Trouble in Tech Land - Barrons
Handset vendors, carriers could start to get nervous, Barron's reports
Barron's Technology Trader columnist Eric Savitz says, some very odd things are going on in the mobile-phone market -- things that should make both the handset vendors and the carriers a little bit nervous. For starters, the one worm in Apple's (AAPL) otherwise impressive December-quarter earnings was that iPhone sales were shy of expectations. A few days later, Motorola (MOT) reported weak results, selling far fewer phones overall in the quarter than the Street had forecast. Qualcomm (QCOM) likewise provided disappointing guidance, as pricing pressure on handsets took a toll on the mobile-phone chipset provider. Crossing up Savitz's still-nascent theory that handset demand is weakening, Nokia (NOK) had a surprisingly strong quarter, recovering the five points of smartphone market share it had lost in the previous one. Of course, the really big mobile-device news last week came from Apple, with the rollout of the iPad. Both AT&T (T) and Verizon Wireless recently cut their data-plan rates, and there will be pressure to further trim them to promote adoption of all the new connected devices. The trend should intensify when 4G networks arrive in a couple of years. So, AT&T and Verizon (VZ) could be headed for a price war that will produce more customers, but also higher capital investment and thinner margins. Both stocks have appealing dividends, but Savitz see trouble ahead. And there's a special time bomb out there for AT&T, which at some point will lose its exclusive hold on the iPhone
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