Is the Verizon Iphone Priced into AAPL today?

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    Posted: 05 November 2010 05:25 PM

    I got my copy of Fortune magazine yesterday (the paper edition!) and it had the cover article on Verizon and the upcoming CDMA Iphone. While the contents of the article was really about Verizon’s structure, growth and prospects, it stated in no uncertain terms that “Fortune has confirmed the Verizon Iphone early in 2011”.

    While Verizon’s selling of the Ipad this month, the many channel checks on CDMA components being shipped, the hiring of call center staff for early next year, Qualcomm’s results and hints…all lead to the perhaps foregone conclusion that the Verizon Iphone is coming and coming fast….I thought all of this might mean a bit more to Apple’s price. Now, at 317 we are two bucks off an all time closing high, so what is not to like?

    Still, it seems to me that the addition of Verizon early next year to already robust Iphone sales would allow for even more market enthusiasm. Or is it all priced into our current 20.2 trailing P/E price?  :oh:

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    Posted: 05 November 2010 05:36 PM #1

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

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    Posted: 05 November 2010 05:41 PM #2

    I don’t think it is.

    Apple’s P/E was around 23 before earnings.  Some P/E expansion should be happening, if for no other reason than those mystery events or announcements that were strongly hinted as being due before the end of this year.

    You can argue that optimism is priced in, but fundamentals seem to matter more for Apple in the long run (albeit in a sickeningly muted way compared to other stocks).  iPhone sales could easily go up 90% YOY next year without any help from Verizon.  International demand thus far has proven to be red-hot (and more important), and the devastating iPhone 5/cheap iPhone 4 combo which is almost inevitable next June will kick things up another notch.  To me, it’s simply a question of how many iPhones per year more will Apple sell by adding one or more carriers in 2011?  Break out the incremental revs and earnings from there, etc.

    Not to say that AAPL may actually experience a small dip on news of Verizon or a “lesser” carrier like T-Mobile USA releasing the iPhone.  But when earnings come around reflecting increased unit sales growth, AAPL should catch up.

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    Posted: 05 November 2010 05:46 PM #3

    Mav, have you seen the new T-Mobile commercial against the iphone? Does not look to me like a company that would be getting the phone any time soon.

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    Posted: 05 November 2010 05:48 PM #4

    No, but some other perspectives I’ve read about the commercial contend that T-Mobile is indirectly begging for the iPhone while mocking the biggest perceived problem of the iPhone in the US - AT&T.

    There’s also that “Island of Misfit Toys” thing with Verizon from last year.  And then what happens?  Verizon starts selling the iPad with a kludgy-looking MiFi bundling deal.  It’s fierce competition right up until the lovefest event announcing the great new partnership, I guess.  wink

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  • Posted: 05 November 2010 07:33 PM #5

    mbeauch - 05 November 2010 08:36 PM

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

    I disagree. I think it’s a big event that is not yet priced in. Apple will sell substantially more iPhones and slow down the growth of Android phones. Apple will pick up both new subscribers from Verizon as well as those that leave ATT for Verizon. This is just another catalyst after the holiday season. Enjoy the ride, stay long and don’t try to time this one. Just my opinion of course.

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  • Posted: 05 November 2010 07:43 PM #6

    mbeauch - 05 November 2010 08:46 PM

    Mav, have you seen the new T-Mobile commercial against the iphone? Does not look to me like a company that would be getting the phone any time soon.

    Mav has already addressed this, but I would join with him in disagreeing with your conclusion. The ad you allude to is very odd. It seems to note that the iPhone is desirable but that it is burdened by having to carry AT&T on its back. I don’t think it would be difficult at all for T-Mobile to transition to the message that once the iPhone ditches AT&T and pairs with T-Mobile that they would form a winning combination.

         
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    Posted: 05 November 2010 08:33 PM #7

    FalKirk - 05 November 2010 10:43 PM
    mbeauch - 05 November 2010 08:46 PM

    Mav, have you seen the new T-Mobile commercial against the iphone? Does not look to me like a company that would be getting the phone any time soon.

    Mav has already addressed this, but I would join with him in disagreeing with your conclusion. The ad you allude to is very odd. It seems to note that the iPhone is desirable but that it is burdened by having to carry AT&T on its back. I don’t think it would be difficult at all for T-Mobile to transition to the message that once the iPhone ditches AT&T and pairs with T-Mobile that they would form a winning combination.

    I agree..and when I first saw the ad my first impression is that it looked like the old Mac/PC adds. The attractive, smart T-mobile avatar vs. the o.k. looking Iphone avatar with the fat, sluggish ATT avatar on its back. I am sure the similarity was not entirely accidental.

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  • Posted: 05 November 2010 08:37 PM #8

    jeffi - 05 November 2010 10:33 PM
    mbeauch - 05 November 2010 08:36 PM

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

    I disagree. I think it’s a big event that is not yet priced in. Apple will sell substantially more iPhones and slow down the growth of Android phones. Apple will pick up both new subscribers from Verizon as well as those that leave ATT for Verizon. This is just another catalyst after the holiday season. Enjoy the ride, stay long and don’t try to time this one. Just my opinion of course.

    I agree with jeff, it is a big event not yet priced in. Ask anyone who has a Droid or other smartphone on Verizon if they would think about the iPhone once Verizon had it. Everyone I have asked as said they would drop their current smartphone and go for the iPhone immediately.

    We will all know for sure if Verizon has lines around the block of people waiting to get their iPhone ... if they do then it assuredly is a big deal. And it is certainly not priced into any of the mainstream analysts since it is unannounced and pure speculation.

         
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    Posted: 05 November 2010 10:27 PM #9

    mbeauch - 05 November 2010 08:36 PM

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

    Time for a bet methinks grin Big event, lots of V folks can’t wait to get the iphone. I think we’ll see big lines. Hell, I might switch to V once I see how everything shakes out.

         
  • Posted: 05 November 2010 11:03 PM #10

    adamthompson3232 - 06 November 2010 01:37 AM

    I am switching to VZ on day one.

    If the Verizon service is good, I will switch 9 iPhones. Apple gets to double up on sales of iPhones to me. The big winner here is Apple. Certainly not AT&T.

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    Posted: 05 November 2010 11:49 PM #11

    ChasMac77 - 06 November 2010 01:27 AM
    mbeauch - 05 November 2010 08:36 PM

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

    Time for a bet methinks grin Big event, lots of V folks can’t wait to get the iphone. I think we’ll see big lines. Hell, I might switch to V once I see how everything shakes out.


    LOL, what kind of numbers are you thinking? Put some thought into it, you know I love a good bet. Are you really going to pay an early termination fee? I don’t think so.

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    Posted: 06 November 2010 12:11 AM #12

    mbeauch - 06 November 2010 02:49 AM
    ChasMac77 - 06 November 2010 01:27 AM
    mbeauch - 05 November 2010 08:36 PM

    I have stated before, I think if Verizon gets the iphone, it is a non-event. The iphone has been around long enough that people who actually wanted one bought, the number of VZ hold-outs to me is small.

    BTW, I still do not see any way for itunes and V-Cast to co-exist.

    Time for a bet methinks grin Big event, lots of V folks can’t wait to get the iphone. I think we’ll see big lines. Hell, I might switch to V once I see how everything shakes out.


    LOL, what kind of numbers are you thinking? Put some thought into it, you know I love a good bet. Are you really going to pay an early termination fee? I don’t think so.

    Was thinking how to quantify that? No idea really except “big ass lines!”. Will have to think on that one. Personally, I’m about at the end of my contract anyway as is the small child. Just playing the waiting game for the 4G/5G. No rush here.

         
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    Posted: 06 November 2010 12:47 AM #13

    90+ million V customers equates to roughly ~10 million additional iphone sales per year.

    Is that priced in?  At ~$318 and a trailing PE of 21 ....................  I don’t think so!

      cheers to the longs
          JohnG

         
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    Posted: 06 November 2010 01:31 AM #14

    johnG - 06 November 2010 03:47 AM

    90+ million V customers equates to roughly ~10 million additional iphone sales per year.

    Is that priced in?  At ~$318 and a trailing PE of 21 ....................  I don’t think so!

      cheers to the longs
          JohnG

    Well at least you put out a respectable number. Net result would be about 300 mil to the eps/qtr. Considering Apple sold 14 mil this qtr, I think there could be a short lived pop. Then reality.

    BTW, my guess is between 1-1.5 mil units/qtr.

    FTR, I am still not sold on the idea of a VZ iphone.

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    Posted: 06 November 2010 03:07 AM #15

    The question should be; Does the market sell aapl when Jan earnings comes and goes with no special event or VZ announcement. 

    There won’t be a Verizon iPhone next year.