Verizon Seeing Bad Times? Well, it Could Be the Apple iPhone Deal!

March 3, 2011, By Sanjeev Ramachandran

Whoever thought a mega deal could be a speed breaker too? Well it seems Verizon is currently going through such a phase. Going by what we just stumbled upon, the US carrier could be switching themselves on to regret mode for having signed the iPhone deal. The reason: A new iPhone could impact quarterly earnings whenever it arrives!

In the short term, Verizon would have to undergo such a suffering. We all know a new iPhone version is on its way, and Verizon will now have to switch their unlimited mobile data plans with usage-based pricing around the middle of summer.

Apple’s strategy of launching their products during summer is seen as upsetting Verizon’s data plan route map, thereby making it incur losses. Verizon Chief Financial Officer Fran Shammo’s statement at a webcast, “if there happens to be a new one that comes out, that quarter might not look so good” indeed sums it up.

Though Verizon, which pays subsidy for customers who go in for a two-year contract, could be among profits, an unsubsidized Verizon iPhone that costs $649.99 could mean that the carrier subsidizes Apple customers by $449.99. That could, in turn, also mean that the iPhone could bring in no gains for Verizon at the end of the day.

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