A month ago I wrote a negative article on Apple (AAPL) and Verizon (VZ) stating that Apple has a vise grip on their suppliers due to the high subsidies Apple charges. Sanford Bernstein analyst Craig Moffett has put out a report to his clients titled "If This Is a Duopoly, Why Aren't the Duopolists Making More Money?" He talked about it on a recent Bloomberg Radio interview stating that Verizon and AT&T (T) have 60% of US wireless subscribers and they have 80% of the free cash flow from wireless in this country. Yet because of Apple, Verizon can't even earn their cost of capital and AT&T is just barely above their cost of capital. Apple is capturing all of the return from the US wireless industry these days.
I also suggested the idea that the US justice department would investigate Apple's business practices, or that Apple's suppliers would lobby to their representatives of unfair practices. Since then, the US Justice Department has opened a collusion case against Apple and certain book publishers for price fixing. Is this the predecessor to an even bigger case against the tiny company from Cupertino CA? Could the fact that the publishers were charged give large carriers such as AT&T and VZ the scare they finally needed to push back and cut the subsidy they have to pay Apple? If they do push back and request a subsidy cut, how much will this cut into Apple's future revenues?
I think the monopoly is starting to falter. The carriers are getting ahead of the justice department; they don't want the issues the book publishers had to deal with.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.