Verizon Wireless is expected to announce the availability of the iPhone tomorrow -- and that it will offer a subsidy to new customers that could add up to $3 billion to $5 billion. From Bloomberg: While the smartphone will help Verizon add more subscribers this year than rival AT&T Inc., currently the exclusive U.S. carrier for the iPhone, it will also crimp profits, said John Hodulik, an analyst at UBS AG. Hodulik said Verizon may sell 13 million of the devices with an estimated $400 subsidy this year, which would add up to a total of $5.2 billion.

"You basically write customers a $400 check," said New York-based Hodulik, who rates parent Verizon Communications Inc.'s shares "neutral" and doesn't own them. "We expect margins to be down pretty meaningfully in the first quarter and second quarter."