Apple: A Verizon Deal Could Double iPhone Sales

Apple (AAPL) has a big decision to make: whether or not to extend its exclusive relationship with AT&T (T) for U.S. distribution of the iPhone. (The current deal reportedly expires sometime in 2010.)  Verizon (VZ) would certainly like to get its hand on the iPhone (and so would Sprint (S) and T-Mobile , for that matter). The question: is Apple willing to take a hit on margins to dramatically increase unit sales? Bernstein Research analysts Craig Moffett and Toni Sacconaghi jointly took a look at the issue in a research note this morning. They contend that adding Verizon could allow Apple to boost sales by at least 100% in units, but that it would likely result in a cut in revenue per phone of $100 to $200. The analysts note that for AT&T, the iPhone provides both a customer acquisition tool and a customer retention tool. A non-exclusive deal, they say, would reduce the value of the phone to AT&T and likely result in a reduction in the subsidy per phone from an ... (link)