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]
