Verizon Wireless Up

Verizon Wireless (VZ) shares advanced early Tuesday after a report that Apple (AAPL) plans to release an iPhone for the Verizon network sometime in the next year.

The report in The Wall Street Journal sent Apple shares to a new high and gave a boost to Verizon as well. Currently, Apple’s iPhone works only on AT&T’s (T) network.

“Should VZ achieve handset parity — through the introduction of new handsets and, potentially, an iPhone — we would expect customer growth to accelerate and data [average revenue per user] to increase,” wrote Jeffries analyst Jonathan Schildkraut, who maintained a buy rating. However, the analyst notes that iPhone subsidies are the highest in the industry and Apple doesn’t share revenue from apps with the carrier. So increased adoption of Android devices is important.

The bottom line: “Although we would view the introduction of a CDMA iPhone by VZ as a meaningful catalyst for shares, we also believe increasing traction from Android-based devices could ultimately level the handset/app playing field without broad availability of AAPL’s device,” writes Schilderkraut. “From an economic perspective, this would likely be a better outcome for VZ.”

Research in Motion Down

Research in Motion (RIMM) shares were down at midday Tuesday as investors braced for earnings and digested news on the competing iPhone.

Analysts expect the company to post fiscal fourth-quarter earnings of $1.28 a share on revenue of $4.3 billion when it reports after the close.

Recent channel checks show that the BlackBerry maker performs well across all major operators, writes William Blair analyst Anil Doradla. “The North American smartphone market is becoming more competitive, but we expect the pressure in North America to be offset by strength from international expansion,” Doradla wrote.

But not helping on Tuesday was the report in the Journal that Apple plans to release an iPhone this year designed to work on the Verizon Wireless network, broadening the reach of the phone, which is currently available only to AT&T subscribers.

The bottom line: “With no new product announcements, we expect the [Research in Motion] to demonstrate margin stability, limiting downside entering the quarter,” wrote Willliam Blair’s Doradla before the report on Apple.

But investors see more competitive pressure on the horizon with the iPhone potentially expanding to more networks.

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