Apple shares hit another all-time high after report that an iPhone on Verizon Wireless is near

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Verizon report sends Apple shares to all-time high

SEATTLE — Apple Inc. shares reached an all-time high Tuesday after a newspaper report said the iPhone could find a new U.S. sales outlet through Verizon Wireless.

Since its 2007 launch, the iPhone has been available in the U.S. only to subscribers of AT&T Inc., which uses a cellular network technology called GSM.

The Wall Street Journal reported late Monday that Apple plans to release an iPhone this year that would work on CDMA networks — a technology used by Verizon Wireless and Sprint Nextel Inc. in the U.S., as well as some carriers overseas.

Apple and Verizon declined to comment on the matter. AT&T spokesman Mark Siegel said the iPhone will be an important device for the company for quite some time.

AT&T has thrived as the sole U.S. iPhone carrier despite paying a massive subsidy to Apple for the exclusive rights to offer the phone. At the end of 2009, it was the second-largest wireless carrier behind Verizon Wireless in terms of subscribers.

But the iPhone’s popularity has taxed AT&T’s networks in cities such as New York and San Francisco, leaving the carrier vulnerable to an aggressive ad campaign from Verizon. AT&T said in January it would spend an additional $2 billion to improve its network this year.

Apple and AT&T have not said when their exclusive deal will end, though some analysts have predicted Apple will begin offering the iPhone through multiple U.S. carriers sometime after it unveils the next-generation iPhone this summer.

Brian Marshall, an analyst for Broadpoint AmTech, estimates AT&T pays Apple $450 per iPhone, more than the $300 he estimates all other carriers pay per device.

But having more than one U.S. iPhone carrier can only help Apple, Marshall said. In the U.K., Canada, Brazil and France, the most recent markets to switch from a single iPhone carrier to multiple, unit sales took off when customers on more carriers could choose the phone.

Morgan Keegan analyst Tavis McCourt cautioned that it’s not certain that Apple and Verizon could agree on terms for an iPhone that runs on CDMA networks. CDMA capability could also be used to get the iPhone onto the networks of China Telecom Ltd. and South Korea’s SK Telecom.

Several analysts said it appears AT&T will still be the only iPhone carrier in the U.S. at least through 2010.

Marshall believes Apple extended the deal until 2011 in exchange for a flexible data plan for the iPad, Apple’s new tablet device. People who buy iPads with cellular data connections can pay AT&T month by month for service, instead of having to sign a contract, and choose a $15 or $30 monthly plan based on data consumption.

Apple shares rose as high as $237.48 on Tuesday, an all-time peak, before pulling back to $235.85, a 1.5 percent gain for the day. Apple’s stock has jumped about 13 percent this month in anticipation of the iPad launch, which begins Saturday.

Shares of Verizon Communications Inc., which owns a majority of Verizon Wireless, rose 2.6 percent Tuesday, while the stock of its partner, Vodafone Group PLC, edged up 0.8 percent.

AT&T dropped 2.1 percent. Also hurt were shares of Palm Inc. and Research In Motion Ltd., two makers of smart phones that rival the iPhone and are available through Verizon Wireless. Palm shares lost 3.6 percent and RIM fell 1 percent.