Apple (NASDAQ:AAPL) may be getting a major new network partner, according to Merrill Lynch analyst Scott Craig, who wrote in a research note on Thursday that “speculation [was] heightening” for T-Mobile USA to announce a partnership with the iPhone maker very soon.
Why Does the Analyst Think a Deal is Impending?
Craig wrote that Deutsche Telecom would likely announce a deal as early as next week to bring the iPhone to its U.S. subsidiary, Fortune reported. This comes despite recent comments from T-Mobile USA chief operating officer Jim Alling, who said that the expenses associated with a possible iPhone partnership were prohibitive. “Make no mistake about it: We would love to carry the iPhone,” Alling said at a conference in Barcelona. “However, we want the economies to be right for us.”
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However, T-Mobile, which already has about 1.5 million iPhone customers using unlocked devices, recently upgraded its compatible high-speed HSPA+ network to higher download speeds. And as Alling pointed out, the lack of an official iPhone partnership has caused the carrier to bleed customers, who prefer moving to rivals and Apple partners AT&T (NYSE:T), Verizon (NYSE:VZ), or Sprint (NYSE:S).
How Could the Deal Impact Apple?
The country’s fourth-largest carrier holds immense growth potential for the iPhone maker. Craig predicted that a deal with T-Mobile would increase Apple’s access to 98 percent of the U.S. post-paid market and 75 percent of the country’s total mobile subscribers. Those high numbers will be welcomed by the company and its investors.
“While this would be incrementally positive, any financial impact would be limited,” Craig added, estimating that the deal would add about 4 million iPhones to Merrill Lynch’s current estimate of 179 million units sold in calendar year 2013. It would also help boost Apple’s revenue top line by 1 percent and its earnings per share bottom line by 2 percent.
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