Verizon iPhone Coming Soon - Analyst Blog

Verizon Wireless, a joint venture between Verizon Communications Inc. (VZ">VZ) and Vodafone Group plc (VOD">VOD), is expected to announce the timing of its long-awaited sale of Apple Inc.'s (AAPL">AAPL) iPhone on January 11. Verizon will also announce the sale price of the iPhone on the same date.

The sale of iPhone by Verizon will mark the end of exclusivity that its largest competitor AT&T Inc. (T">T) iPhone has been enjoying since 2007. The expected sale of iPhone and the recent launch of high-speed fourth-generation (4G) Long-Term Evolution (LTE) network are likely to boost Verizon's growth prospects going forward.

Last week, Verizon announced its plans to launch ten devices –– four smartphones, two tablet computers, two notebooks and two additional 4G devices by mid-2011. The devices, expected to support the 4G network, would give Verizon a competitive advantage over Sprint Nextel Corp. (S">S). In 2010, Sprint, the third-largest wireless operator, was the first to launch handsets across its nationwide 4G service. Sprint provides its 4G network in 71 U.S. markets and covers approximately 120 million people. AT&Texpects to roll out its 4G services in mid-2011 and plans to launch 20 smartphones this year.

In the wireless business, Verizon continues to be the market leader in providing wireless voice and data communication services in the U.S. Verizon also continues to extend its nationwide coverage with third-generation (3G) wireless technology, and invest heavily in the more advanced 4G infrastructure.

Verizon started deploying its high-speed LTE network at the end of 2010 with average download speed more than five-times faster than the company's 3G network. It currently covers approximately 39 markets with around 110 million people.

Verizon expects the 4G LTE network to cover virtually its entire nationwide 3G footprint by the end of 2013. However, Verizon does not have any handset that can support these LTE services at present. Additionally, as part of its 4G LTE network deployment plans, Verizon is making efforts to work with rural companies to collaboratively build and operate a 4G network in those areas, using Verizon Wireless' 700MHz spectrum.

We expect the increased penetration of smartphone and other integrated devices to boost data revenue. However,the 4G infrastructure may also be an obstacle if other service providers shift to different generation technologies.

Consequently, we are currently maintaining our long-term Neutral rating on the stock with a Zacks Rank # 3 (Hold) Rank.

 
APPLE INC (AAPL): Free Stock Analysis Report
 
SPRINT NEXTEL (S): Free Stock Analysis Report
 
AT&T INC (T): Free Stock Analysis Report
 
VODAFONE GP PLC (VOD): Free Stock Analysis Report
 
VERIZON COMM (VZ): Free Stock Analysis Report
 
Zacks Investment Research