Why the iPhone Isn’t on Verizon
Every year, around the launch of the newest iPhone, rumors about the iPhone coming to Verizon begin to build up. I suppose it’s really easy for people who are on Verizon to believe these rumors, simply because many of them would love to have the iPhone. I’ve personally heard friends and family tell me that they heard somewhere the the iPhone would be coming to Verizon, and every time I tell them that it is very unlikely that it will happen any time soon.
Most of the rumors seem to begin from analysts who believe that it makes strategic and financial sense for Apple to release the iPhone on the Verizon network. From there, the rumor gets spread around with the help of plenty of wishful thinking. However, there are obviously reasons for why the iPhone is not on Verizon and likely won’t be until at least 2012.
- The first reason is Apple’s contract with AT&T. Apple signed a five year contract with AT&T when the iPhone launched in 2007. This iPhone exclusivity agreement won’t be up until 2012.
- The second reason is the network. Verizon uses a different cellular technology than AT&T. While AT&T uses GSM, Verizon uses CDMA. This means that the cellular radios in the iPhone that are responsible for making calls and sending data do not function with Verizon’s cellular network.
Apple could make an iPhone with radios that make it compatible with both AT&T and Verizon, but the iPhone 4 (currently the thinnest smartphone on the market) is already packed to the brim, there might not be room for the CDMA hardware. More to this point is the capabilities of Verizon’s network; one of the reasons that Apple originally chose AT&T to carry the iPhone is because AT&T’s network allows for simultaneous voice and data transmission something that Verizon’s network did not offer at the time, and may or may not yet support to Apple’s satisfaction.
Because of the five year contract and the difference in network technologies I feel it’s pretty safe to say that, despite what analysts want you to believe, you definitely won’t be seeing a Verizon iPhone until at least 2012. And when that year rolls around, it’s perfectly likely that Apple and AT&T will renew the contract. Sorry Verizon customers.
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“Perfectly likely”? I'm one of those people who would get an iPhone tomorrow, early termination fees be damned, if it came to Verizon. I'd be surprised if Apple hasn't already done studies to figure out how many of me there are. Probably millions.
I understand the hardware and network limitations, but I would think that both Apple and Verizon have such a vested interest in carrying the iPhone that they'd be putting considerable effort into working those out.
Apple moves in mysterious ways, but it seems clear to me that the iPhone has succeeded in spite of, not because of, AT&T. If I were Jobs, I'd want to be rid of them as soon as legally possible.
If I had to throw in a hypothesis, I would say that it's much more likely that Apple and Verizon cannot come to terms that are acceptable to both companies. Both are notorious for their desire to control their products, and while Verizon has loosened it's grip a bit for Android phones, I'm willing to bet that there is some other sticking point (profit sharing, data plan details, etc) that is keeping this from happening.
Heck, it could even be over something as dumb as whether Apple will let another company put a logo on the phone (note that no iPhone has an AT&T logo…)
My original comment had the beginning cut off…
I had written a longer explanation of the following two points regarding why I don't think Ben makes a good argument here.
1. Contracts are negotiated all the time. If Apple wanted out of an exclusivity deal, they could get out.
2. Apple almost certainly has a working CDMA iPhone in R&D. Would only be prudent for them to do so. Also, you wouldn't have to have GSM and CDMA in one – you could have them separate.
Don't forget that AT&T most certinaly wants to do anything they can to keep the iPhone as an AT&T exclusive. AT&T pays huge subsidies to make the iPhone affordable for it's customers. Apple definitely enjoys that part of their agreement, and AT&T would likely be unwilling to pay if Apple didn't keep the iPhone exclusive.
I doubt that. Do you think that AT&T would just stop wanting to sell it's hottest phone, just because exclusivity ended? If they ended subsidies, that's what would happen (because you can bet that VZW wouldn't have a problem subsidizing it.)
Does AT&T do that with any other phone that goes non-exclusive?
Well I am thinking that the limitation of supply that apple claims, this is actually a move wherein they are preparing for the CDMA Phones and limiting the sales for AT&T so once if they have the partners with Verizon this will create a big impact in marketing perspective and creating a scenario that apple will likely to be successful. That means win win for AT&T and Verizons having those phone exclusive for both of them and 60-70% increase rate of sales. Secretly buying time so that they can supply the demand and will go toe to toe with Big Boys!!!