Shares in Apple Inc. tumbled amidst a broad market sell-off as investors worried about the state of the global economy. Also making news was a research note from Credit Suisse, which said there was a 75% chance that AT&T would keep its exclusive contract for the iPhone throughout 2010, locking out Verizon. The firm then downgraded Verizon on that assessment.
AAPL traded lower throughout the day - the stock was at a lowpoint as we compiled this article in the late afternoon trading session. Shares of the stock traded at US$192.02, a loss of $7.21 (-3.62%), on moderate volume.
The AP reported that investors have grown concerned that the global economy is weaker than expected. The wire service reported that rising debt levels in Europe and an unexpected increase in unemployment claims in the US sent money out of the markets and into "safe havens" such as Treasury Bills (T-Bills) and the U.S. Dollar.
Marketwatch reported the news from Credit Suisse, which downgraded Verizon on the likelihood that it will continue to remain shut out of the iPhone market, meaning that a multibillion dollar U.S. carrier was being penalized simply for not being able to offer its customers one phone line.
"While the move to non-exclusivity is a matter of 'when' not 'if,' it makes a big difference to all of the participants if it happens in 2010 or 2011," the firm wrote in its research note.
Verizon's stock was downgraded to a "Neutral" on the opinion. At the same time, however, Credit Suisse believes that competing handset makers such as Motorola, BlackBerry maker Research in Motion, and Palm would all benefit from the AT&T exclusivity deal.
All that said, the brokerage still expects Apple to release a CDMA version of the iPhone that would work on Verizon's network sooner or later.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.