Verizon High Stock Evaluations: Will iPhone Boost Sales Growth?
Now that Verizon and Apple have finally come clean over the Verizon iPhone apparently investors are putting a great deal of faith in the Verizon iPhone expanding the carriers customer base and pushing up stock .
According to an article over on the Wall Street Journal by Dan Gallagher, there is much debate on Wall Street on juts how beneficial the Verizon iPhone will be to the Big Red even though analysts have predicted sales of the device may exceed 10 million this year.
However, given the subsidies Verizon will hand out with the Verizon iPhone, CDMA iPhone earnings for this year are likely to be diluted.
Furthermore it is still somewhat unclear whether the CDMA iPhone will produce growth in average revenue per customer, although apparently investors reckon it will, but will the CDMA iPhone brings huge numbers flocking to their network or will it simply retain customers who are already with the carrier?
Oppenheimer’s Tim Horan has said…“Because there is not as much subscriber growth available as there once was, the hope now is that–if the carriers can cap data usage–users will pass those caps and drive up revenue.”
Apparently Horan also commented that most of the benefits of the Verizon iPhone will end up sitting in the Apple coffers as they get 400 bucks in subsidy from Verizon for each and every CDMA iPhone, and has estimated that the subsidies will “pressure” Verizon’s earnings by $0.20 a share this year.
Therefore Horan maintains a “neutral” rating on Verizon shares after the announcement of the Verizon iPhone. While other analysts take a different view with Goldman Sachs upgrading Verizon to buy and downgrading AT&T to neutral.
That’s the analysts views on the Verizon iPhone, but what about the customers, what do our readers think about the Verizon iPhone, will the iOS device do well on the Big Red, will it draw in more customers, will it pull custom away from AT&T?