Analyst Calls Verizon iPhone a Sure Thing

| Apple Stock Watch

Piper Jaffray analyst Gene Munster thinks the Verizon-compatible iPhone is more than a rumor. He’s even going so far as to include the Verizon iPhone in his Apple sales estimates for 2011, according to the Wall Street Journal.

“Our Take On The Timing Of iPhone At Verizon. Our model assumes Verizon launches the iPhone in early- or mid-calendar year 2011,” Mr. Munster said. “While we do not know the timing of the launch we have modeled it to occur midway through the March ‘11 quarter.”

Verizon iPhone? Munster’s Magic 8 Ball says “Yes.”

Rumors have been circulating for some time that Apple is working on a CDMA-based iPhone to sell along side the current GSM models. CDMA is the cell communication technology Verizon and a handful of other mobile communication companies around the world use, and it isn’t compatible with the GSM-based technology AT&T and Apple’s other iPhone partners use.

Adding a CDMA iPhone would potentially increase the number of customers for Apple, although so far the company has remained tight lipped on whether or not it has such an iPhone in development.

Mr. Munster is so sure Apple will release a Verizon-compatible iPhone in 2011 that he pushed up his target price for the company’s stock to US$438. Apple is currently trading at $321.34, up 1.05 (0.33%).

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Comments

MOSiX Man

I can do the same thing. Watch!

Non-analyst MOSiX Man says that the sun coming up in the east, tomorrow, is a sure thing. He even estimates that it will happen between the hours of 5:00 AM and 9:00 AM (local time).

It seems that the level of accuracy is any particular analyst prediction is directly proportional to how much the predicted even has already been all-but guaranteed to happen, via tons of information from numerous public sources.

Gary

What’s with Android OS running on the photo of an iPhone.

Gary

What’s with the Android OS in the photo of an iPhone?

Constable Odo

Munster is just guessing.  All he’ll succeed in doing is driving Apple shares down again when it doesn’t take place.  Why doesn’t he just wait until it takes place to base estimates on a Verizon phone?  It’s easy enough to see that individual investors don’t care whether there’s a Verizon iPhone or not.  It’s not going to move the stock any and will just create impossible expectations from Wall Street.  This guy is a flake and all of the analysts should stop boosting Apple target prices.  No investors are biting despite a possible 20% upside.

FlipFriddle

Enough already. Do they get paid by the press release or something? Analyze your own brown-eye for pete’s sake.

Lee Dronick

I will believe it when Apple issues a press release. Not that it couldn’t happen but we don’t know what is going on behind the garden wall. I am thinking that AT&T doesn’t want to lose their cash cow and is negotiating with Apple to keep exclusivity. Also AT&T has been building out their system, making improvements, that could provide better service in the mountains of certain cities.

Ross Edwards

@Sir Harry,

It isn’t going to happen.  ATT doesn’t have enough money to give Apple to cover the revenue that Apple will get from tens of millions of VZ users jumping on board.  That is money that Apple and VZ are not going to leave on the table.  ATT had its time, and it worked out well for them. 

No contract of the magnitude of the Apple-ATT deal comes without early termination options, buyout options, breach provisions, and so forth, so Apple has always been able to unilaterally end ATT’s exclusivity.  Why hasn’t Apple already done so?  Only the insiders know for sure, and they aren’t talking.  It could be as simple as the buyout option being for the final year of the five-year deal, which is not at all unusual for contracts of this kind.  That would make it logical for a VZ iPhone to appear around June 2011.  If the buyout option triggered BEFORE the final year, it probably would already have happened by now, so we can assume it has not.

Considering what is plausible and what is known, all the speculation about a VZ iPhone coming any time before June 2011 seems unfounded.  It remains possible we still won’t see it until 2012.  Apple may simply choose to adhere to their ATT deal for its duration, declining the exercise of any termination options.  But once the Apple-ATT deal ends, regardless of the manner in which it ends, there’s no way Apple re-ups with ATT for exclusivity… too much money left on the table if they do, and it would be more than ATT has to offer.

Terrin

I agree with Ross. AT&T doesn’t have enough money to pay Apple to keep the iPhone exclusive. Apple wants market share, and it’s growth on AT&T has reached it’s peak. Apple’s exclusivity with AT&T gave Android a foot hold to become competitive. Attempting to correct that will require Apple to offer the iPhone on different carriers.

As far as the 5 year contract goes, there is a strong possibility that contract was shortened. Apple stopped allowing people to activate the phone through iTunes and insisted on in store activations. Using iTunes to activate was a huge selling point according to Steve Jobs. Unfortunately for AT&T it sold millions of phones for Apple only to be unlocked for use on other networks. Apple doing aways with iTunes acticvation only benefitted AT&T. AT&T had to give something significant for that.

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