iPhone Breaks AT&T Marriage Today For Verizon (AAPL, T, VZ)

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The biggest news of 2011 for Verizon Wireless
VZ
is due out today at 11am: the Apple
AAPL
iPhone finally leaves AT&T
T
exclusivity.
As Benzinga has noted earlier
, rumors have circulated for months concerning an Apple and Verizon iPhone deal. When Verizon announces the deal with Apple today, investors will be interested in several things. Not only would AT&T lose exclusivity to the iPhone product, but Google
GOOG
may also be negatively affected. According to
Bloomberg
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, Google may lose revenue as customers will have an alternative to the Android product. For AT&T, the Apple iPhone accounted for 80% of smartphone purchases in the third quarter last year. AT&T and Verizon representatives have been bickering in light of the impending announcement. AT&T's spokesman, Mark Siegel, called Verizon “slow” and Verizon spokesman, Jeffrey Nelson, retorted with “it must be backwards day at AT&T,” according to
The New York Times
. Clearly, the bitter AT&T-Verizon rivalry is only magnified by the news that AT&T no longer holds the golden trump card of Apple's iPhone. Investors and traders will be following Apple, Verizon, Google, and AT&T closely today. This is huge news for Apple and Verizon, with price appreciation in both stocks evident over the past few days. However, according to
a story on TheStreet.com
, Verizon's profits may be destroyed as the upfront costs of subsidizing the iPhone to keep it priced near $200 are enormous. Just as AT&T took a hit to earnings to the tune of $0.11 in 2008, Verizon may face similar injuries to its earnings. It is possible that AT&T will be affected by this development by losing potential customers. Instead of being forced into an AT&T contract solely to obtain the iPhone product, consumers will have their choice of carriers. Verizon customers will be happy to have increased smartphone variety. Verizon investors, however, must face the possibility that short-term earnings may be depressed for 2011. Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
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