Verizon iPhone announcement expected tomorrow

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Verizon iPhone Announcement Seen for Tuesday

Tremendous excitement over the weekend about the likely Verizon announcement of a CDMA-based iPhone on Tuesday. Stifel Nicolaus thinks five to six million AT&T subscribers may switch to Verizon, despite two-year contracts and Family Plans from AT&T.

Not only is Verizon likely to attract AT&T subscribers, they are likely to suck subscribers from other carries like Sprint Nextel . Even if many wait for contract expiration (AT&T raised the early termination fee for 2-year smartphone subscribers to $325 from $175), the migration may still be notable.

Either way, Apple wins. How much? Cross Research thinks iPhone could penetrate 12 percent of Verizon's 83.2 million wirless subscribers; that alone would add $2.15 to AAPL EPS this year.
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Verizon Comes to iPhone - Video
 
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thurley42 said:
Is there any timeline on the 4g network for Verizon?
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From Verizon's most recent quarterly report:

On October 6, 2010, we announced that we will launch our 4G Long-Term Evolution technology (LTE) network in 38 major metropolitan areas and in more than 60 commercial airports by the end of 2010. In our wireline business, our goal is to become the leading broadband provider in every market in which we operate. We are focused on providing the highest network reliability and innovative products and services.
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The Verizon iPhone will be available for pre-order on February 3rd and for sale on February 10th - $200 for a 16 GB version with 2-year contract. That means a pretty big subsidy from Verizon. It will likely take a short term hit to revenue from (current) customers switching to iPhones, but the long term gain in subscribers should easily make it worth it.

Verizon to Carry Apple iPhone, Ending Months of Anticipation
 
foodcritic

foodcritic

New Member
Tilted said:
The Verizon iPhone will be available for pre-order on February 3rd and for sale on February 10th - $200 for a 16 GB version with 2-year contract. That means a pretty big subsidy from Verizon. It will likely take a short term hit to revenue from (current) customers switching to iPhones, but the long term gain in subscribers should easily make it worth it.

Verizon to Carry Apple iPhone, Ending Months of Anticipation
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I am wondering what their cost really is. I mean how much is the subsidy? Obviously this is driven by demand. Most of Verizons big sellers are operating android and thus already on a data plan. THAT is the money maker right there. MOST people are not going to use their 30 worth of data every month. Me switching from an android to a Iphone wont bring in any more revenue other than the initial sale of the phone.
 
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foodcritic said:
I am wondering what their cost really is. I mean how much is the subsidy?
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At $200 to the customer, the subsidy is believed to be about $400.

foodcritic said:
Obviously this is driven by demand. Most of Verizons big sellers are operating android and thus already on a data plan. THAT is the money maker right there. MOST people are not going to use their 30 worth of data every month. Me switching from an android to a Iphone wont bring in any more revenue other than the initial sale of the phone.
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That's my point - they will lose money, at least in the short term, on people that choose to switch over to the iPhone. The gain will come from gaining new customers (and/or not continuing to lose customers that want an iPhone to AT&T).
 
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EmptyTimCup

Guest
also the iPhone will be on the SLOWER Verizon Network ....
 
foodcritic

foodcritic

New Member
Tilted said:
At $200 to the customer, the subsidy is believed to be about $400.



That's my point - they will lose money, at least in the short term, on people that choose to switch over to the iPhone. The gain will come from gaining new customers (and/or not continuing to lose customers that want an iPhone to AT&T).
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I wonder. For all we know V is paying 200. I don't know the markup from manuf. to your dist. I would assume that since the device has been around for many years that the manuf. process has been picked clean of any deficiencies and the costs of production have been reduced significantly.
 
Nickel

Nickel

curiouser and curiouser
foodcritic said:
I wonder. For all we know V is paying 200. I don't know the markup from manuf. to your dist.
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:yeahthat: A 16GB iPhone from AT&T is $599 without a 2 yr contract. ASSuming the majority of iPhones are sold within contract for $199, I really doubt that AT&T (and now Verizon) eats $400 per phone. Most likely they price them that high to discourage people from purchasing outside of a contract.
 
thurley42

thurley42

HY;FR
Nickel said:
:yeahthat: A 16GB iPhone from AT&T is $599 without a 2 yr contract. ASSuming the majority of iPhones are sold within contract for $199, I really doubt that AT&T (and now Verizon) eats $400 per phone. Most likely they price them that high to discourage people from purchasing outside of a contract.
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I'm sure there will be a lot of people who will just buy one regardless of their contract and pay the full price for it...like me lol..
 
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foodcritic said:
I wonder. For all we know V is paying 200. I don't know the markup from manuf. to your dist. I would assume that since the device has been around for many years that the manuf. process has been picked clean of any deficiencies and the costs of production have been reduced significantly.
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It's not just wild speculation. There are stock analysts that do this kind of stuff for a living - they crunch the numbers reported in, among other things, SEC filings, and figure stuff like this out. There are tons of analysts that follow Apple and spend lots and lots of time trying to sort out various aspects of its business operations.

A lot can be learned from a 10-K or a 10-Q, and based on the information in Apple's latest 10-K, I'd say that estimates that Verizon will be providing a $400 or so per phone subsidy are about right. We may not be able to figure out for certain whether the subsidy is $365 or $385, but we can certainly figure out that it isn't (just) $150.

There's a reason Apple is one of the most profitable American companies, even though it only sells a fairly narrow range of products. Beyond the (perceived) quality of its products, it is a very shrewdly and efficiently run business. Its retail margins are usually quite impressive.
 
Nickel

Nickel

curiouser and curiouser
thurley42 said:
I'm sure there will be a lot of people who will just buy one regardless of their contract and pay the full price for it...like me lol..
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I'm bummed that my contract isn't due to be renewed until August, but I figure by then they'll have released the iPhone 5 and worked out all the kinks. Patience is a virtue. :lol:
 
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thurley42 said:
AT&T's network sucks....Verizon has the best coverage hands down...and with them implementing the 4g network there won't be anyone who can match coverage or speeds....
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Empty's right though - the Verizon iPhone won't be running on the 4G network, at least not for now. You won't, for instance, be able to browse the internet while you're on a phone call.
 
thurley42

thurley42

HY;FR
Tilted said:
Empty's right though - the Verizon iPhone won't be running on the 4G network, at least not for now. You won't, for instance, be able to browse the internet while you're on a phone call.
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For now, but I try to talk on my phone as little as possible:killingme
 
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