Verizon Communications (VZ) is set to attract customers with its upcoming smartphone–– Rhyme. This new HTC smartphone will be launched across Verizon’s network on September 29 and will be available at $199.
Rhyme is designed to cater to the trend-savvy youth who care more about the look of their smartphone than its technical features. Rhyme will come in three shades of purple, a 3.7-inch display, 5-megapixel camera and fast and easy downloading features. An luminescent purple cube that glows on an incoming calls or message is the phone’s main attraction. This cube can be either attached to the phone or clipped onto the user’s handbag. Further, the phone will comprise a port replicator for charging battery.
Given the growing demand for smartphones, Verizon expects its smartphone penetration to increase from 36% to more than 50% by the end of first quarter 2012.
Apart from the 3G smartphones, the company remains ahead of its peers like AT&T Inc. (T) and Sprint Nextel (S) in launching 4G enabled devices. Verizon launched nine 4G devices, three smartphones, two mobile hotspots, three laptop dongles and one tablet in the first half of the year. All these devices are doing well in the market. Further, Apple’s (AAPL) iPhone is also gaining popularity and is contributing to solid subscriber growth.We expect increased penetration of smartphone and other integrated devices to boost data revenue that will strengthen Verizon’s competitive position in the highly coveted smartphone market.
We currently maintain a long-term Neutral recommendation on Verizon supported by a Zacks #3 Rank (Hold).
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