Stop me if you have heard this one before: Apple Inc. is set to break free of its AT&T Mobility bonds and begin offering the iPhone through Verizon Wireless.
Sounds familiar? Sure it does as varying forms of that prediction have been bouncing around the industry since the first wireless licenses were granted back in the 1980s, or so it seems.
The latest “push” for this came from a Bloomberg News report late yesterday citing those elusive “two people familiar with the plans” (as opposed to those “not familiar” with the situation). The report – based on the knowledge of two people so you know it has to be legit … this time – said Verizon Wireless will begin selling a version of the iPhone beginning “next year.” The move will end the domestic exclusivity deal Apple has had with AT&T Mobility since the first iPhone launched in 2007.
No one from any of the companies mentioned would comment on the story, which is not surprising, though analysts were all in a lather over the news predicting Apple could sell more than 10 million additional devices per year with the arrangement through Verizon Wireless.
This iPhone/Verizon Wireless love affair has been stoked by considerable news attention to network troubles encountered by customers on AT&T Mobility’s network following the launch of the iPhone. The “issues” ramped up with the launch of the iPhone 3G in 2008 that seemed to show AT&T Mobility’s 3G network lacked both the depth and reach needed to support millions of now data-crazed consumers, a fact the carrier has reluctantly began to acknowledge with claims that it was spending untold billions bolstering its 3G network.
Of course AT&T Mobility’s network struggles have only served to further feed Verizon Wireless’ ongoing claims of network superiority and thus the public’s increased clamoring for an iPhone that would work on the carrier’s network. Of course, before the launch of the iPhone, AT&T Mobility was also thought to have a robust network and looked at how well that turned out.
While AT&T Mobility has had exclusive rights to the iPhone, Verizon Wireless in the meantime has been pushing its relationship with Google Inc. around the Android operating system. The relationship has been for the most part successful for both as Verizon Wireless now offers a number of high-end Android-powered devices that have sold well thanks to strong marketing efforts.
But, the carrier’s management has also made it known that it would of course be interested in a partnership with Apple at some point having reportedly lost the initial offer to carry the device due to Apple’s desire for control over the arrangement.
As has been stated several times, Apple’s deal with AT&T Mobility seemed to make the most sense for the device maker as the carrier’s GSM/UMTS-based network would allow a single device to be made that could then be sold in most countries around the world, a move that Apple has since profited handsomely from. A CDMA-based device for Verizon Wireless would have required Apple to make at least two separate models for international sale or at least required the company to pack a pair of radios into an already densely-packed device.
Apple has also been able to tout a number of features on the iPhone, including the ability to talk and access data services at the same time thanks to an ability of the UMTS-based 3G network that is currently not available from CDMA.
As for the latest rumor, the timing of a launch “next year” could line up with Verizon Wireless’ plans to begin rolling out LTE markets later this year and have a large portion of its network covered by the next-generation technology by the end of 2011 on its way to total network coverage by the end of 2013. Apple also has a history of announcing new devices well in advance of their actual launch date, which could give it time to announce a Verizon Wireless/LTE device in early 2011 with plans to bring the device to market by the end of next year. However, the timing would still require Apple to include a CDMA radio in the device to provide customers with nationwide coverage, a move that could increase the cost of the device, though that could be made up by the expected increased sales volume.
An LTE device would also play well overseas as a number of international carriers are moving towards the LTE standard for their next generation networks, which would allow Apple to diffuse the cost over multiple operators. AT&T Mobility is also working on an LTE deployment, though it’s expected to trail that of Verizon Wireless by a few years.
Of course as has been shown innumerable times since the iPhone was launched, this latest round of rumors could be just that.
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