Apple iPhone Sales Dragging AT&T Net Lower? (AAPL, T, VZ)
Sometimes a win for a supplier is not always a win for a carrier in the world of telecommunications. UBS has a mixed research report that is upping Apple Inc. (NASDAQ: AAPL) in iPhone sales targets but is lowering estimates…
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UBS expects that AT&T will activate 4.5 million phones this quarter. The earlier estimates was for 2.5 million iPhones. UBS noted that this will likely push AT&T’s post-paid total subscriber adds to about 800,000 from a prior target of about 700,000.
This is obviously good for Apple. Unfortunately, it may be worse than a zero-sum game for AT&T. UBS believes that AT&T should face tighter margins in its wireless unit because of a switch to a newer pricing package on tiered data plans. As a result, UBS cut $0.05 from EPS estimates to $0.55. This is not even without as much network capacity expansion that AT&T still needs to conduct with its cellphone tower rental.
As the market is soft, Apple is down and there is no boost for Apple shares: AT&T is down 0.6% at $27.27 and Apple is down only 0.3% at $257.91.
Verizon is actually up by $0.02 at $30.22 this morning. Maybe the company should consider not even fighting AT&T on price after all the network comparison issues that were a part of the AT&T and Verizon network coverage plan earlier this year.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
