T-Mobile (NYSE: TMUS ) and Sprint (NYSE: S ) are reportedly moving closer to a merger, which would leave three major U.S. wireless operators from the current four. The idea is that a stronger T-Mobile/Sprint could compete on a more even playing field with AT&T (NYSE: T ) and Verizon (NYSE: VZ ) , who have larger networks.
But don't go shedding tears for AT&T and Verizon. If the merger goes through, it would leave only three major players in the U.S. wireless business and an industry with a small number of large players often enjoys comfortable margins and less cutthroat competition. Think of the cereal business, major beer producers, or big oil, who all enjoy high margins and plentiful profits along with little disruptive competition.
Today, Sprint and T-Mobile are scrappy underdogs who will forego price to attract customers, leading to price wars and lower margins. But if a merger happens, those days are likely over, which will be advantageous to AT&T and Verizon. Specialist Travis Hoium gives his thoughts in the video below.
The future will be even more connected
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!