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Verizon (VZ) is betting the farm on a high-stakes bid to supplant the Apple (AAPL) iPhone with its Droid device. In the long run this may be a good move, but in the short run the ad blitz and high cost of this rollout are really going to eat away at Verizon's bottom line.
While spending on tech devices has been strong, the bottom line is that the initial price point for the Droid may be a bit high and it will take some time for consumers to catch on to this smart phone, considering how loyal Apple users are. Things may change in a few weeks if I hear some favorable news, but for now VZ is a sell.
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Reader Comments (Page 1 of 1)
12-13-2009 @ 6:07PM
Christian said...
"Droid may be a bit high and it will take some time for consumers to catch on to this smart phone"
Are you high? Projections indicate that a million Droids will be sold by the end of the year. That's $200M gross sales if you assume each phone was purchased at the 2 year contract price (which many were not).
The real money is in the plans anyway, as in a couple thousand dollars per droid over the 2 years or so of contract.