An LTE-enabled iPhone 5 may prompt AT&T customers to jump ship to Verizon, says Jefferies & Co. analyst Thomas Seitz.
In an investor's note out today, Seitz said that the new iPhone is likely to be LTE capable, a view shared by many analysts and Apple watchers. If so, Verizon stands to attract at least some customers away from AT&T.
Verizon's LTE network currently reaches around 230 million people across 337 markets, more than all of the other U.S. carriers put together. By year's end, Verizon is aiming to cover an additional 260 million people in more than 400 locations.
In contrast, AT&T is still in the early stages of building its LTE network. The company covers around 80 million people and is likely to add another 70 million by the end of 2012.
"We believe this network advantage could lead to a share shift towards Verizon, primarily at AT&T's expense," Seitz said, "which we estimate could see its market share of iPhone sales decline modestly to 45 percent in 3Q12 from 47 percent in 2Q12."
Such a decline in market share is minor. However, the analyst believes two other factors may work against AT&T over the second half of this year.
First, many of the carrier's iPhone customers who purchased their phones during the third and fourth quarters of 2010 will be coming off contract. Second, AT&T upped its prices when it launched its shared data plans in July.
Verizon's shared data plans also force certain customers to pay more per month. But now the two carriers are on more or less equal footing with their shared data plans, offering consumers less incentive to stick with AT&T.
"Though its customers still have a choice to stay with the traditional plans, those who find it cheaper to move to the shared data plans are going to find that AT&T's price advantage vis-a-vis Verizon has shrunk," the analyst said.
Combine all of these factors, and more AT&T subscribers buying a new iPhone may be tempted to switch to Verizon, especially if their contracts are up.
Overall, Jefferies & Co. projects U.S. iPhone sales of 11.3 million during the calendar third quarter, 5 million of them iPhone 5 handsets.
If Apple achieves those numbers, it would see a 156 percent jump in total iPhone sales over last year's third quarter.
Apple is expected to unveil the new iPhone on September 12 with sales to start on September 21, though all of that is unofficial. The launch of Apple's iPad Mini may follow with its own event in October.