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MARKET CURRENTS
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Saturday, May 18
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6:23 PM 32% of Q1 U.S. smartphone sales involved prepaid phones, up from 21% a year ago, says NPD. That trend could spell trouble for AT&T (T) and Verizon Wireless (VZ, VOD), whose recent growth has been heavily tied to selling costly postpaid data plans. With 72% and 61% of the carriers' postpaid bases now respectively on smartphones, they face pressure to gain prepaid buyers without cannibalizing postpaid subs. Cannibalization fears have led AT&T and Verizon to make their prepaid plans 3G-only; Sprint (S) and T-Mobile (TMUS) offer 4G. A mix shift towards unsubsidized prepaid phones could also be a challenge for Apple (AAPL), estimated to have just 8% of the Q1 U.S. prepaid smartphone market (though that's up 4x Y/Y). 9 Comments
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11:57 AM "There are only four sources of high-quality maps," Google, Waze, Navteq, and TomTom (TMOAF.PK), says Rolfe Winkler, and given Facebook's rumored $1B acquisition of Waze, TomTom may become an attractive takeover target for the likes of Apple (AAPL) and others who, while able to drive a hard bargain on map licensing fees, may prefer to bid for the Netherlands-based company rather than worry that a rival will acquire it. TomTom trades at an EV/EBITDA ratio of just 6x. (From December: Rabobank puts AAPL/TomTom odds at 30%) 21 Comments
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