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Starent Networks (STAR) – New Information

September 9, 2009

According to recent reports, there is the possibility that Apple (AAPL) may be considering offering Verizon (VZ) service for the iPhone. In addition, there is speculation that the coming announcement of the new tablet device will have Verizon capabilities as well as AT&T (T).

The point is being made that if this is true, Starent (STAR) will be in line to reap some nice benefits as Verizon will need to upgrade their network as discussed below.

(Added 50% to  TDIMG position today)

macbook_tablet1

From Forbes:

Starent Networks Corp. stands to gain if Apple Inc. picks up Verizon Wireless as a carrier for its popular iPhone or a new portable computer, a CL King analyst said Tuesday.

Verizon would need to add capacity on its network to accommodate the extra Web traffic that would come with Apple customers, CL King analyst Lawrence Harris said in a note.

That would likely mean buying equipment from Starent, a Tewksbury, Mass.-based company that makes technology for connecting cell phones to the Internet.

Along with the iPhone, Apple is rumored to be working on a small “tablet”-style computer, something like an oversized iPod.

Harris said a decision from Apple to add Verizon as a carrier for one or both “is becoming increasingly likely.” He said the move makes sense for Apple because it could head off a government investigation of the company’s exclusive deal with AT&T Inc. and boost iPhone sales.

Harris reiterated an “Accumulate” rating on Starent shares.

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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

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Written by Andrew Horowitz · Filed Under Long Ideas, Markets 

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