon is set to hold a media event on Tuesday morning in New York City, and multiple publications, including The Wall Street Journal, have reported that the event will be used to announce a CDMA iPhone 4. It has also been suggested that Apple Chief Executive Steve Jobs could appear at the Verizon-hosted event. AppleInsider will have full, live coverage of Verizon's announcement on Tuesday.
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