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Verizon (VZ) Could Be Big Winner with LTE iPhone?

Verizon Communications (NYSE:VZ) has been a partner of Apple Inc. (NASDAQ:AAPL) through the various incarnations of the iPhone, but it has generally been second in sales to iPhone leader AT&T Inc. (NYSE:T). However, now that the iPhone 5 has been launched and has LTE capability, does that open the door for Verizon to grow on its leads as the top wireless carrier in the U.S.?

Verizon Communications Inc. (NYSE:VZ)

One the one hand, it may seem that the iPhone by Apple Inc. (NASDAQ:APPL) may be the perfect partner for Verizon Communications (NYSE:VZ), which has been building out its 4G LTE network for quite a while and reportedly has twice the capacity built out of any other carrier – AT&T Inc. (NYSE:T) and Sprint Nextel Corporation (NYSE:S) are trying valiantly to catch up – and is expected to be fully built out by the middle of 2013, according to CFO Fan Shammo.

The 4G LTE network has been in the works for a while, as many iPhone 4 and 4S users have been searching for faster speeds almost from the day those phones came to market. Verizon Communications (NYSE:VZ) took the lead in the race, and seems to be the best-positioned to give iPhone users the better speeds that they will want from their iPhone 5.

It would seem natural, but there are a couple of specters hovering over this supposedly perfect marriage. One is the loyalty consideration, representing itself as the infamous two-year contract. Churn rates among customers of the major wireless carriers seems to be pretty low for the most part, but as the technology advances and certain carriers might be in position to provide better service sooner, that loyalty might be challenged. While AT&T Inc. (NYSE:T) seems to be the best partner for Apple Inc. (NASDAQ:AAPL) in terms of iPhone sales, what impact the LTE network will be in favor of Verizon Communications (NYSE:VZ) picking up iPhone customers will be interesting to note over the next three to six months, simply by looking at churn rates among AT&T and/or Sprint Nextel Corporation (NYSE:S) customers.

The other specter, though perhaps more unlikely, is the threat by Samsung Electronics Co. Ltd. to sue Apple Inc. (NASDAQ:AAPL) for infringing on its LTE patents – ones that Samsung claims Apple would have to infringe in order for its iPhone to work on an LTE network. If Samsung succeeds in invoking an import ban on the iPhone, Verizon Communications (NYSE:VZ) could lose that aspect of the market and may have to lean on Android devices with LTE capability by Google Inc. (NASDAQ:GOOG) – provided, of course, that Google and Apple don’t go to court, or that Samsung doesn’t turn its LTE patent attention to Android at the same time.

Verizon Communications (NYSE:VZ) and the iPhone may be a perfect marriage, which could help Verizon increase its lead over AT&T Inc. (NYSE:T) in the wireless network market. That could bode well for investors like hedge-fund manager Ray Dalio of Bridgewater Associates.

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