Could the company’s silence about its capital allocation plan be an indicator of bad earnings news in the pipeline? Is Apple planning to use news of a dividend increase as a poultice for a share price bruised by some disappointing financials?

That’s a theory that has been growing legs in recent weeks. If Apple were to report March results below its guidance on April 23, bundling those numbers with an increase to its shareholder dividend could take some of the sting out of them.

“The lack of announcement [has] increased speculation that the company is planning to package the good news of a new capital plan with the bad news of the quarter or even worse … fears of a pre-announcement,” BTIG analyst Walter Piecyk explains. “Even the contemplation that the management team would stoop to packaging good news with weak results should be disappointing enough to investors that have considered this company as ‘different’ and above the cosmetic games played by far too many management teams.”

Certainly a plausible theory. And it may well be that we see it play out on the 23rd.

Or not. Apple recently changed the way it provides earnings forecasts, moving from a conservative point estimate of results that it had reasonable confidence in achieving to a range of guidance that it feels it’s likely to achieve. And that’s the big wild card in the company’s next earnings report. If that shift in guidance succeeded in lowering analysts’ expectations to a more reasonable level for the March quarter, it’s entirely possible that Apple will meet them — assuming that it meets its own forecast. Note that Apple’s guidance for the quarter it will soon report was for $41 billion to $43 billion, and there are a few analysts calling for it come in below that.

So, if Apple reports in that range — or surpasses it — it’s good news.

And if it announces a dividend at the same time? Well, that’s very good news, indeed. It’s just the sort of propellant Apple’s share price needs right about now. And something very different from the “cosmetic game” some folks fear the company will play.

Apple’s shares rose nearly 2 percent in early trading Monday following reports that the cash-rich company could boost its dividend by more than 50 percent. Earlier in the day, Bloomberg published a six-analyst survey, the consensus of which was that Apple’s quarterly dividend will rise 56 percent to $4.14 a share. That’s an annual payout of $15.7 billion.

Big bucks, indeed — the largest dividend yield ever, I think. But for a company like Apple, that’s sitting on $137 billion in cash and investments, it’s a realistic prediction. Apple has been under pressure to return some of that money to its shareholders, with some particularly vocal investors criticizing it for the “Depression-era mentality” with which it manages its cash hoard.

That doesn’t mean Apple will do anything with its quarterly dividend tomorrow, though it’s clearly in its best interests to do something to appease shareholders. If it doesn’t announce some sort of plan for its cash soon, there could be ugly repercussions.

“If an announcement does not occur [soon], investors will not only be disappointed in the lack of dividends but start to question whether the management team has the strength to make the smart/obvious moves into lower priced phones or new recurring revenue opportunities like payments and local commerce,” BTIG analyst Walter Piecyk explained. “Is that unfair? Sure. But after several missed quarters, investors patience has shortened with the absence of movement. The dividend decision is becoming an unfair and not entirely relevant proxy on whether the management can act.”

That’s the argument put forth by BTIG analyst Walter Piecyk, who says that Apple will debut a low-cost iPhone before the year is over, because it would be stupid not to. Piecyk, like many who follow Apple, sees massive untapped demand for a lower-end version of the company’s flagship smartphone. According to his back-of-the-napkin math, Apple could sell about 36.5 million such iPhones in fiscal 2014. And that could add $11 billion in revenue for the period, even after accounting for some cannibalization of the higher-priced models.

“We believe a product that addresses the more than 70 percent of global wireless subscribers that are unsubsidized pre-paid is necessary in order for Apple to grow its EPS next year,” Piecyk writes. “This is not rocket science and our belief is based on basic logic, not questionable ‘channel checks’ or trips to Asia.”

And that’s perhaps the best argument yet for the low-end iPhone. Why build it? Because at this point it’s stupid not to. The emerging market opportunity in China, India and elsewhere is simply too great. And while peddling legacy iPhones to price-sensitive customers has allowed Apple to tap into this market, it would likely be a lot more successful with a device designed specifically for it. What’s more appealing, paying bargain-basement prices for a two-year old iPhone? Or purchasing an inexpensive version of the latest model? Think of the low-end iPhone like the iPad mini, and the logic of that argument becomes quite clear. The iPad mini has become very popular, very quickly.

Sure, a low-end iPhone might reduce Apple’s profit margins, which it has been loath to sacrifice. It might complicate manufacturing processes as well, as some at the company have worried. But there’s little question that it would spike sales in emerging markets. Note that the iPhone has grown considerably faster in the U.S. than Android, and one reason for this is that the U.S. is one of the few large markets where Apple offers legacy iPhones as a low-end, free-with-contract offering. In other words, given the choice of a free-with-contract iPhone and a free-with-contract Android device, a lot of consumers in the U.S. are opting for the iPhone. As Asymco’s Horace Dediu writes, “One wonders what would happen if such price parity were present globally.”

Great question.

Some will argue that it’s not in Apple’s ethos to build a “cheap” product. That’s certainly true. So expect the low end iPhone to be a device worthy of that ethos, not something that undermines it. Again, think about what the company did with the iPad mini. As CEO Tim Cook said earlier this year, “Our north star is great products. … The only thing we’ll never do is make a crappy product. That’s our religion: We must do something great.”

“Sales of Apple devices were pretty good in the fourth quarter, actually. … We are not concerned about … meeting the Apple commitment. We think that’s going to be fine.”

– Leap Wireless COO Jerry Elliott, last week

If Leap Wireless COO Jerry Elliott isn’t concerned that the company will meet its first-year iPhone commitment to Apple, perhaps he ought to be.

In a filing this week with the U.S. Securities and Exchange Commission spotted by BTIG analyst Walter Piecyk, Leap said it expects to sell significantly fewer iPhones than the number it’s obligated to move over the first year of its agreement with Apple. “At our current purchase rate, we project that we will purchase approximately one-half of our first-year minimum purchase commitment through June 2013,” the company said.

Leap began offering the iPhone through its Cricket Wireless subsidiary last June, so this is a troubling disclosure, to say the least. If sales volumes are half of what was expected in the first year of the deal, what will they be in the second or third, which each include moderate increases? Leap says they’ll be just fine. The company is ramping up advertising and pursuing a number of other device-leasing and financing programs that it hopes will expand sales volume.

But if that doesn’t do the trick, Leap may find itself in a tough spot, as it bleakly explains in its 10-K:

If Apple were to require us to meet the annual minimum commitment in each of the three years of the contract term, we estimate that we would be required to purchase approximately $100 million of additional iPhones in mid-2013 above our current purchase rate, approximately $150 million of additional iPhones in mid-2014 above our current purchase rate and approximately $200 million of additional iPhones in mid-2015 above our current purchase rate.

That’s a lot of iPhone inventory for a carrier that’s clearly having challenges selling the device. And if Leap can’t move it all, and Apple declines to revise or extend the company’s purchase commitment, there could be serious financial repercussions. Said Leap, “If we were unable to sell such additional devices at the rates and prices we project, such differences could have a material adverse impact on our business, results of operations and financial condition.”

For Leap’s sake, let’s hope those iPhone leasing and financing programs prove as effective as it claims.

Analyst estimates for Apple’s fiscal first-quarter earnings run the gamut from a low of $11.53 a share to a high of $15.50 a share. Sure, consensus is $13.47 per share, but the variance between low and high estimates is vast. Depending on whom you ask, Apple is either going to blow the quarter out, or flat-out blow it. It might post a 12 percent year-over-year increase in earnings. Or it might post a 14 percent decline. Consensus calls for a 3 percent decline, but that’s just an average of what is obviously some pretty broadly distributed guesswork. Further complicating matters: In the year-ago quarter, there were 14 weeks; this time, there were 13.

So Apple’s earnings report today is likely its most pivotal in years. Certainly, it’s among the most highly anticipated.

If Apple does post a decline in profit, it will be the first such drop in a decade. And that could exacerbate fears that the pace of Apple’s growth is slowing, and that waning demand for the iPhone and iPad really is the reason the company has reportedly been curtailing purchases of some components. Apple’s shares have dropped almost 30 percent on such unease since hitting a closing high of $702.10 in September.

If Apple doesn’t post that expected decline in profit, those fears won’t simply evaporate. Concerns that the high-end smartphone market that the company has dominated is nearing maturation, and that new products like the iPad mini are eating into Apple’s historically high profit margins will persist. But the immediate concerns that have been weighing on its shares will likely ease a bit.

When it last reported earnings, Apple said that, for its first quarter, which ended in December, it expected to report $52 billion in revenue and earnings of $11.75 a share. It’s a safe bet that the company will beat its own guidance. But that’s not going to be enough for the Street. It never is. For Apple to restore investor confidence, at least in the near term, it has got to substantially beat Wall Street’s expectations. That means coming in well above the $13.45 per share consensus.

“Investors are worried about iPhone demand, iPad mix, Mac sales and most importantly margins,” BTIG analyst Walter Piecyk told AllThingsD. “What we need now is an old-school Apple beat on top line, and margins that will make people forget about the March quarter and the rest of 2013 — at least for a few days.”

Apple reports results this afternoon after market close.

Also: Sales guesses!

So, how many iPad minis will Apple move this weekend? Piper Jaffray’s Gene Munster, perhaps the most widely quoted Apple analyst and a longtime Apple bull, predicts up to 1.5 million units.

But if Apple hits Munster’s number, that won’t be nearly enough to please BTIG Research’s Walter Piecyk. He wants to see Tim Cook sell three million minis, because that’s how many iPad 3′s (“New iPads,” in Apple’s parlance) Apple sold during its March debut weekend.

His logic: “We believe 3 million units is an appropriate bogey given that the Mini is being launched in nearly 3x the number of markets than the iPad 3, is at a much lower price point and sold out of pre-ordered product deliverable this weekend.”

If Apple follows form, we’ll get some sort of number in the next few days, likely Monday. Then again, Tim Cook has been deviating from past practices a bit.

*As Nicholas Carlson points out, waiting in line to buy a tech gadget seems awfully weird in the New York area right now.

Earlier this year, Sprint was poised to acquire MetroPCS, but the company’s board of directors balked at the deal at the last minute. Though fully negotiated, the board opted to walk away, rather than sign. So Sprint forfeited its chance to claim MetroPCS’s spectrum and 9.3 million customers.

Why? That’s not entirely clear. Sprint’s stock was off, and had been for years. There may have been concerns about execution and, more broadly, the company’s overall strategy. Regardless of the reason, the end result was the same: Sprint lost out on a compelling opportunity. Had it snapped up MetroPCS, not only would it have gained that spectrum and the millions of customers I mentioned earlier, it would have significantly raised its profile in the wireless sector. Remember, MetroPCS customers were already roaming onto Sprint’s network, because it, too, uses the CDMA standard. Integration would have been relatively easy. Presumably, that’s why Sprint spent months negotiating to acquire MetroPCS.

So, now that MetroPCS is off the table, what’s Sprint’s next move? There are two potential tacks here. The first, as Forrester analyst Charles Golvin explains it, is simply to stay its current course.

“Sprint needs to stick to its knitting: Get Network Vision finished, put the iDEN network to bed, maintain the aggressive pace of their LTE buildout, ride herd on Clearwire’s TD-LTE deployment, and maintain the marketing focus on its differentiated unlimited offer,” Golvin told AllThingsD. “If they succeed in those efforts, they’ll maintain their significant lead on T-Mobile/MetroPCS — or whatever the new company will be called.”

Golvin’s overarching point: Sprint should focus on Verizon and AT&T as its competition, not T-Mobile.

But there’s one other potential move here: Take a run at T-Mobile and acquire it before it’s too late. And that’s what BTIG Research analyst Walter Piecyk is looking for. “At this point, it might make more sense for Sprint to consider purchasing T-Mobile USA,” Piecyk theorizes. “A T-Mobile deal would give the company much more scale and would materially increase the scarcity value of Sprint to Charlie Ergen’s Dish, which is looking for a wireless partner.”

An interesting theory. Clearly, Sprint would do well to stick to its knitting, as Golvin suggests. But in order to more aggressively compete with AT&T and Verizon, it might want to bulk up by taking out T-Mobile, as well.

Some argue that it is. BTIG Research analyst Walter Piecyk recently cut his rating on Apple, theorizing that U.S. carriers will soon rein in their iPhone subsidies in an effort to boost their own margins. And were that to happen, a significant contraction in iPhone sales would likely follow.

Question is: Will it happen? According to a new analysis from CLSA, the answer is probably no — at least not for the next 18 to 24 months.

Which is great news for Apple. CLSA figures iPhone subsidies accounted for $19 billion of Apple’s fiscal 2011 revenue. And about 46 percent of that came from North America. So if AT&T, Verizon and Sprint were to push to lower the subsidies they pay to sell the iPhone, Apple could take a revenue hit. Indeed, some observers have estimated that a $100 drop in the iPhone subsidy would trim $7.50 from Apple’s earnings-per-share for fiscal 2013.

But that’s an unlikely scenario.

Why? Because, CLSA argues, the structure of Apple’s carrier agreements will prevent it from occurring.

“We believe these are multiyear agreements which tend to stipulate subsidy policies up front,” CLSA analyst Avi Silver explains. “For the major carriers, we believe these agreements have most favored nation clauses so any offering from Apple to one carrier would have to be offered to the other. During the length of these multiyear agreements, we believe U.S. carriers would need permission from Apple to alter subsidy levels.”

And if that’s the case, they’re obviously going to have a difficult time getting it. More to the point, that hypothetical most-favored-nation clause — if it exists — is going to make it tough to trim iPhone subsidies for a while.

Says Silver, “For AT&T, we do not know when its multiyear agreement expires but Verizon and Sprint are likely locked in for some time. As a result, we think that an outright reduction in subsidies is an unlikely scenario in the U.S. market.”

Apple reports earnings after market close today.

A shocker of a call, coming as it does when Apple shares are so ascendant that some analysts have slapped a staggering $1,001 price target on them. But Piecyk has his reasons, and they’re worth considering, even as AAPL shrugs them off in midday trading. Top among them: He believes Apple’s carrier partners are tired of offering such high subsidies on the iPhone, which eat into their own margins while delivering huge ones to Apple. And soon they’re going to begin reining them in.

“Subsidies by post-paid wireless operators have fueled the growth of Apple’s $600 iPhone since its inception,” says Piecyk. “Wireless operators have been happy to subsidize smartphones to new and existing customers in order to provide a lift to the average monthly bill (ARPU) of their customer base, a metric which had been falling for the past three decades.”

But now that the pace of the smartphone upgrade cycle has quickened, subsidizing iPhone upgrades only one year into a two-year contract is becoming a costly proposition. Case in point: AT&T’s wireless margins, which used to be more than 44 percent, are these days hovering around 30 percent (see slide at right). So, to raise margin levels back to where they once were, AT&T is implementing stricter upgrade policies.

“We expect post-paid wireless operators to remain firm in their plan to stunt the pace of phone upgrades in 2012 and we expect to see some initial evidence of their success in the current quarter,” Piecyk said.

And that could cause a significant contraction in iPhone sales; more so, if other carriers follow AT&T’s lead, as Piecyk believes they might.

How significant?

Says Piecyk, “We expect Apple’s iPhone sales to drop to 27.5 million units in Fiscal Q3, resulting in a revenue estimate that is $1 billion below consensus.”

Which would obviously make for a hell of a surprise.

So what do we think of Piecyk’s rationale? Does it hold water?

On Wednesday, Verizon CFO Fran Shammo said Verizon Wireless sold 4.2 million iPhones in the fourth quarter — more than double the number it sold in the third quarter. And today, analysts are taking that to mean Apple probably sold quite a few more iPhones than they were expecting it to.

Back in December, for example, BTIG’s Walter Piecyk (registration required for link) predicted Apple would sell 30 million iPhones in the December quarter. Now he figures it will sell a record 35 million, thanks to the particularly strong demand in the U.S., showcased by the Verizon number Shammo disclosed yesterday. His rationale: If Verizon’s iPhone sales are that high, then so are AT&T’s and Sprint’s, as well.

“Yesterday, Verizon disclosed it had sold 4.2 million iPhones which is above our estimate of 3.75 million and in early December AT&T referenced strong iPhone sales at the UBS conference which we now estimate translates to sales of 7.0 million iPhones, which was above our estimate of 5.25 million,” Piecyk explains. “We are also raising our estimate for Sprint to over 2.0 million from our prior estimate of 1.75 million. This adds up to more than 13 million iPhones sold in the United States in calendar Q4 2011, up from our August estimate of 10 million.”

That’s a big number, one that means the U.S. will represent almost 40 percent of iPhone sales in the quarter, a big spike over the quarter prior, when the U.S. represented about 26 percent of iPhone sales.

And if it’s in the right ballpark, Piecyk says it means Apple could be on track to sell 125 million iPhones in calendar 2012 — 17 percent more than his earlier prediction of 107 million.

In the first group is Ticonderoga’s Brian White, who expects Apple to sell 29.9 million iPhones in the December quarter, a quarter-over-quarter increase of 84 percent. With him, BTIG Research’s Walter Piecyk, who says AT&T’s good news suggests Apple will sell 30 million iPhones in the quarter, just as he predicted in August.

In the second group: Stern Agee’s Shaw Wu and UBS’s Maynard Um. Wu raised his forecast for iPhone sales this quarter to 28 million, up from 26 million. Um went him two million better, raising his estimate to 30 million from 28 million, though he concedes even that might end up being a little light, thanks to high demand in the Asia Pacific region.

“We believe that there is a general strength across the board for iPhone demand,” Um said in a note to clients. “We continue to believe that our estimates are conservative as [they] are still below where expected build plans are.”

In other words, Apple will likely blow out iPhone sales for the quarter, just as CEO Tim Cook said it would during the company’s last earnings call.

Said Cook, “We’re very confident that we will set an all-time record in the December quarter for iPhone sales. We — in our wildest dreams, we couldn’t have gotten off to a start as great as we have on the 4S.”

Supply chain sources tell Taiwanese trade mag DigiTimes that Foxconn Electronics is pumping out 150,000 next-generation iPhones per day, with a goal of shipping up to six million in September alone. With volume like that, fourth-quarter iPhone shipments could rise as high as 22 million.

Which is just about the number some analysts expect Apple to sell during the period. BTIG analyst Walter Piecyk, for example, predicts Apple will sell 21.5 million iPhones in Q4, though he argues it could sell far more than that if the company adds Sprint as a third carrier in the United States, and the debut of a brand-new iPhone at Verizon causes a big spike in sales.

“Since the iPhone 4 has been launched we estimate that AT&T and Verizon have represented 30 percent of Apple’s unit volume,” Piecyk says. “If the U.S. continues to represent 30 percent of Apple’s iPhone sales, it would imply a global iPhone demand for as many as 30 million iPhones in calendar Q4.”

Question is, can Apple deliver that many phones?

How far?

BTIG analyst Walter Piecyk, whose official estimate calls for Apple to sell 21.5 million in the fourth quarter of this year, argues it could end up selling 30 million (registration required) — 10 million of them in the U.S. alone.

“Since the iPhone 4 has been launched we estimate that AT&T and Verizon have represented 30 percent of Apple’s unit volume,” Piecyk wrote in a note to clients Wednesday. “If the US continues to represent 30 percent of Apple’s iPhone sales, it would imply a global iPhone demand for as many as 30 million iPhones in calendar Q4, which would generate as much as $5.3 billion and $1.19 of revenue and EPS upside to our estimates in that quarter. Sounds great but can Apple deliver that many phones?”

Piecyk concedes that 30 million may be a tough target to reach, but he doesn’t view it as impossible. Apple would have to do a few things to manage it, though, like adding Sprint as a third carrier partner in the states and continuing to sell a $49 legacy iPhone targeted at the market’s lower end.

“We estimate that when AT&T started selling the iPhone 4, it had over 16.5 million iPhone subscribers,” Piecyk explains. “This year we expect AT&T to enter the calendar fourth quarter with an installed iPhone subscriber base of 23.0 million, which provides much larger upgrade potential.” Given that, he believes it’s possible for the carrier to sell 5 million iPhones. Meanwhile, pent up demand for a brand new iPhone at Verizon could allow Big Red to sell another 4 million. So that’s 9 million right there. If Apple signs up Sprint as a third U.S. carrier, Piecyk figures it will sell another 1.5 million iPhones.

Grand total:10.5 million iPhones sold in the States. If Apple hits that number, and U.S. sales continue to be about 30 percent of global sales, then the fourth quarter is going to be a monster for the iPhone.

“[The] iPad consistently produced lower download speeds than Windows based laptops,” Piecyk wrote today. “This appears to be an issue with the iPad and hot spots and not Wi-Fi in general since our iPad speeds on our home Wi-Fi were equivalent to other devices. When we tested the iPad on our FiOS powered Wi-Fi connection, we received the full 25 Mbps of available download speed on every test.” (Click image below to enlarge.)

Odd, particularly since iSpot was specifically engineered to work with Apple devices.

“There appears to be something going on in how Apple’s Wi-Fi implementation is working with wireless hotspots,” Piecyk concludes. “Once again, all we can refer to is a company’s relative expertise in RF engineering. Our home Wi-Fi router does not have to deal with incoming 4G signal or a need to preserve battery life like a hotspot does. We suspect we will be getting a lot of feedback on this topic in the coming weeks as we dive deeper into the issue.”

A safe bet. I’ve reached out to Apple and ClearWire both and will update here if I hear back.

Turns out, that’s not quite the case: Sprint’s claim was off by a factor of three. In its first day at market, the EVO sold as well as the the Instinct and Pre in their first three days combined, not three times as well.

“We originally reported that the total number of HTC EVO 4G devices sold on launch day was three times the number of Samsung Instinct and Palm Pre devices sold over their first three days on the market combined,” Sprint said in a corrected press release today. “We inadvertently erred in the comparison.”

A bit of an embarrassment for Sprint (S), which has been hyping the EVO and its presales for some time now. That said, the device is selling quite well. In fact, it has reportedly sold out at a number of outlets and is in short supply at others.

Not that that’s good news, as BTIG analyst Walter Piecyk notes. “It should be disappointing to investors that the company was not prepared to sell more phones given the demand,” he wrote in a note to clients today.

“While sales of the HTC EVO were much stronger than the Palm Pre last year,” Piecyk added, “Sprint had been assuring investors that they would be well-stocked with inventory and that the component shortages that Verizon had experienced with the HTC Incredible would not impact their launch of the EVO. We understand the value in just-in-time inventory, but would it have hurt to have an extra 100,000 phones ready even if it meant carrying some inventory through the end of the quarter?”

Given Sprint’s revelation, Piecyk now believes Sprint sold about 150,000 EVOs during its first weekend at market, down significantly from his earlier forecast of 250,000 to 300,000.

This morning, the retailer cut the price of iPhone 3GS devices with 16 gigabytes of memory from $197 to $97 with a two-year service contract. Wal-Mart claims the reduction is simply part of its “ongoing aggressive savings announcements.” But coming as it does amid speculation about the launch of a new iPhone (and rumors of the discontinuation of the 8GB iPhone 3G), it is being interpreted as a move to clear out inventory before that device arrives at market.

Meanwhile, Apple (AAPL) and AT&T (T) continue to sell the 16GB iPhone 3GS at its original price, though I can’t imagine that this will continue much longer. When Apple introduced the iPhone 3GS in June 2009, AT&T slashed the price of the entry-level 8GB iPhone 3G to $99.

The company is expected to do the same thing this year with the low-end 3GS. And, as it did last year, that price cut will likely spur adoption of the device among the lower tiers of AT&T’s customer base. As BTIG Research analyst Walter Piecyk observed in a note to clients this morning:

We estimate that last years price cut of the iPhone 3G to $99 stimulated more than 3 million phone sales to existing AT&T customers that helped the company further penetrate the family plan with higher ARPU, lower churn customers. We believe the impact could be even larger this year for AT&T given its the broad market acceptance of the iPhone, the halo impact of the iPad and the installed base of iPhones that will need to be upgraded to a 3GS phone in order to benefit from Apple’s latest upgrade to its iPhone OS 4.0.

Piecyk’s advice went unheeded–until recently. Now with Palm’s fate settled after its acquisition by Hewlett-Packard (HPQ) last week, the handset maker’s smartphones have become bargain-bin fare.

Last week also saw Sprint giving away the diminutive Pixi free to anyone willing to sign a two-year contract. This week, Verizon (VZ) is following suit with steep discounts of its own. The carrier has begun offering the Pre Plus and the Pixi Plus for just $29 with a new two-year contract. That’s $120 less and $60 less than the prices at which the devices debuted in January.

It’s also $28.99 more than Amazon’s price.

That’s right, the next-generation versions of the phone former Palm CEO Ed Colligan once described as a “significantly better product” deserving of a higher price than Apple’s (AAPL) iPhone is selling for a penny at Amazon (AMZN). Which is a great deal, particularly since both devices are being offered with free 3G Mobile Hotspot service. Sadly, the offer comes a bit too late to make much of a difference for Palm.

PREVIOUSLY:

• Palm Wouldn’t Have Lasted the Year
• HP “Doubling Down” on Palm’s webOS
• Who Will Buy Palm? If Not HTC, How About HP?
• Palm CEO: Can’t Read My, Can’t Read My Poker Face…

Verizon (VZ) dropped its nationwide unlimited voice plan to $69.99 a month from $99 and began offering a nationwide unlimited voice and text plan for $89.99.

But if you’d like a data plan to go along with them, you’ll be looking at additional fees–$9.99 for a 25-megabyte package and $29.99 for an “unlimited” one. The $19.99 data package option for 3G multimedia phones has been discontinued.

So what Verizon has really done here is cut the price of voice and raise, substantially, the price of data, as Pali Research analyst Walter Piecyk pointed out in a research note to clients this morning.

“This is 30 percent cut to voice and a 50% increase to data which effectively results in about an 8-10% effective cut to the more popular high-end rate plans,” the analyst explained.

“The rate moves appear to be trying to increase the perceived relative value of data,” Piecyk added. “There is in effect a price increase for data to $30 from $20, a level that most carriers have charged. Increasing prices is not a logical way to drive adoption but Verizon mitigates that increase with steep cuts in voice and appears to be using its industry leading position to move the perception on the value of data.”

One last point worth making here: Verizon’s new plans are more expensive than those offered by Sprint Nextel (S) and T-Mobile, but cheaper than AT&T’s–at the moment, anyway. The last time Verizon lowered its plan prices, AT&T (T) followed suit within a matter of hours.

The plans go into effect Monday, Jan. 18.

Below, some comparative tables on Verizon’s new pricing plans, courtesy of Pali (click to enlarge), and the official announcement:

VERIZON WIRELESS OFFERS SIMPLE, AFFORDABLE CONVENIENCE WITH NEW UNLIMITED VOICE PLANS
New Nationwide Plan Options Include Unlimited Talk and Text to Pair with Robust Data Plans on the Latest 3G Phones

BASKING RIDGE, N.J. – New monthly service plans from Verizon Wireless make connecting to the nation’s most reliable wireless network easier than ever. Beginning Jan. 18, customers may sign up for a new Nationwide Unlimited Talk plan that allows customers to call anyone in the United States for $69.99 monthly access or a Nationwide Unlimited Talk & Text plan to call and send text, picture and video messages to anyone in the country for $89.99 monthly access.

Nationwide Family SharePlans® will also have new unlimited options. Nationwide Unlimited Talk Family SharePlans will be $119.99 monthly access while the Nationwide Unlimited Talk & Text Family SharePlans will be $149.99 monthly access. All Family SharePlan pricing includes the first two lines of service. Standard text message rates will apply for customers on the Nationwide Unlimited Talk plans who do not sign up for a text messaging bundle.

Data Packages

The company also announced the expansion of the 25 megabyte for $9.99 per month data package requirement to include all Verizon Wireless 3G Multimedia phones, which gives customers quick access to Mobile E-mail, games and the Internet. The data package requirement was introduced last year with the LG enV® TOUCH and the Samsung Rogue™. Today’s announcement expands that list to include new activations of the LG Chocolate Touch™, LG enV®3, LG VX8360, Motorola Entice™ W766, Nokia 7705 Twist™ and Samsung Alias™ 2. The company expects to introduce a host of 3G Multimedia phones in 2010. The $19.99 data package option for 3G Multimedia phones has been discontinued.

Customers using Simple Feature phones (Mobile Web-enabled) will continue to pay $1.99 per megabyte or choose either the $9.99 or $29.99 data packages. The consumer data package for 3G Smartphones such as BlackBerry®, Windows Mobile® or Android devices will remain at $29.99 per month.

Prepaid Plans

Verizon Wireless will also offer customers new prepaid plans beginning Jan. 18. For those who prefer pay-as-you-go options, but want a no-holds approach to calling and texting, new Monthly Unlimited Prepaid plans will give customers the same great calling options as monthly contract subscribers for just $5 more per month. Prepaid Monthly Unlimited Talk is now available for $74.99 per month while contract subscribers pay $69.99 for the same unlimited calling option. Prepaid Monthly Unlimited Talk & Text will be available for $94.99 per month. The 450- and 900-minute Monthly Prepaid plans will also be available for $5 more per month than comparable postpaid plans.

Existing Customers

Today’s announcement will not have an impact on existing customer contracts, although customers may choose to move to any of the new plans. The company allows customers to change their service plans at any time without penalty or contract extension. To move to the newly announced plans, customers may go online to their My Verizon accounts at www.verizonwireless.com or contact Customer Service at 1-800-922-0204.

In a note to investors this morning, Pali analyst Walter Piecyk says he’s not buying predictions about Sprint (S) returning to growth in 2010. Sure, the company is improving post-paid subscriber losses, says Piecyk, but not as quickly as it needs to. And its prepaid business, which already faces a fair bit of competition, will be confronted with even more competition next year.

“Over the past six months our concerns have been rising over the slow pace of change at Sprint and what we view as lost opportunities for growth, but we maintained our Buy rating due to the low valuation on the stock and the depressed expectations of investors,” Piecyk writes.

“Those concerns increased in recent months as the pre-paid business, which Sprint has been accessing for growth, became more competitive and Verizon began executing on a more open device strategy,” the analyst adds. “In the past few weeks, investors have become more optimistic about positive post-paid signs early in Q4 and Sprint’s prospects of even stronger pre-paid results in 2010, in the face of increasing competition.”

In contrast, Piecyk notes that “We are less confident about those trends and as we model out a more competitive market in 2010 for all our companies it becomes evident to us that Sprint will be challenged to stabilize EBITDA. Faced with negative catalysts in the months ahead and the challenge of appropriately valuing a company whose EBITDA is in perpetual decline, we believe now is the right time to downgrade the stock to Neutral.”

Wall Street, then, isn’t underestimating Sprint’s prospects for 2010. It’s overestimating them–or at least it certainly was yesterday.

“For 2010, we expect post-paid losses to be pared by 35% to 2.3 million subs lost compared to our prior estimate of less than 2 million subs lost in that year,” Piecyk concludes. “While pre-paid net adds might offset the losses or even top post-paid losses in Q4 we expect the total customer base to decline by 700,000 in 2010.”

To hear that AT&T (T) ranked dead last in customer satisfaction in high-profile markets like New York and San Francisco isn’t all that surprising. New Yorkers often carp about dropped AT&T calls, and complaints about lousy service in the Bay Area are legion.

But to find that the carrier placed last in 17 other cities as well suggests that AT&T’s shortcomings are more widespread than the carrier would have us believe and not simply the product of a high concentration of iPhones in the country’s larger cities.

As Pali analyst Walter Piecyk wrote in an investor note this morning, “We believe it has been an elitist investor view that only a few high profile AT&T markets are having problems on the theory that only ‘tech savvy’ residents of coastal cities would find enough use in the iPhone to impact the quality of AT&T’s network.”

It certainly would appear that way. With low marks for several key indicators of customer satisfaction–including service availability, circuit capacity, dropped-call frequency and voice service–across 73 percent of the markets Consumer Reports surveyed, it’s pretty clear that AT&T has become overextended by the popularity of the iPhone. Which is bad news for the carrier and, of course, for iPhone owners as well.

As Consumer reports notes, “Apple’s iPhones are the top smart phones in our Ratings–actually, among the best of all phones we tested, period–but their exclusive carrier, AT&T, was middling at best in satisfaction….If you’re readying to buy Apple’s phone, prepare for possible disappointment with its service and expect to love the phone anyway. Despite the network problems, a staggering 98 percent of iPhone users in our cell-phone-buying survey were satisfied enough to say they would definitely or probably buy the phone again. Only 79 percent of respondents who bought other cell phones said the same.”

Verizon (VZ), which has been mercilessly slamming AT&T’s service in a recent ad campaign, is going to have a field day with this. And somehow, I don’t think a hurriedly cobbled together Luke Wilson ad will undo the damage.

UPDATE: Reached for comment, AT&T had this to say about Consumer Reports’ findings, which, the company stressed, were based on anecdotal feedback from a self-selected group of subscribers: “We appreciate and value all customer feedback. We learn from it and it helps us serve our customers better. Without question the surest indication of customer satisfaction is churn, or turnover. For the last quarter, our postpaid churn was just 1.17 percent.”

Now, that figure includes sales made abroad, so we don’t yet know how many were sold by AT&T (T), but it’s clear that the number was substantial. In its third quarter last year, AT&T activated 2.4 million iPhones and 40 percent of those were for subscribers who switched from other carriers. So the fact that Apple (AAPL) sold as many iPhones as it did in the company’s most recent quarter, bodes well for the carrier.

As Craig Moffett over at Bernstein Research notes, “It is entirely conceivable that AT&T’s iPhone alone will account for more than 100 percent of the entire industry’s post-paid subscriber growth in the third quarter.”

But therein lies the rub. For while sales of Apple’s handset remain strong, the heavy subsidies it requires have pushed AT&T’s wireless margins down. And the heavy data traffic associated with the handset have led to widespread complaints about AT&T’s network, forcing infrastructure upgrades. Worse, AT&T’s dependence on iPhone exclusivity at a time when Apple is clearly transitioning away from such a model leaves it quite vulnerable.

“While the strong sales of the iPhone are positive for AT&T in the near term, they increase the company’s reliance on a product for which we do not believe it will be able to maintain exclusivity,” Pali Research analyst Walter Piecyk wrote in a note to clients Tuesday. “We believe more than one third of AT&T’s post paid customer base is tied to an iPhone user and that mix is likely to rise significantly over the next few quarters.”

But not this quarter. This quarter, AT&T is expected to add 1.5 million to 1.7 million net wireless customers, driven by demand for the iPhone 3GS, which was released early on in the quarter. And while another drop in wireline customers is likely to weigh on results, it will be tempered once again by the iPhone. AT&T is expected to earn 50 cents a share, compared to 55 cents in the year-earlier third quarter, according to analysts polled by Thomson Reuters, who see revenue falling to $30.9 billion from $31.3 billion.

Now, that figure includes sales made abroad, so we don’t yet know how many were sold by AT&T (T), but it’s clear that the number was substantial. In its third quarter last year, AT&T activated 2.4 million iPhones and 40 percent of those were for subscribers who switched from other carriers. So the fact that Apple (AAPL) sold as many iPhones as it did in the company’s most recent quarter, bodes well for the carrier.

As Craig Moffett over at Bernstein Research notes, “It is entirely conceivable that AT&T’s iPhone alone will account for more than 100 percent of the entire industry’s post-paid subscriber growth in the third quarter.”

But therein lies the rub. For while sales of Apple’s handset remain strong, the heavy subsidies it requires have pushed AT&T’s wireless margins down. And the heavy data traffic associated with the handset have led to widespread complaints about AT&T’s network, forcing infrastructure upgrades. Worse, AT&T’s dependence on iPhone exclusivity at a time when Apple is clearly transitioning away from such a model leaves it quite vulnerable.

“While the strong sales of the iPhone are positive for AT&T in the near term, they increase the company’s reliance on a product for which we do not believe it will be able to maintain exclusivity,” Pali Research analyst Walter Piecyk wrote in a note to clients Tuesday. “We believe more than one third of AT&T’s post paid customer base is tied to an iPhone user and that mix is likely to rise significantly over the next few quarters.”

But not this quarter. This quarter, AT&T is expected to add 1.5 million to 1.7 million net wireless customers, driven by demand for the iPhone 3GS, which was released early on in the quarter. And while another drop in wireline customers is likely to weigh on results, it will be tempered once again by the iPhone. AT&T is expected to earn 50 cents a share, compared to 55 cents in the year-earlier third quarter, according to analysts polled by Thomson Reuters, who see revenue falling to $30.9 billion from $31.3 billion.

Now, that’s still a trifling number when compared to the 50,000 or so available in Apple’s (AAPL) iTunes App Store, but it’s something, and it shows that Palm (PALM) is managing to convince iPhone-addled developers that writing WebOS applications will be lucrative business.

Among the latest and most promising of those new apps, DirecTV’s (DTV) NFL Sunday Ticket. Though the app–which allows users to watch NFL games on their cellphones–is available for the iPhone as well as for the Pre, it may offer a better experience on the latter, as Pali Research analyst Walter Piecyk notes in a research alert this morning.

“We will be interested to see how this application performs on Sprint’s (S) network compared to how it will perform on the iPhone on AT&T’s (T) network,” Piecyk writes. “Sprint is more likely to allow a less compressed stream and therefore higher quality video on its network as we have seen with Sprint’s implementation of YouTube, which is much higher quality than viewing YouTube clips on the iPhone over the AT&T network. When the iPhone is forced to WiFi, the quality of the YouTube clips improves to the level we experience on the Palm Pre but that kind of defeats the purpose of the mobile internet.”

An interesting point and an interesting potential selling point for Palm and Sprint–especially given the beating AT&T’s network has been taking in the media lately.

“Advertising for the product has increased with a more direct attack on the iPhone but that does not appear to have materially impacted sales from its prior sales levels,” Piecyk writes in a note to clients today. “The Pre continues to add applications that will increase the appeal of the phones like Spades and Bubbles, two game applications and total application downloads have now topped 3 million.

“However,” Piecyk adds, “with only 41 apps available we wonder how apps with limited appeal like Shabat Shalom, which allow users to check candle lighting times, are showing up before proven iPhone successes like a basic fart sound application or Facebook.”

Piecyk goes on to suggest that Sprint (S) needs to step up its efforts to market the Pre lest it fumble the best opportunity to come its way in a while.

“Overall the launch of the Pre has been a success for Sprint by increasing the profile of the company’s data network and its use as an effective retention tool. However, we expect Verizon to heavily market whatever WebOS phone they get their hands on. 

“This is a good operating system,” Piecyk notes, “and phone and the multi-tasking functionality is a clear differentiated advantage but competitive advantages in technology are fleeting and we cant imagine that Apple and others will not be able to replicate the multi-tasking functionality in short order. Between Verizon’s launch of a Palm product in 2010 and the inevitable end of the multi-tasking differentiation we believe Sprint is wasting a valuable opportunity to get the Pre in as many customers’ hands as possible this year.”

And just how should Sprint maximize that opportunity? Simple, says Piecyk: Slash the Pre’s price to $99, or even 99 cents.

“Advertising for the product has increased with a more direct attack on the iPhone but that does not appear to have materially impacted sales from its prior sales levels,” Piecyk writes in a note to clients today. “The Pre continues to add applications that will increase the appeal of the phones like Spades and Bubbles, two game applications and total application downloads have now topped 3 million.

“However,” Piecyk adds, “with only 41 apps available we wonder how apps with limited appeal like Shabat Shalom, which allow users to check candle lighting times, are showing up before proven iPhone successes like a basic fart sound application or Facebook.”

Piecyk goes on to suggest that Sprint (S) needs to step up its efforts to market the Pre lest it fumble the best opportunity to come its way in a while.

“Overall the launch of the Pre has been a success for Sprint by increasing the profile of the company’s data network and its use as an effective retention tool. However, we expect Verizon to heavily market whatever WebOS phone they get their hands on. 

“This is a good operating system,” Piecyk notes, “and phone and the multi-tasking functionality is a clear differentiated advantage but competitive advantages in technology are fleeting and we cant imagine that Apple and others will not be able to replicate the multi-tasking functionality in short order. Between Verizon’s launch of a Palm product in 2010 and the inevitable end of the multi-tasking differentiation we believe Sprint is wasting a valuable opportunity to get the Pre in as many customers’ hands as possible this year.”

And just how should Sprint maximize that opportunity? Simple, says Piecyk: Slash the Pre’s price to $99, or even 99 cents.