iPhone Sales Could Double With Verizon Deal

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Apple (AAPL) could boost iPhone sales by “at least 100% in units” by selling the phone at Verizon (VZ), Bernstein analysts Craig Moffett and Toni Sacconaghi argued today, in a report summarized by Barron’s.

Makes sense: Verizon, since acquiring Alltel, is now the biggest U.S. carrier, with millions more subscribers than AT&T (T), Apple’s exclusive U.S. carrier.

But a Verizon deal is not necessarily imminent. Besides Apple’s AT&T exclusive — which runs into next year, at least — there’s technical and business hurdles to selling iPhones at Verizon.

  • Verizon runs a different network, called CDMA, than AT&T’s (and the rest of the world). Apple is probably hesitant to make a CDMA phone. And Verizon’s 4G network, built on LTE, won’t be ready for most markets until late 2010, and won’t be ready for everyone until 2011 or 2012.
  • Apple probably won’t be able to maintain its industry-leading margins. While a Verizon deal might double iPhone unit sales, it means AT&T (and Verizon) won’t pay as much wholesale per iPhone without an exclusive deal. That could be a $100 to $200 revenue cut per phone, the Bernstein analysts estimated.

Don’t miss today’s Chart of the day:Apple, RIM Swallow Mobile Industry Profits.”

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