The deal to bring the iPhone to Verizon is a big one. Verizon customers have been waiting for years, and the company should see a boost in the number of subscribers that it adds.
The consensus is that, in the end, this will be a positive for Verizon . But in the near term, most likely, it won't see a boost in terms of earnings. Just the opposite, in fact.
"In the early phases of their [iPhone, manufactured by Apple] deployment, most of the subsidies are going to dilute Verizon's earnings," said Chandan Sarkar from Auriga.
It's simple math. Although official figures are not released, it's believed that Verizon is paying an iPhone subsidy between $350-400 per device. Basically, Verizon pays Apple a certain amount for the phone and then sells it at a discount to the customer. The difference is the amount that Verizon—and its shareholders—have to absorb.