Who Wins When iPhone Heads to Verizon?
AT&T has been the exclusive carrier for Apple's iPhone since the device launched in 2007, but talk of the tech giant producing an iPhone for Verizon Wireless is sending the tech world and Wall Street buzzing.
“The expectation is that Verizon will see some significant market share gains here once they get their hands on the iPhone,” Christopher King, a senior telecom services analyst at Stifel Nicolaus, told CNBC. “Most of that will certainly be at the expense of AT&T .”
Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group .
King predicts the initial market reaction will be very positive for Verizon but warns there are still many unknowns. Among the unknowns are the increased capital expenditure needed to deal with the data demand associated with the iPhone and the concessions that will be paid to Apple in terms of handset subsidies.
Daniel Ernst, an analyst at Hudson Square Research, thinks the big winner here will be Apple.
“It’s certainly a good deal for Apple, because Verizon would effectively double their adjustable market in the US,” he added.
Apple shares were already trading higher on the news, even hitting a record high of $236.95 in the first minutes of the session. Verizon shares rose more than 2 percent to $31.15, while AT&T stock dropped nearly 1 percent to $26.30.