Is the iPhone Holding Verizon Back?

From Verizon’s (NYSE:VZ) fourth-quarter earnings, it’s clear that the margins of the United States’ largest carrier are no longer increasing. Verizon and AT&T (NYSE:T) are not likely to lose their dominance in the wireless market any time soon, but both companies will face some downward pressure if they make an effort to keep Sprint (NYSE:S) from narrowing their lead, reported The Wall Street Journal on Monday.

For the three-month period ending in December, Verizon reported Tuesday that its wireless-service margin was smaller than in the year-ago quarter, citing high device subsidies, especially those coming from Apple’s (NASDAQ:AAPL) iPhone, as the reason for the drop. The New York-based company also posted a fourth-quarter loss of $4.22 billion, or $1.48 per share, as results were pushed down by costs from Superstorm Sandy-related damages and a change in the valuation of its pension liabilities.

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A record number of new wireless subscribers, 2.1 million, translated into a huge number of smartphone subsidies and caused the company to miss earnings estimates. Fourth-quarter earnings amounted to 45 cents per share, while analysts polled by Bloomberg had expected earnings of 50 cents per share…

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