UBS Analyst’s Forecast About AT&T and Verizon in 2011

Written by GdroiD Sunday, 05 December 2010 04:18

The surprising report recently delivered by John Hodulik, an analyst from UBS Securities, stated predictions about AT&T explained how they will fare once their exclusivity on Apple’s iPhone over. Hodulik’s estimation on AT&T for 2011 has been raised, whereas the estimation for Verizon has been lowered. However, he added that Verizon is believed to finally gain the ability to sell iPhones in the first quarter of next year.

Holdulik predicted that AT&T may lose some costumers due to the tight competition from Verizon but he didn’t make any prediction related to mass migration away from AT&T. Thus, the company will not lose any subscribers on a net basis and they will also save savings since they need not spend much on iPhone subsidizing.

AT&T is foreseen to sell approximately 40% of the predicted 22 million iPhones planned to be sold in 2011. However, there are points that may result in a net higher earnings-per-share for AT&T which is the combination of market growth, competing smartphones, and savings on subscriber subsidies.

Another prediction comes to Verizon regarding the selling of iPhone is the estimated number of the units sold is about 13 million in their first year. Still, they must spend large amount of money subsidizing the phone, this way Verizon customers would prefer to switch or upgrade phones rather than pull customers from AT&T. Hodulik’s assumption about it is that there will be 77% will already be Verizon customers. So, Verizon will gain subscribers but lose cash when they pay the subsidies and upgrade the network to fulfill customers demand.

Related to Holdulik’s estimation above, it is predicted on some assumptions like the notion that Verizon is reported about to sell the iPhone at any point in 2011. The iPhone selling may less near on the early of the year, meanwhile the rumor out there showed the certainty of Verizon deal in 2011 for months, although there are no evidences found regarding the deal yet. Holdulik still believes AT&T exclusivity will end by the end of this year, so it is likely.

Holdulik prediction which invited questions is about the version of the iPhone Verizon eventually sold is predictably will not be universally compatible, also other companies will not gain the ability to sell iPhones in United States next year. On the contrary, investor analyst reports over the predictions are not totally believed since they are heavy with caveats and disclaimers. It is claimed that such predictions are not a science and the forecasts are just UBS opinions, nothing more.