IPhone Uncertainty Causes Verizon Downgrade by Credit Suisse

IPhone Uncertainty Causes Verizon Downgrade by Credit Suisse

Verizon getting the iPhone later this year is no longer a done deal in the mind of one financial analyst. Indeed, Credit Suisse has downgraded the carrier, expecting AT&T could retain an exclusive iPhone contract until at least mid-2011.

The financial firm downgraded its recommendation for Verizon to Neutral, down from Outperform, and shaved its target price to $30 per share, down from $32.

Although Verizon may “eventually” be awarded an iPhone contract as Apple drops its exclusivity in the U.S., “there is much greater probability that AT&T keeps exclusivity for another 12-18 months than investors realize,” Credit Suisse told investors Thursday.

Prevailing wisdom previously was that AT&T’s exclusive contract would end in June of this year and Verizon was the likely beneficiary. However “we no longer think AT&T will lose iPhone exclusivity in mid-2010,” the financial company writes. The delay could benefit Research in Motion’s RIM in the U.S., it said.

The analysis comes a day after reports Verizon and Apple were “still talking” about an iPhone deal. AT&T may have underbid Verizon and other carriers to win the iPad contract. Although the carrier would only say its iPad data plan “pricing speaks for itself,” AT&T beat out Sprint, T-Mobile and others to connect iPad users.

Apple recently came to AT&T’s defense amid questions about the carrier’s 3G network. Apple’s chief operating officer Tim Cook told reporters he had “very high confidence” AT&T can correct problems that have plagued reception.

[Via Barron’s]

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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