AT&T To Keep iPhone Exclusivity Through 2010: Credit Suisse
Most people are concerned about the Super Bowl if they think about betting right now, but Credit Suisse is making its own bets. Jonathan Chaplin, research analyst with Credit Suisse, downgraded Verizon stock to a “neutral” rating, betting that the iPhone will remain safely ensconced with AT&T for 2010.
Chaplin did agree that the iPhone will move to other carriers, just not in 2010.
“Our analysis suggests that Apple will eventually sell the device at all carriers; however, there is a much greater probability that AT&T keeps exclusivity for another 12-18 months than investors realize. We think this has profound impacts for Apple, the carriers and the other handset OEMs.”
Chaplin bases this contention on a 60-page (you read that right) report and a probability analysis. Here’s what he said:
“We conclude there is only a 50% probability that it (exclusivity) ends in 201. Next, we try to determine whether AT&T bids for another year of exclusivity if exclusivity does end in 2010. We conclude they would and they can afford to compensate Apple such that Apple would be economically indifferent.“Our approach yields a 25% probability for this outcome. Taken together, we see a 75% probability that AT&T keeps exclusivity for another year.”
Probability, also known as guessing. In effect, this is an educated guess that the iPhone will remain with AT&T exclusively for another year. In reality, no one truly knows.
I have said previously that I feel that it would be a waste of time for Apple to move to Verizon prior to its LTE rollout. Why invest in dead technology like CDMA? I also posited that if they were to move to another carrier this year, it would be far easier to add T-Mobile, since that’s another GSM carrier, than a CDMA one.
Of course, everyone wants the iPhone to move to Verizon, assuming that such a move will fix all its connectivity woes. It might, instead, bring the Verizon network to its knees.
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