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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (49362)	9/12/2012 1:15:08 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78470

Re VZ - i don't see VZ as an iphone5 play. If anything, I see it as an iphone 5 bear play. AAPL sells their iphones for ~600$ wholesale per analyst reports. Typically, the carrier charge the customer ~200$, which mean they essentially subsidize the iphone with 400$ for a 2 year contract. That is about 17$/month. Now, if customer would not care about the new iphone and keep their old phones for a bit longer, the carrier would essentially earn another 17$/month on each customer. Given the high smartphone penetration, most iphone sales are probably replacements, so my view may not be totally unrealistic. Of course a customer of contract has other options and could switch to another carrier or prepaid for save a few $ but some may just stay due inertia. This would mean free money to the carriers. Besides that VZ is not cheap by most metrics. This stock is loved by dividend investors, and is valued at as a bond substitute and hardly cheap.