NEW YORK ( TheStreet) -- The long-awaited arrival of the Verizon ( VZ) iPhone spells good news for Apple ( AAPL) and its investors, say analysts, with millions of new users expected to choose the iconic smartphone. The Verizon iPhone, which was unveiled at a glitzy event in New York earlier this week, ended AT&T's ( T) exclusive deal to sell the device in the U.S and is likely to further boost Apple's position in the smartphone market.
"It promises to trigger a mass migration of feature phone users to the iPhone," said Charles Wolf, an analyst at Needham & Company, in a note released on Wednesday. "The Verizon iPhone could translate into 16 million additional iPhone sales annually over the next two years." Wolf, who maintained his Apple buy rating, predicts that the Verizon iPhone could have a big impact on lower-end phones using Google's ( GOOG) Android operating system. "Virtually all of Verizon's feature phone subscribers, who previously purchased Android phones, are likely to choose an iPhone going forward when they migrate to a smartphone," he said. "
But the number of Android owners who actually switch could be small because Android's installed base in the U.S. is itself quite small." Feature phones, such as AT&T's Samsung Strive and Verizon's LG EnV Touch, are devices that contain fewer bells and whistles than smartphones, typically offering limited support for third-party software. Goldman Sachs also expects a deluge of new Apple customers from the Verizon iPhone, and raised its estimates on Wednesday. The investment firm now expects to see 69.68 million iPhones shipped in 2011, up from its previous forecast of 62.78 million. For calendar year 2012, Goldman now forecasts 91.45 million iPhone shipments, compared to its prior projection of 80.41 million iPhones. "Overall, we were positively surprised by all elements of the launch on Tuesday," explained Goldman analyst Bill Shope, in a note released on Wednesday. " Verizon's prices are in line with the pricing for the AT&T (GSM) iPhone 4 today, and the core hardware features appear to be similar for the two devices." Goldman also reiterated its Apple buy rating and 12-month price target of $430.
|The Verizon iPhone is expected to bring millions of new users to Apple.|
Apple set a record for iPhone sales during its recent fourth quarter, selling 14.1 million of the phones. Investors will be eager to hear the tech giant's comments about the impact of the Verizon deal when it reports its first-quarter results on Jan. 18. Shares of Apple rose $2.22, or 0.65%, to $343.86 on Wednesday, as the Nasdaq gained 0.64%. Verizon's stock also rose modestly, climbing 12 cents, or 0.34%, to $35.48. --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org.