Apple To Verizon: Can I Hear LTE Now?

37 Comments

gigaom-icon-lteUSA Today reports that Apple (s AAPL) and Verizon Communications (s VZ) entered into high-level talks that would allow iPhone to come to Verizon’s network. USA Today speculates that this could means a CDMA-based iPhone. I don’t buy it. Around the world, the CDMA ecosystem is slowly but surely contracting. To spend development dollars on a protocol with the limited future wouldn’t make sense. Instead, I think if there is indeed an agreement with Verizon, it will be for devices for the Long Term Evolution (LTE) 4G Wireless networks.

Verizon has plans to launch its LTE network in a handful of cities by the end of 2009. By 2010, Verizon hopes to have 25-30 cities LTE-ready. Apple is smart enough to realize that, just like PCs needed processing power gains, data-centric wireless devices need wireless bandwidth gains to increase their utility. Trials show that LTE networks can run at speeds of between 50 Mbps to 60 Mbps. More importantly, LTE is a global standard, allowing Apple to sell the same 4G version of its device across the planet. LTE is expected to sweep the planet by 2012.

AT&T’s plans for a 4G rollout are currently behind Verizon’s plans. The company, which currently has an exclusive on the iPhone in the United States, plans to stick with HSPA up until 2011 then transition to LTE. But any chance of Apple giving up on the iPhone partnership — even a hint of a deal with Verizon — is going to spur AT&T into accelerating its LTE rollout plans. The company is increasingly reliant on Apple’s iPhone to show growth in sales and profits. The company is losing nearly 10 percent of its wireline customers a year and is increasingly looking at wireless as its future.

37 Comments

Bob

Why in the world would anybody want an I-Phone from Verizon. They are already talking about doing away with their 5GB allowance and downgrading it to MB. So lets see, everytime that I try to get on their slow internet service, I am going to be charged for having to wait for a page to open, not to mention what ever I download. Verizon is getting ridiculous in their pricing, (HELLO), people do not have money to throw away, and neither do I. If they raise their internet prices I’m gone.

2guys1blog

LTE can’t be the ONLY standard in the industry. It won’t EVER be. No one data standard can be the only available standard at any one time because not every area will support the standard. Duh.

kirk

Yes it is true that VZs EVDO network is much better than ATT’s UMTS network, both in speed and good through put, but most of ATTs issues are caused by the usage rate, and the primarly reason is the iPhone.

However, the reason you will not see Apple offering a CDMA iPhone is due to the exclusivity with ATT. Apple is building a huge residual tail and that cash stream would go away if they were to terminate the exclusivity. The other reason is the market for CDMA is small, and limited from a time perspecitve. Apple could invest in CDMA, provide to say 25% of the 80M CDMA customers, but they would lose more money from ATT in the process due to the termination of the residuals from ATT. Furthermore, if they did bring on the CDMA version VZ would be forced to deploy more EVDO radios or move to revB, which would represent investment in old technology.

VZ is looking to move to LTE, and wanting to lead. Doing so gets them free from being the only CDMA firm in the world and allows them to benefit from the comodization of LTE just as their competitors have benefited from GSM/UMTS commoditizaation. VZ appears to be pushing the LTE introduction up and will be data only to start. This hopefully will permit a device with apple, such as the rumored tablet. The market for such a device would be someone that likes the iPhone conept but wants a seperate, small phone, and a seperate larger screen as their computer.

Bernie

Ok…I have a degree in Business, a degree in Business Information Systems, and a Master’s Degree in Network and Telecommunications Management. The question here is why wouldn’t Apple roll out a CDMA for America’s largest network? The only reason Apple went with ATT in the first place is because 1…Verizon said NO to the Iphone initially because they wanted too much freedom with the handset and apps and 2…ATT had the largest network in America at the time…not to mention ATT uses GSM which is widely used around the globe. Back to my point…CDMA is a superior technology than GSM on a bad day. The data is better and the QoS is better. How can you even say they would not roll it out on Verizon’s 3G network whish is faster than ATT’s will EVER BE!!! It is just good business to add 80 million possible customers to your product line…who in the hell wouldn’t do that? Somebody please explain this to me???

stomps

I used to work for a handset manufacturer and I think a lot of this talk is garbage. LTE is going to start as a data only service. The reason is the back haul…..If you cannot support the increase in data through the ground at an IP transport level, what makes you think that VOIP is going to be deployed when LTE is initially released? As SAE is implemented(back haul) the capacity for VOIP will become a reality…..This is several years and BILLIONS OF DOLLARS away….
The answer regarding HSPDA and EVDO REVA is simple. HSDPA has higher peak rates than EVDO REVA given that proper TCP IP setting are utilized. The differentiation here is the footprint expressed for 3G services by Verizon and AT&T. Verizon has 5 times more coverage of 3G then AT&T currently. So naturally, you would expect that your average data throughput would be better if you are a truly a mobile user and not a sitter.
Apple and its IPhone deployment is only a matter of systems integration and not real core R&D. That what the chipset manufacturers are there for along with protocol stack providers. You are combining everyone’s technology into a single product…Hence, integration is what they are really doing. The only creativity that’s involved is the packaging, U.I./G.U.I., and interfaces created to mitigate cross technology interoperability. I challenge anyone to crack open an I-Phone and actually see an APPLE CHIPSET! Samsung, Arm, Toshiba, Broadcom, Infineon, and countless others come to mind regarding core technology components.
In any regard, the business guy is correct. Implementing the product design for verizon should take about 6-12 months depending upon how well they know and adhere to the device submission process for verizon. anyways, got to go.

megan

A cdma-based iPhone is very possible with the release of the r-uim card (a removable id chip for cdma phones… kind of like a sim card for the gsm phone) in the American market. Said card has been used in China, India, Japan, etc. since 2002 on their cdma networks (which is why they get to use the nifty little iPhone and we Americans do not).
An r-uim card is interchangeable with a sim card, so the same iPhone my friend Billy used on AT&T, I could technically use with Verizon.
Verizon recently announced that they will be using “smart cards” developed by G&D (the company to develop to first sim card more than 20yrs ago) with their new lte network, which makes me think that maybe this “smart card” might be something completely new, with the new “big 3” capabilities (until lte takes off of course)? cdma, gsm, and lte?
The r-uim could be a stepping stone into the new “smart card” for Verizon to get people to buy a new phone for the lte network that is supposed to be launched in a couple of cities by the end of this year and up to 210 by 2012. Let’s be honest for about 30 seconds here. Who wouldn’t buy an iPhone on Verizon? I can smell the signing of new contracts already.

ajain

Disagree with Om’s argument that, “spend development dollars on a protocol with the limited future wouldn’t make sense”.
1. Phone vendors do not do much protocol development. To add CDMA, Apple would have buy the appropriate CDMA handset ASIC from Qualcomm and use it instead of the Infineon UMTS chip they are using. This is the reason why other smartphone companies like RIM and Palm (with volume comparable to iPhones) have devices that work on GSM, CDMA and UMTS.
2. Most devices have a lifespan of 6-12 months. Apple’s iPhone 3G is at the top end, around 12 months. Since Vz’s CDMA network going to be around till the middle of the next decade, if not longer, Apple can easily recoup any investment.
3. Finally, if the development is expensive, and the Qualcomm CDMA chip costs more than their current UMTS chip, Apple and Verizon can handle the price difference through commercial terms. Since most CDMA devices cost a little more than equivalent UMTS devices, Verizon _might_ be OK putting in a higher subsidy.

Paul Allen

“Around the world, the CDMA ecosystem is slowly but surely contracting”

Gracious! You’re missing China and India expanding. China Netcom just rolled out EV-DO to a bunch of cities!
More NMT networks are going cdma-450 if their governments don’t intervene (Sweden)!

Krishna Baidya

some updates on CDMA future in India:

Reliance Infocomm, which holds 57.51% of CDMA sub base in India, launched GSM services in Dec 2008 with initial coverage of 11,000 towns and 340,000 (~45% of its current subscriber base). By January 2009, the operator has completed most of the capital spending on it’s second network and has spent $2.1 billion.

Tata Teleservices, the other leading CDMA mobile operator (holds about 35% of CDMA sub base), recently announced it will invest $2 billion to roll out services through the other technology, GSM.

BTW, There are 258.23 million GSM subscribers India constituting 74.44% of the mobile subscriber base by the end of 2008 and forecasted to capture more than 80% within next 5 yrs.

Marin

I agree with some of the sentiments already expressed here. The LTE claim makes sense in a certain light, but big V’s devices are going to have to be multimodal for a long time until the network’s completely rolled out (10 years?). Like anything, it’s gong to come down to money: Verizon’s going to have to guarantee a certain volume at a very nice price. Sure, it has 80 million customers – most of which aren’t smartphone users – and many would love to get their hands on an iPhone. But the GSM version has the advantage of scale and volume because so many carriers around the world use it. This drives down source component costs, and tons of other things.

Truthfully, I think this was a strategic leak by Verizon to help goose its stock, as it conveniently reported its earnings today.

Sparks

Android will catch up before LTE rollout,
makes hardware moot.
In Korea there are IPhone clones with triple simm cards, and there are sim to cdma emulators for the additional slots.
The open source Android will become Dominant once Microsoft buys a majority of their stock holdings.
You are all right about the “Its all about the Money” part though-
IMOHO.

phil swenson

I have to disagree about CDMA. You think AT&T coverage is bad. An LTE only phone any time in the next 3 years would be much much worse. Verizon has to leverage what they have and CDMA is going to be around for a long time. It’s not that big of a deal to make a GSM/CDMA dual radio phone. Been done many times. Or create a second CDMA only SKU. The complexity of the iPhone is not in the cell radio, but in everything else.

No one wants a phone that quits functioning when they drive 5 miles outside of the city. Notice how EDGE is still everywhere? When I drive outside a metro area, EDGE takes over on my iPhone. And it probably will for years.

Verizon is huge, it’s worth creating another US only SKU for.

Gadget Sleuth

I’d LOVE to see more choices for carriers for the iPhone…it would nudge both carriers to provide better service, something they both need.

Schwartz

Doesn’t Verizon charge $50/mth for PDA/Smartphone data? I would expect that’s what they would charge for iPhones. That makes AT&T’s $30 seem like a bargain.

avremele

wrong. 50 bucks is only to use tethering. they charge the same 30.

macdad

Limiting future use of the iPhone to these $suckers is bad for business. Verizon doubled wired phone bills in the space of a year, and ATT has used its monopoly to generate $ in the same fashion.

charlie

This is beyond stupid.

Apple doesn’t access to 30 million+ Verizon customers? How much would a CDMA iphone cost to develop: $15 million, tops? Come on.

Who the frak cares about LTE? This is all about money. Apple wants to make sure it gets a great deal, and a huge cut of money. AT&T knows this. They will be forced to pay up, because they it is only thing they can use to batter down Verizon.

Q dub

Great point Charlie. And this wouldn’t be Apple’s first CDMA phone, the iPhone in Japan is essentially a CDMA phone…so clearly they’re their willing to fork the hardware for a big enough market.

Miriam

I’m on Verizon and I haven’t gotten an iPhone because it would be so expensive to switch carriers. Do you think if I close my eyes and wish real hard then this will happen?

Jan Dawson

In summary:
– Even when Verizon launches LTE, most of its network will still be running EVDO or CDMA 1X for data, and all of its network will still be running CDMA for voice. This won’t stop until at least 5-7 years from now and possibly longer
– AT&T isn’t upgrading to LTE as fast because it has more room for speed improvements on its current 3G network technology – HSPA – than Verizon, and so can offer more widespread speed improvements than Verizon in the short term, even if the ultimate speed isn’t as high (it will go to LTE about 1-2 years after Verizon)
– Therefore, unless Apple is willing to do essentially a huge new development effort for 1 or 2 carriers globally running CDMA that would be worthwhile partners for Apple, a Verizon iPhone doesn’t seem likely any time soon

Cell U Lar

Verizon is not running 1x for data, they are at Rev.A and Alltel is now up to Rev.A as well. (Verizon/Alltel)
GSM is nice but it’s still based on TDMA.

When Apple was looking for a carrier they approached Verizon first and Verizon said no.
Look at the limitations Apple put on AT&T.
If Verizon does get an iPhone it will be better because AT&T ‘bled’ the way and the bugs should be worked out now.

SK

Going for a next generation mobile standard without supporting a legacy standard is like living on the top floor without a way (escalators or steps) down. The air is nice up there, but there is a big world outside the “top floor” where you cant live. I find this article laughable. I can understand the excitement for a new technology but your thoughts are pushing a bit too much. I am currently working on the LTE technology as a designer and LTE has a long way in become the standard that could replace GSM/CDMA. LTE has to co-exist with previous technologies just like 3G has with GSM no matter how big the jump in technology is.

Justas Anaside

Just a Heads Up that this is the same USA Today author who started the whole “AT&T has a 5 years iPhone Exclusive” rumor that EVERYONE reported as fact, only to quietly change that to “two years” when he wrote an article ==a year or two later== about the iPhone 3G.

I don’t know about you but this USA Today author for SURE hasn’t gotten my trust back yet.

seeking venture capital

does anybody else see the next internet boom that is about to happen? i have not been this excited since my cable company started offering internet service!

– jason nadaf

Bud

One thing this rumor does is kick ATT in the ass about upgrading their network quicker. That is really the only way they could possibly retain iPhone exclusivity, unless Verizon was to make undue demands, which, is still within the realm of possibility. I do not expect an iPhone for Verizon UNTIL there is LTE, and ATT should have LTE by then as well, although they appear to be lagging. ATT is certainly not hyping LTE like Verizon is.

ATT is adopting the LTE standard as well, but you NEVER see them mentioned in the numerous press releases about LTE. The past few months of LTE press releases in the US probably came direction from the desk of Verizon PR; ATT simply is not mentioned.

That being said, Verizon and ATT both have issues with network and customer service; your coverage footprint may vary. Verizon’s current standard penetrates the interior of buildings better, apparently that baby bell wasn’t as concerned on cannibalizing landline customers as much. But I see no CDMA iPhone before LTE, unless there is currently a chipset that has BOTH GSM and CDMA radios within.

Krishna Baidya

i totally agree that lots of feature/ applications/ services can be better enjoyed on faster data network of future and surely apple will be investing $$$ on that sort of development.

Om, I guess you have already discounted the future parallel path to LTE for CDMA stream. I tend to agree with that as well.

Raj: lots of CDMA players are making a switch and its not surprising the Verizon Wireless will adopt LTE.

Verizon Wireless announced on September 20, 2007 that it plans a joint effort with the Vodafone Group to transition its networks to the 4G standard LTE. The time of this transition has yet to be announced.

Telus and Bell Canada, the major Canadian cdmaOne and EV-DO carriers, have announced that they will be cooperating towards building a fourth generation (4G) LTE wireless broadband network in Canada. As a transitional measure, they are implementing 3G UMTS to go live by early 2010.

Raj Khanna

Actually Om, LTE for both Verizon and AT&T would be only the data part of their service (like HSPA is currently for AT&T right now and EV-DO is for Verizon). The voice networks (GSM for AT&T and CDMA for Verizon) would continue to remain the same even after the launch of LTE in 2010/2012.

So this means that a Verizon iPhone would indeed be a CDMA device (even if with LTE); the first for Apple.

And I know you’re thinking VoIP over LTE, but no, that isn’t going to come for at least another 4-5 years.

Om Malik

Raj

You are right… about CDMA. I checked with the Verizon folks. They say:

“Voice is packet data on LTE (via IMS). Initially will remain over CDMA (1xRtt)”

Yeap

Actually your all wrong… LTE is voice and data. Voice will run like VOIP (IMS). Hence, the ability for all networks to be on LTE and make calls. Why would this just be data? Your all wrong. CDMA will remain for Verizon but LTE will be more of a VOIP approach. If i am wrong, can someone please explain to me why voice would not be included? Why would all networks merge just data with LTE? Voice will roll out through LTE like RAJ says but when it launches i am sure LTE devices will be IMS 100% and previous devices will be cdma. I also think CDMA rev a will still be going on for a while. LTE means 100% new network for VOICE & DATA. LTE Devices should be running 100% on the service.

Dude

LTE is just a network standard for data. Eventually, consumers that have a SIM card for voice and data, will be able to insert that SIM into a VZW device and use that device on Vzw’s network. Won’t be GSM or CDMA. LTE will be the new standard. Watch out AT&T and Sprint. Verizon’s got backing from Vodafone and DT. You’re all wrong…:)

monal

agreed….iPhone on LTE devices should be on the roadmap for Apple so VZW getting it in a year makes sense. Apple putting it on both providers network is win win for Apple

Pinoy Tutorial

We all know that AT&T service is now on a plummet but we also need to settle the facts first and see the side of AT&.

Updates: ATT had recently released a statement why they are suing Verizon. May the “there’s a misinterpretaion for that that” image help you to understand better why AT&T is having a boiling-point over the matter.

detailed sources: http://bit.ly/ATT-VS-VERIZON-Theres-a-misinterpretation-for-that

Hint: The conflict is about not including AT&T’s Zedge 2.5G on the picture :D

Flame-on!

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