Neil HughesMike Abramsky with RBC Capital Markets said in a note to investors Friday that he believes Apple is likely to turn to T-Mobile and possibly Sprint in the U.S. to counter the expansion of phones running the Google Android operating system. But comments made by Verizon's chief executive this week could be a sign that the nation's largest wireless carrier still cannot reach a deal with Apple.
"Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network," Abramsky wrote. "And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."
He continued: "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."
Last October, Google and Verizon announced a partnership in which they would help to create, market and distribute products running the Android mobile operating system. Verizon's push has helped Android grow exponentially in the U.S. smartphone market.
Abramsky said he believes that recent reports of a CDMA iPhone set for manufacturing in December could be destined for other carriers around the world, including KDDI in Japan, China Telecom, and Mexico's Telefonica. Verizon also runs a CDMA network, but it's possible the carrier cannot reach a deal with Apple.
The analyst said the impact of a delayed Verizon iPhone, or no iPhone on its network at all, would be minimal to Apple's stock. Abramsky had previously predicted that Apple would sell between 6 million and 8 million iPhones on Verizon's network in 2011, though the addition of T-Mobile and Sprint could add between 4 million and 5 million sales.
He also said he's heard that the iPad could possibly come to Verizon in the first half of 2011, but cautioned that he has not "confirmed" the rumor. RBC Capital Markets has currently forecast sales of 24 million iPads next year.
In recent months, numerous rumors have claimed that Apple will release a CDMA iPhone, compatible with the Verizon network, in January of 2011. A CDMA variant of the iPhone has reportedly been in testing, and in August was said to be just two steps away from production.
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142 Comments
And the plot thickens...
Let me guess. Verizon wants to maintain its nickle-and-dime-to-death approach to charging customers for cellular services (like visual voicemail) and Apple won't settle for it.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
Let me guess. Verizon wants to maintain its nickle-and-dime-to-death approach to charging customers for cellular services (like visual voicemail) and Apple won't settle for it.
That's exactly what I was thinking too.
Although it's clear ATT and Verizon have better service(s) than Tmobile and Sprint, the latter set have much better prices. I would really like to see an iPhone with a smaller monthly fee. This has been my biggest obstacle so far.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
Because LTE rollout and coverage will take much longer than until the end of next year to finalize to the point that you'd never have to drop down to 3/2G. And that means CDMA support in Verizon phones for years longer.