While appearing on Bloomberg News on Friday, Broadpoint AmTech analyst Brian Marshall explained why Apple, “the greatest technology firm on the planet,” will add Verizon as a U.S. carrier in 2010
His points:
• AT&T Mobility’s U.S. iPhone exclusive deal expires in June 2010.
• Apple’s per iPhone US$450 subsidy from AT&T will drop to $300 per iPhone when exclusivity ends.
• 4% of AT&T subscribers have Apple iPhones, but they consume roughly 40% of the network’s bandwidth.
• Moving to a multiple-carrier model by adding Verizon to AT&T could generate 14 million additional iPhone sales in 2011.
In addition, Marshall discussed the importance of iPhone in China, why Microsoft’s launch of Windows 7 doesn’t negatively affect – and just might boost – Mac sales, and more:
Direct link via YouTube here.
[Attribution: Fortune. Thanks to MacDailyNews Readers “Dale E.” and “James W.” for the heads up.]
T-Mobile please!
I’ll believe when I hold that iPhone in my hands. Been burned too many times.
why do pundits continually trumpet the same rumor and speculation/wishful thinking as fact?
If this is simply a market manipulation technique, it is a ridiculous tactic. Anyone has to understand that Verizon’s network uses COMPLETELY DIFFERENT TECHNOLOGY than AT&T;and 90% of the world. Why is this simple fact so impossible for people to understand? Building a CDMA phone just for one carrier would increase the price of the phone, and not allow for the economies of scale that a single UMTS technology platform allows.
It is also frustrating when ‘analysts’ report details of an agreement that has never been made public, as if they know the internal workings of the agreement. I think there should be large letters at the bottom of the screen that say ‘OPINION’ when people like this are talking.
ugh.
MDN word: service- as in: if you think this would help iPhone service, have fun doing more than one thing at a time on that big red network like, I don’t know, talking and checking email at the same time. “Hold on, i have to check my email, can I call you back?”.
I can’t wait for Verizon to start explaining why things are so crappy on their network when they have 20 million+ iPhones sucking down all their supposed bandwidth…
I for one will stick with AT&T;- having a GSM with worldwide capability is important to me.
and another thing: Let’s see what happens to ‘the network’ when all of those iPhone start sucking up all of the bandwith.
Is there a island of misfit analysts?
Haven’t had a dropped call yet on my iPhone. I’m an AT&T;customer BTW.
Sprint please.
Best reception I’ve had including AT&T;and Verizon.
Heck, open it to all and drive down the monthy rates.
@voice of reason
There’s no technical reason Apple cannot adopt the CDMA radio and make the other necessary adjustments. If Motorola can do it for Droid, I’m quite sure Apple can do it for iPhone.
Question is, will Verizon accept the iPhone business model that cuts out the carrier from Apps and other support?
I think not. That’s why I think the iPhone will more likely first be seen on Sprint and T-Mobile months earlier than Verizon.
The reason everyone and their brother thinks Verizon will get the iPhone is a simple one. Eventually Verizon will get the iPhone.
The new high speed network that Verizon is just beginning to deploy now will be able to carry today’s iPhone 3G and 3GS.
Apple is using multiple carriers in every country it can for maximum exposure and sales. Why wouldn’t Apple do the same thing in it’s biggest market?
Use your heads people.
You forgot about the LTE network that Verizon is rolling out, which is more compatible with the current technology than CDMA.
Just unlock the iPhone for the First Gen version.
There is NO REASON why it is not unlocked except to give ATT executives their bonuses.
I am out of contract, I paid the Full amount on opening day, and I am still being gouged.
If he’s correct about the 450 to 300 subsidy, then it fits in with the 350 early termination fee.
We have a lot of laptops with verizon cards in them. They seem to handle the traffic. Plus they allow tethering (for a cost of course) too.
Short SBC, I mean AT&T;, and buy Verizon?
The best argument against this idiot’s speculation is his assumed pricing after the exclusivity ends. If ATT were to continue selling the iPhone at current levels (and why shouldn’t they- its their #1 selling handset), they will gain enough extra net revenue to upgrade (every 12 months) 10,000 towers to whatever.
THAT would do far more to take the strain off ATT’s network, than would adding some crappy CDMA competitor.
The iPhone in Canada is sold on 2 CDMA providers networks, Bell and Telus. However, they are still gsm phones and are actually using a newly built hspa+ network. No reason why this can’t work with verizon as long as they have a large 3g compatible network.
The biggest reason I see against this, is Verizon giving up “charging” for music, video, email, etc…
Crippling phones too.
I love how analysts come on the tube and spout half truths and suppositions as if they’re facts. They are truly the Delphic oracles of our time.
Verizons 3g is not compatible with the iPhone.
Isn’t the iPhone in China on CDMA? If so, then Apple’s already building millions of CDMA iPhones.
If China is not CDMA, then simply using Verizon’s new LTE network, that won’t work because LTE won’t be everywhere. So Verizon customers will have large areas without service unless Apple makes a CDMA iPhone.
verizons 3g network is EV-DO data, which is not compatible with UMTS devices like the iPhone. Bell and Telus, as stated earlier, operate an HSPA network in Canada, allowing UMTS deviec to work on their network, in addition to providing cdma for voice.
UMTS is all over China, and although they do have CDMA networks, the vast majority is UMTS.
@Chaz: The technical difference is that the iPhone would have to have dual radios like ‘world edition’ blackberries, or be sold in two completely different versions like other handsets. Verizon has no capacity to adopt a UMTS device, so phones for them (and Sprint ) have to be built specifically for CDMA 1XRTT and EV-DO, thus splintering the product into two lines, which is something that Apple generally doesn’t do.
Why i mentioned the economies of scale is that since Apple builds a device with one protocol they can bulk buy components for the entire world market, rather than specializing one production line for one carrier in one country, if they were a phone company rather than an electronics company that strategy might make sense, Instead they focus on a standard product that can work everywhere. And also costs much less to make by not having separate production lines.
June 2010 is a long time from now in technological terms….the cell landscape could be different by then. I’m no fan of AT&T;, but I will be darn sure of what I’m getting in to before I would switch.
Building CDMA version of a GSM phone is practically trivial. Everyone else has been doing it for years (if not decades). All other major cellphones are available in GSM and CDMA flavours. The wheel has already been invented for Apple; they just need to plop in a different chipset. No major effort.
Apple is currently selling iPhones for about $650 wholesale. The cost to make them is roughly $190. In order to offer iPhone on other carriers, that wholesale price would have to be reduced by at least $150 (and possibly $200). This would cut the mark-up amount by one third (or more). Therefore, in order for Apple to make the SAME amount of profit they were making while exclusive with AT&T, Apple would have to sell 50% more iPhones. In addition to having to sell that many more, they would have to provide support for 50% more devices. And still make the SAME amount of money as today.
Meanwhile, Apple is selling existing iPhones as fast as they can make them. They have barely two weeks of inventory on these; many retail outlets are frequently out of stock.
Can someone remind me, WHY would Apple want to increase support demand and sales volume by 50% in order to bring in exactly the same revenue?
It would have to be cdma, you are correct. If I was doing it, it would be cdma with LTE working if you have access to it. Maybe an option to keep it off if it’s not in your city. Even though verizon finished initial testing in boston and seattle, and are promising a bunch of cites for next year, most of that availability will be for data, not voice. I use verizon, because of work and geographical location. If verizon meets Apple’s demands (app store, no changing software … etc) I see no reason not to put the phone on the network. I don’t understand why anyone would be against it if Apples demands are met.
Why do they have to lower wholesale price 150 just for other carries? They lose that, if the guy is correct, in June wit ATT. So they need to double the ATT sale after June to stay even with today.