Dan Frommer, Business Insider
Jeffrey believes Verizon is going to owe Apple $23.5 billion this year as part of its agreement to carry the iPhone.
The problem, from Verizon's perspective, is that it's not going to sell enough iPhones to cover the $23.5 billion bill.
Jeffrey estimates Verizon sold 7.2 million units in the first half of the year, and will sell 10.8 million in the second half of the year.
That leaves 19 million units valued at ~$12 billion unaccounted for.
Verizon would therefore have to fork over $12 billion, even without revenue coming in from selling the iPhone.
Jeffrey isn't the only analyst reporting Verizon may owe Apple billions. Craig Moffett, of Moffett Research, says essentially the same thing.
Jeffrey says that Apple is going to be left in an interesting position.
Either Apple can force Verizon to buy 19 million iPhones it can't sell, or it can find wiggle room to let Verizon off the hook.
If it forces Verizon to buy the phones, then it's stuffing the channel, forcing Verizon to take on a year's worth of phones that will be old before they can be sold. Plus, Apple and Verizon are negotiating their next deal. Verizon will have leverage in those negotiations.
If Apple lets Verizon off the hook, then what about its other carrier partners?
What if Sprint, which is believed to have a similar deal, can't sell enough iPhones to meet its commitments? Can it get out of its contract?
The implications of what's happening between Apple and Verizon are far-reaching for the iPhone business model.
Apple's business model for the iPhone was built on big commitments from carriers, says Jeffrey. Apple's iPhone business growth has slowed considerably in the last few years. This could leave other carriers with shortfalls on their commitments, which means Apple is going to have to deal with this situation over and over again.
It seems like a big problem for Apple.
But, the company's stock isn't getting crushed on this news. So, either, it's not really a big deal, or investors are totally missing something big, or, this was already "priced" into the stock, as they say. (The fact that the iPhone is slowing isn't exactly new news.)
Update: As a commenter notes below, there is something weird about these numbers. It suggests a very agressive sales goal from Verizon to hit the numbers outlined in these filings. It's entirely possible Jeffrey is misreading things.