“If Apple added another carrier to the roster in the US, it would hurt their relationship with ATT. While it’s not likely that the two companies really love each other, the iPhone has become increasingly important to ATT, who will be incented to extend their exclusive with Apple as long as they can. That means more money in Apple’s pocket. It’s not likely that Verizon would be as generous,” GLG writes.
GLG writes, “It’s not likely that the iPhone will appear on the Verizon network in the next few years, if ever.”
Full article here.
Daniel Eran Dilger writes for RoughlyDrafted, “Two and a half years later, Apple’s standout success with its single US provider and its global strategy via one mobile technology makes any mention of jumping ship to Verizon a very poorly thought out fantasy. Fortunately for the iPhone, the strategy not only worked (Apple’s couple of percentage points of market share were recently estimated to be gobbling up 32% of the entire industry’s profits in the first half of 2009, and that was before the blockbuster iPhone 3GS launch) but also scorched the earth behind it, preventing anyone else from really being able to copy it.”
“Android is now trying to cover all the bases in the same old model of Windows Mobile, resulting in a fractured platform that consumers won’t even be able to readily identify. Palm is proving that carrier exclusivity alone isn’t a silver bullet,” Dilger writes. “And RIM’s Storm is proving that cloning the iPhone’s form factor doesn’t result in wild success when the majority of its user base really just wants a basic PDA/texting phone.”
“Meanwhile, Apple has outrun a series of Android attempts, sucked the wind from the Pre’s sails, and is catching up to America’s most popular smartphone from Canada while only using one provider to achieve those sales in the US,” Dilger writes. “It’s no surprise Verizon is interested in getting the iPhone, it’s just still a bit of a puzzle why pundits think this would do Apple any good.”
Full article here.
…It’s not likely that Verizon would be as generous,”
That statement tells me that this writer underestimates the power of Apple.
@TC1:
you are absolutely correct on that one.
The “Power of Apple” didn’t work with the first negotiations with Verizon.
Screw Verizon!
The “Power of Apple” didn’t work first time around with Verizon because Apple didn’t have (and wouldn’t show) anyone the iPhone.
However, Verizon is not desperate to get the iPhone. And Verizon has been much more controlling of its phones than other carriers. I think Verizon would be less likely to give Apple the subsidies and control apple wants simply due to Verizon’s own stubbornness.
Steve Jobs is also not very happy with Verizon, which makes Apple much less likely to want to add Verizon.
Now suppose Apple added Sprint? Apple could dictate the terms (Sprint needs the boost), Apple gains another carrier which may have better coverage in the Midwest than ATT, and still screws Verizon.
I have recently traveled out of AT&Ts;owned towers and encountered the “Off Network” too much data challenge. I’m now on a watch list and if I were to continue to abuse my agreement with AT&T;I’d be asked to cancel my account.
As I look at Verizon’s US coverage I can see I would not have encountered these issues. I use my iPhone while traveling to check weather etc as I was vacationing pulling our travel trailer and its really nice to know what’s ahead whether it is weather or a place to stop for the night.
Plus my iPhone doesn’t work at my residence. I knew this before buying the phone, but my original reason for AT&T;before the iPhone was invented was due to their GSM network and the ability to use my phone internationally as my job takes me all over the world.
However, I now use Skype on wifi when traveling overseas but this problem with data outside AT&T;’s owned towers here in the US has me a bit miffed.
More competition is normally a good thing and I’m ready for a Verizon solution.
@TheConfuzed1:
No, methinks it’s you that underestimates the level of entrenchment of the Verizon business model. And I might add, that’s a business model that is so last century — literally.
Verizon rejected the iPhone golden egg opportunity once already, what makes you think they’re going to turn over their entire MO just for Apple. It won’t happen.
And it won’t happen for another reason, and that is CDMA is old-tech. Verizon has stuck like glue to CDMA. Whilst GSM has become the de facto world standard, with over 1 Billion subscribers and rising, whereas CDMA is pretty much a north American technology that has almost reached saturation point with it’s 270 million subscribers.
Apple is after a global reach in what is certainly a global market. That global market is demanding GSM cell phones.
Oh, by the way… only three developed nations use CDMA technology [like it or not], and they are United States, Japan and South Korea. Those markets are becoming pretty saturated with subscribers.
There are competing viewpoints regarding CDMA versus GSM, but that battle’s been largely won [or lost, depending on your point of view]. Apple, and Steve Jobs in particular wanted to gain a 1% worldwide cellphone share. He’s exceeded that handsomely… but that would <i>never<> have happened had the iPhone adopted CDMA technology.
Verizon will not get the iPhone. Forget all the CDMA/GSM crap, the sticking point is that Verizon will want to control the device (and the App Store) and Apple won’t let them. If Apple’s going to add another carrier, they would be better off going with T-Mobile. It would be quite an easy thing to do.
People also forget that Verizon has stated that the only App store on any phone on their network is Verizon’s own. Plus they want you to use their network to transfer data, their Vcast service for video, etc. The iPhone on Verizon would not be the iPhone that those Verizon customers want.
@ Josh
Easy to say that when you’ve got ATnT as an option.
I think people who already have iPhones don’t have a clue what this exclusive deal is like to all of us out there who don’t get any or very poor ATnT coverage.
I had $500 all ready to go when the 2007 launch was announced, and then found out after many phone calls that I was going to be left out of this revolutionary product.
Imagine for a moment that when OS X was launched Apple said, “Available in 35 states!” And you were in one of the 15 that couldn’t get it. Here’s this technology that blows everything else away and it isn’t an option for you for some seemingly arbitrary reason.
So, while I can see why Verizon isn’t anybody’s favorite for ignoring the iPhone a few years ago, those of us who rely on a CDMA service like Verizon sure wish Apple would make an effort to cater to the millions of us on the outside of the glorious iPhone bubble.
We’re fans of the best technology, too, and I’ve got to say that I really like my iPod touch but would LOVE to have an iPhone.
To bad. ATT dosen’t serve the area I live in. If you look at their service map, there are large swaths of the US uncovered by their service. All the carriers have this problem, but multiple carriers would overlap many of these areas. Well, thats Apples choice.
Finally, someone who makes sense!
I’m a person who switched from Verizon to ATT prior the launch of iPhone. And it wasn’t just me, but whole company. ATT just gave us better personal service, phones, 3G data, and other other things. For example, they actually built a repeater tower on our building’s roof to improve the signal. Of course, neighbor companies were happy with improved ATT service.
So, when I read all the comments about how ATT is horrible and Verizon is great, I don’t buy it. I’m convinced no carrier is all that great. Maybe Verizon has more coverage, but in the LA are, I dropped calls on Verizon that just doesn’t on ATT. I’m sure there are areas where the opposite is true.
The larger issue is CDMA. I cannot imagine Apple developing new technology and write separate software for that technology. That just isn’t Apple’s way. They standardize the hardware, and build incredible software. One iPhone worldwide allows them to focus. Remember, the CDMA phone would be built for one market–the US (although CDMA is available in two other countries, both those countries have GSM carriers). It’s cost cannot be amortized over enough buyers to make the cost low enough, and for Apple it is all about net profits.
But the largest issue is economic. Apple has incredible leverage over ATT. In fact, Apple may or may not own ATT stock, but it has so much revenue control over ATT that they probably act like the largest shareholder. Apple is probably calling ATT daily with complaints from customers about slow service or no coverage. ATT is under pressure to get this done. Apple would never have this kind of leverage over Verizon.
I’ve purchased three iPhones on each launch date. The first one was a bit of a disaster, mainly because ATT’s system imploded. The second launch was better, though supply of iPhones and delays in getting service was kind of bad. The third launch this year was pretty nice. ATT gave up a ton of control on these launches, especially the last one, where you could get preapproval to get the new iPhone, reducing your delays even further.
ATT needs Apple a lot. But you’d be kidding yourself if you think Apple doesn’t need ATT. One partner is Apple’s model for success. Apple can maximize profits from ATT. Yes, it’s a bit of a dominant/submissive relationship. But Apple has a well trained submissive, willing to do anything for Apple. Verizon is an unknown. They are legendary for not giving up control on their hardware, and if they do it for Apple, they do it for everyone.
And for those of you passing along urban myths that Apple offered the iPhone to Verizon, it’s clear from real news stories from real news services, that Jobs was playing with Verizon. Smart business move, because ATT needed iPhone.
If Verizon gets iPhone, I will streak a Verizon store.
I have to agree that right now, T-Mobile would likely be the only other US partner in the next two years. T-Mobile isn’t big enough to tick off AT&T;and Apple wouldn’t have to redesign the iPHone around CDMA.
But there is no way iPhone is going to Verizon until they use GSM. That would simply distract them from the many GSM partners they can hook up with in the rest of the world.
Plus, Apple is all about focus nowadays, they are not going to start creating products that they know will have obsolete tech in two years.
Verizon needs to grovel and beg and come suck Apples you know what first
If Sprint had any sense about them, they would be scrambling to upgrade their networks to be compatible with the iPhone, then plead their case with Jobs for expanding availability to them. Apple really needs another provider, if only to take some pressure off themselves over coverage and connectivity issues some people have now with ATnT. They obviously have no qualms about having multiple partners in a region, and Verizon isn’t caving in any time soon because they aren’t just that desperate or agreeable. Sprint should be that desperate though, whether they realize it yet or not. And opening up to more providers will only put more pressure on Verizon to rethink their ways. A lot of people won’t ditch Verizon for ATnT, but maybe they would for Sprint if their service is compelling enough where they live.
Of course T-Mobile should be doing the same. Heck, they have the iPhone on some of their European networks… you’d think getting it in the US too would be a significant priority.
Have to disagree on this one – an effective marketing campaign points out the weaknesses of the competitor, while simultaneously describing the strengths of your product. These ads do just that – and while the usefulness of the claimed features are dubious at best, it’s not like the commercials scream “the iPhone sucks compared to the Droid”. They simply point out what the relative merits of the Droid are in comparison to the iPhone. Sure the commercials mock Apple’s, but how else to you get the attention of potential Apple customers? It certainly has gotten the Droid some notice, I think it works well. Apple does the exact same thing with their ‘Get a Mac’ campaign.
The technical issues aren’t important. Apple probably already has CDMA iPhone prototypes in-house, and CDMA is technically no worse than Edge, which all iPhones already support. If Verizon would give Apple the control it wants, and the exclusive with AT&T;was over, there’d be a Verizon iPhone very quickly.
I’ve heard the argument that people can just switch to AT&T;, so they don’t really need Verizon. Or that Apple makes money with an iPod touch instead from people who can’t get the iPhone. People miss the point that similar arguments apply to France as well, which initially had a single carrier. In the nine months since Orange lost exclusivity there, iPhone’s share of the smartphone market in France has gone from 15% to 40%.
“… who will be incented to extend their exclusive…”
Incented? Do business grads have to take English? Or at least know how to turn on spell check?
The most significant reason why exclusive deal in the US (with AT&T) is not going away is the subsidy.
AT&T is paying massive subsidy for iPhone, compared to ALL other phones (smart or dumb). Across the US carriers, maximum subsidies top at $250. It has been common knowledge that the subsidy for iPhone, since 3G, has been around $450. The only reason AT&T can afford to give such high subsidy, knowing full well that they CANNOT recover it during the initial two-year contract period, is that every single iPhone will remain on AT&T after that contract expires, continuing to recover that subsidy until it is eventually paid off (about three and a half into iPhone’s life). Most of the original EDGE iPhones have already payed off their up-front subsidy portion (which used to be $150 or so), since part of that model’s subsidy was made through monthly plan, and that went for the first two years only. However, not a single 3G has paid of its subsidy yet (same goes, of course, for 3GS).
If another carrier were introduced in the US, the subsidy would automatically go down to $250 or lower. No carrier can accept a risk of selling an expensive handset with a heavy subsidy, only to allow the customer to leave before the subsidy has been recovered. US customers love jumping from carrier to carrier if that can land them a new free (or cheap) phone with a better plan or coverage, and they’ll have no problem dumping their old AT&T iPhone and going to Verizon (or T-Mobile, or whichever).
Synthmeister has it right.
The IPhone is GSM only. Most of the world is GSM. No hoping in the world is going to get Apple to offer a CDMA phone.
Canada is showing the way here in North America in that they will shortly have competing carriers offering the Iphone. Yay Canada.. Let the market decide which carrier offers the best data plan to attract customers. Apple needs to do the same thing here that they have done in Canada and in France.
The only other carrier in the US that could offer the Iphone is realistically is T-mobile. T-Mobile is GSM and sells the Iphone a in Germany. Thus they already have some relationship with Apple which might be extended to the US? Or maybe it will have to wait for the ironclad exclusivity contract with AT&T;to expire, or a new model or something . How about a $50 Iphone?
Verizon customers sorry, you are simply out of luck on the Iphone front. Give it a rest. It isn’t going to happen. If T-mobile manages to get the Iphone at least you will have a choice of GSM carriers for you to switch to.
Service in my area is spotty on the ATT net (ATT rates it as good, but good isn’t good enough). I would love to use an iPhone. What I want to know is when does Apple plan to buy Verizon? Apple has a market cap that is twice that of Verizon. Heck, Apple could likely pay cash for Verizon if they offered to pay off, with stock issues, the 62 billion with a “B”debt Verizon carries on the books.
@ doc
Apple buy Verizon? Why would they do something so foolish? It would put them in direct competition with their partnership with ATnT; the network isn’t yet compatible with the iPhone; it would unnecessarily complicate their business model; they would have to throw out all the other phones (why would they sell and market phones that compete with the iPhone, even the dumb phones?) and in the process lose a LOT of customers who simply don’t want an iPhone or can’t afford one…. the idea of Apple buying Verizon is stupid beyond all belief.
Those saying that verizon has to slap their stuff on a phone haven’t used the droid. I’ve had one for a few days and I have to say it’s a really nice device.
Verizon hasn’t made really done anything different to the android software.
I think verizon will not get iPhone. But I don’t think it will be a big difference. Droid is that good.
(it’s a review unit – I own an iPhone)