Verizon, AT&T War Hinges on iPhone

Sprint would probably be left behind. One of the company's "hot" product makers, Palm (PALM), is likely to be acquired after its new offerings missed the mark with customers. The network has no blockbuster phones on the horizon to compete with those of AT&T and Verizon.

It appears that cell-phone service providers are essentially moving towards the utility model. With huge dividends of 6.3% for AT&T and Verizon, and little growth projected, big returns seem unlikely. However, Verizon and AT&T look appealing if you're looking for dividend income in a low-risk package. Their low beta values of 0.7 mean the stocks don't swing as widely as market averages. Otherwise, investing in the phone makers looks like the best bet for solid share price gains. Either way, avoid Sprint.

-- Reported by David MacDougall in Boston.

Prior to joining TheStreet Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.

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