Verizon Gets the iPhone

The long awaited news finally came today, announced in a joint meeting with Apple in New York City. This will end AT&T’s three plus years of strong growth driven by its monopolistic hold on the iPhone.Verizon will start shipping to customers as early as February.

Many analysts expect AT&T to lose contract customers this quarter without a powerful, unique incentive to lure subscribers.The operator also suffers from a perception that its wireless network is ill-equipped to handle iPhone users' heavy data usage. AT&T could lose up to 3.5 million customers, although it will take time for that to happen due to contractual obligations. AT&T will also face additional pressures from Verizon Wireless, which may offer new iPhone customers the same privileges all of its smartphone customers enjoy: unlimited wireless data usage for a flat monthly fee.

Verizon will initially take a hit on its Earnings Per Share, due to the subsidy it will incur for the iPhone. However, in the long run it will profit greatly from the increased customer base. Overall, a great coup for Verizon.

C. Cohn
Cohn-Reilly Report