Citigroup analysts: Apple will add U.S. iPhone carriers in 2010 or 2011

“Citigroup’s Richard Gardner and his colleagues Michael Rollins and Jim Suva today assert in a research note that it is highly likely that Apple will add additional carriers in 2010 or 2011 – and that Verizon is the most obvious addition,” Eric Savitz blogs for Barron’s.

In a list of “reasons that Apple will eventually move beyond its current deal with AT&T” Gardner includes:

• Apple will remain focused on full-featured devices with a uniform user experience, and likely won’t offer cheaper, less capable phones. He says added carriers will likely be subject to some of the same strictures as AT&T: no co-branded handsets, no customer start screen, no revenue share on content downloads, and an all-you-can-eat data plan.

• Sales opportunities into the AT&T base are declining; 12% of post-paid subscribers already using the iPhone; they think the ceiling is 20%-25%.

• Citi estimates 215 million U.S. post-paid subs overall by 2010; that gives Apple 150 million user incremental target market at Verizon, Sprint and T-Mobile. Based on 20% penetration, that suggests 30 million user opportunity, plus subsequent replacement phones.

• Verizon alone could contribute 10-20 million additional iPhone users over 5 years.

• “Ultimately, non-exclusivity makes financial sense for Apple,” they write, asserting a potentially doubling of units in the first year, more than offsetting any reduction in ASP and gross margin in a non-exclusive distrubtion scenario.

More reasons in the full article here.

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