I have attempted but not been able to confirm the report. Multiple checks after BGR's report show that there may be some truth to the report. However, it appears that AT&T retail staff is doing a commendable job correctly pointing out the pros and cons of various devices. AT&T is pushing Google's Android based Motorola Atrix HD phone. There is a special deal on the phone that includes a free car dock and $40 in free accessories.
AT&T retail staff is quick to point out that Nokia (NOK) Lumia 900 is a great phone but not upgradable to upcoming Microsoft (MSFT) Windows Phone 8 operating system. When asked which one is the best phone, responses from AT&T sales people varies between HTC One X and Samsung Galaxy S III. When specifically asked about iPhone, AT&T retail staff is quick to point out the short comings including no LTE and the small screen.
From our multiple checks, it is clear that if a consumer walks into one of the several stores where we checked with an open mind, the consumer is not going to walk out with an iPhone.
If BGR report is true, understanding AT&T’s reasons for such a directive is important for investors. If the main reason is that AT&T does not have enough inventory of iPhone 4 and iPhone 4S ahead of iPhone 5 launch, it is bullish for Apple stock.
On the other hand if the reason is the amount of subsidies AT&T provides on iPhones, it is a huge negative for Apple stock. Prior to Apple earnings, potential cuts in subsidies offered by carriers on iPhones were looming large among the analysts. After the earnings, the concerns have faded. AT&T, Verizon (VZ), and Sprint (S) offer larger subsidies on iPhones than other phones.
The big question for investors is, “Will carriers offer the same level of subsidies on iPhone 5 as they offered on iPhone 4S?” Any investor who infers this information correctly before the crowd will have an edge. Stay tuned.
About Me: I am an engineer and nuclear physicist by background. I founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Write me: Nigam@TheAroraReport.com. Follow me here and get email notification when I publish a new article.
Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, $525, $629 and $568. Subscribers also have a long position in Nokia.
