Apple and Verizon are in talks for the carrier to distribute an “iPhone-lite” device and a “media pad,” with one of the devices to be launched sometime this summer, BusinessWeek is reporting. As a Verizon subscriber, I wish I could believe this story, but we have several reasons to think it’s just a negotiating ploy aimed at getting more concessions from AT&T as it tries to hold onto its iPhone exclusive.
Lousy Timing Part I: Apple wouldn’t launch a competing product this summer as it could steal the show from its rumored next-generation iPhone on the AT&T network.
Lousy Timing Part II: If Apple wants to launch an iPhone with Verizon, it would rather do so with an LTE phone than a CDMA version, for the reasons Om outlined earlier. But Verizon’s LTE network won’t be ready by summertime.
Verizon and Wi-Fi VoIP Are Like Oil and Water: BusinessWeek describes one of the devices as a media tablet that uses Wi-Fi to make VoIP calls, but Verizon hasn’t pushed either VoIP or Wi-Fi on its phones.
Legal Issues: It’s hard to believe that Apple has found a loophole in its deal with AT&T that’s big enough to slip an iPhone-lite device through without getting some sort of smackdown from AT&T’s legal team.
Apple Doesn’t Strip Down: As our colleague over at TheAppleBlog points out, Apple doesn’t make stripped-down and cheap versions of its devices as BusinessWeek is claiming the phone would be. The Nano and Shuffle aren’t stripped-down iPods (and from a margin perspective, they aren’t cheap); they’re designed to offer different functionality.
Verizon Doesn’t Share: BusinessWeek noted this as well, but it bears repeating. Verizon isn’t as likely as AT&T to cave on issues like sharing data revenue with Apple. Nor is it likely to push iTunes for downloads rather than its own music store. Plus, while AT&T is gaining millions of new subscribers who want the iPhone, Verizon is still picking up new additions as well, so isn’t exactly hurting. And it has a better network than AT&T, which may mean that Apple is more willing to cave on some of Verizon’s non-negotiable points. Apple can’t be thrilled about the poor user experience some people have had on the AT&T network.