Despite the notion that Verizon customers may stick around instead of jumping to AT&T for an iPhone following the latest rumor that AT&T’s exclusive deal ends in January, UBS analyst Maynard Um doesn’t expect to see any slowdown in sales.
“We do not believe there will be a material impact to Apple from Verizon Wireless customers deciding to ‘take a chance’ on the news and wait for a CDMA iPhone rather than switch to AT&T,” Mr. Um said. “Our survey work indicates about 80 percent of early iPhone purchasers were upgrading from prior versions of the iPhone, which is directionally similar to our US Wireless Services analyst John Hodulik’s belief that 90 percent of new iPhone sales have been made to existing AT&T customers.”
Bloomburg added fuel to rumors that Apple and Verizon have struck a deal that would end AT&T’s exclusivity in the U.S. with its report that a CDMA version of the iPhone would launch in January 2011. Those rumors haven’t been confirmed by Apple or Verizon, but Mr. Um thinks this time they may be legit.
He said the rumors are “consistent with our view that a CDMA iPhone could come in calendar 4Q10 to international carriers followed by Verizon Wireless at some point after the AT&T exclusivity ended at year end. The question was whether Verizon and Apple could come to a commercial agreement.”
Mr. Um is maintaining his “Buy” rating and US$320 target price for Apple’s stock. Apple is currently trading at $256.45, up 0.28 (0.11%).