With reports of the iPhone heading to Verizon
Another day, another rumor
It's not that there isn't ample rationale for Apple
Why you should remain skeptical
Despite how much sense an Apple and Verizon tie-up makes, we've seen these head fakes from even the most trusted financial sources before. In March of this year, The Wall Street Journal reported that Apple was working on a CDMA iPhone that'd be compatible with Verizon's network. In June, Bloomberg threw its weight behind a Verizon-based iPhone report.
Still, the vast production of differing components needed to equip a launch for a large carrier like Verizon requires long lead times. If Apple is readying to end its exclusive relationship with AT&T
Qualcomm: always the source of the rumor
As always with a Verizon-inbound iPhone, Qualcomm
So, Qualcomm gets a natural bump based on any iPhone news. However, it's also important to note that iPhone sales might come at the expense of Android models using Qualcomm's Snapdragon processor, so there's a healthy level of cannibalization that should temper Qualcomm investors' enthusiasm for this bit of news.
Complicating matters is the unlikely situation where Apple is buying chips from Qualcomm not for a Verizon iPhone, but to power iPhones on AT&T's network. While Qualcomm is known mainly for its expertise developing chipsets for CDMA networks like Verizon, it also produces solutions tailored to a network like AT&T's.
Winners and losers of a Verizon iPhone
If rumors do prove correct, notable smartphone companies that would be affected include Samsung, HTC, and Motorola
Lastly, Sprint Nextel
If an iPhone for Verizon is coming in time for early next year, expect reports to keep flowing out over the next two months. There's just too many suppliers to keep a launch this large a secret.
While Apple loses benefits from for its exclusive arrangement with AT&T (the company collects higher margins thanks to generous subsidies from AT&T, which would decrease if they used multiple carriers) and has to create separate models for differing networks and extend its list of suppliers, this is a massive opportunity for the company. The iPhone's strength in international markets has proven that the benefits of pursuing a multicarrier strategy outweigh any downsides.
Not only that, but Apple gets to slow down the growth of competing Android models. While the two platforms are successfully co-existing for now, it's never a bad idea to put the brakes on a rival that's attracting a significant amount of development talent and diminishing Apple's lead in dynamic apps that consumers crave.
So show caution, but if you're an Apple investor, there's every reason to be excited about a Verizon iPhone.