It’s a pretty sure bet that a new version of the iPhone is coming this summer, but whether a version for Verizon Wireless is on its way continues to be hotly debated. Either way, those who think AT&T’s future success depends on keeping its exclusive deal with Apple for the device, are dead wrong, says a new report from Barron’s.
Coming off a better-than-expected earnings report last week – despite a 21-percent hit from a one-time health-care charge – AT&T is in position for solid growth, Barron’s reports. The financial magazine says many are underestimating the telco giant’s ability to sell services like voice, broadband and data.
Overall, the big telcos have been battling a slowdown in number of postpaid subscribers, so they’ve had to focus on other areas. In its earnings report, AT&T said its average cost per user (ARPU) for other services is rising, somewhat offsetting the poor showing on the traditional postpaid side.
Sure, if AT&T has its druthers, it would probably like to keep iPhone exclusivity; after all, the iPhone is synonymous with smartphone success, and therefore, with AT&T. But it seems that its business model is working, and has potential with or without the exclusive contract.
Last week’s earnings gave a Pacific Crest analyst enough confidence to slap an “outperform” rating on AT&T shares, giving them a target of $30. The stock dropped just a hair on Friday, but had rebounded by early afternoon trading on Monday, up 5 cents, to $26.30.