Verizon: Definitely Not The Apple Of My Eye

Sep.26.11 | About: Verizon Communications (VZ)

From AppleInsider:

The nation's largest wireless operator has submitted a request to the United States District Court for the Northern District of California to file an amicus curiae, or "friend of the court," brief in support of Samsung (OTC:SSNLF), Florian Mueller of FOSS Patents reports. The brief would allow Verizon (NYSE:VZ) to intervene as a third party in the case.

Really? Was it a surprise?

While it wasn't a surprise that Verizon would do "something" [like behind the scenes deals with Google (NASDAQ:GOOG) and Android makers] to ensure Android's success, I was surprised at why Verizon would make their stance (and their bias) this visible!

What does this mean to Apple shareholders?

You should be happy! If anything, this is a validation of AAPL's success in disrupting the mobile market. Consider this patent filed by AAPL way back in 2010. What ramification does this patent have on carriers? To be able to CHOSE which provider you wish to sign up with at the time of purchase (say, at an AAPL store) changes the game again! Advantage? AAPL. Verizon (by betraying AAPL with this silly move), has pretty much pissed off a sleeping giant! With friends like these, who needs enemies?

It isn't a secret that carriers would prefer to keep most of the margins on the phones they sell; the only phone that is currently immune to that is the iPhone. Great reminder why cash is definitely king! I would love for AAPL to find a way of being independent of the carriers!

AAPL's Q4 ended recently. Interestingly enough, they opened their first store in Hong Kong as well! Guidance as per Fortune:

  • The company's guidance (offered in July):
    Earnings of $5.50 on sales of $25 billion
  • The consensus of 42 professional analysts (via Thomson Financial):
    Earnings of $7.10 on sales of $28.99 billion
  • The consensus of 7 amateur analysts (submitted to Apple 2.0):
    Earnings of $9.20 on sales of $34.36 billion

Despite the impending Greek "tragedy", AAPL has held up very well. Given the recent implosion of some big names - HPQ, RIMM, and NFLX, one has to wonder where all these funds will go when the dust settles.

It has held up well against its dividend paying peers ...

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It has made a new high even after Steve resigned!

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As always, I expect AAPL to beat their own estimates AND the "ANALysts" estimates. Q1 2012 will be bigger than anything we've ever seen; driven again ... by China!

How am I playing this? Adding on the dips and canceling my Verizon account!

I'd be very surprised if it stayed below $460 by year end.

Disclosure: I am long AAPL, GOOG.