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Summary:

The Wall Street Journal is just barely reporting that a CDMA iPhone will be introduced this fall, and that Apple’s exclusive relationship with AT&T “appears set to end.” According to “people briefed by the company” (presumably Apple), the CDMA iPhone will be one of two released, with the GSM model “likely to be thinner and have a faster processor.”

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The Wall Street Journal is just barely reporting that a CDMA iPhone will be introduced this fall, possibly  September, and that Apple’s exclusive relationship with AT&T “appears set to end.” According to “people briefed by the company” (presumably Apple), the CDMA iPhone will be one of two released, with the GSM model “likely to be thinner and have a faster processor.”

While the rumor itself appears thin, looking at it in a larger context gives good reason to believe your next iPhone might not be chained to AT&T.

Chris Foresman at Ars Technica distills the biggest of those reasons into its graphical essence.

According to AdMob, Android is on the verge of passing the iPhone OS, at least on smartphones. Adding in traffic to Mobile Internet Devices like the iPod touch, which Apple dominates, probably puts Apple up by double digits. Still, Android is the biggest threat to the iPhone right now. Apple needs new markets, and what market is bigger than Big Red?

Verizon had 87 million subscribers at the end of 2009, compared to some 85 million for AT&T. Nielsen estimated the number of U.S. iPhone users as of 6.4 million last April, up from 2.1 million in 2008, meaning the current number of AT&T iPhones easily exceeds 10 million. Add Verizon as a iPhone carrier, and it’s a zero-sum game in the millions with the iPhone taking from Android.

Finally, the source of the rumor lends credence to it: not the “people briefed,” but the Wall Street Journal. As John Martellaro, former Senior Marketing Manager at Apple, writing for the Mac Observer notes, sometimes “Apple has a need to let information out, unofficially.” In his essay on controlled leaks, Martellaro cites the iPad leak in early January, which turned out to be true. That rumor was published in the Wall Street Journal and one of the authors was Yukari Iwatani, the author of the Verizon iPhone rumor today.

A Verizon iPhone makes sense for Verizon, Apple, long-suffering AT&T iPhone users, and even AT&T. Nothing reduces network strain like millions of customers taking their business elsewhere.

Related GigaOM Pro Research: Why Apple Should Choose Sprint Before Verizon Wireless

  1. This is news that I have been waiting for since the iPad rumors started. This also probably means that AT&T won’t be the only iPad 3G/4G service provider. Good news to those with poor AT&T reception.

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  2. However, the leak could be a means to pressure AT&T for a better exclusivity deal, though that won’t help the iPhone against the Droid. That’s why I think the rumor is true. Android is gaining too quickly to be ignored, and lawsuits aren’t going to change that.

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  3. Why does no rumor of a Verizon iPhone face the fact that Verizon’s network cannot technically support the features that make up the iPhone experience? Or that Verizon has a history of customer abuse and nickel and dime gouging users with overcharges? Why would an iPhone on Verizon sell well if it cost significantly more to use? True, Verizon could change their pricing, but my experience is that con men don’t reform, they just change their con. More difficult are the pure technical issues. Verizon has more coverage, but AT&T can expand their network by adding more of what already works. Verizon has to change the technology on every tower to even get equal. I’d be delighted if Verizon has invented some “1,000 mpg carburetor” for their system but it’s doubtful.

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    1. Verizon does nickel and dime, and their rates aren’t really competitive anyway, but this would be a Verizon-specific phone with EV-DO (or maybe LTE, depending on when it launches).

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    2. Talking and surfing with Luke Wilson is a pretty small part of the iPhone experience, and much smaller than the actual experience of making a phone call. Paying more for a phone call is better than paying less for a dropped one.

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    3. Nobody gives a crap if the Verizon iPhone can’t do data and voice at the same time.

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      1. I agree. Unless we are talking LTE, who would care, except a some Verizon die hard users?

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  4. Better hardware and a choice of networks will help, but is that really enough? The iPhone is just a retread of the iPod touch, so it’s entirely dependent on another computer to run iTunes.

    The great thing about my Nexus One (or any Android handset) is that it is a system unto itself. No other computer is required, it doesn’t just run single-tasking apps, it has live widgets (think Dashboard), and pluggable hooks, like selecting a photo in Gallery gives options to share a photo through whichever Flickr/Twitter/Tumblr/etc. apps are registered. Can your phone… and your network… do that?

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    1. Umm… the ipod touch is actually a retread of the iphone.

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      1. Your reasoning makes no sense. What do you come up with if you combine all the features shared by the iPad and iPhone into one device?

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  5. There is something really fishy about that graph. We’re supposed to believe that Android is anywhere close to iPhone in terms of a metric that actually matters to the market? What the heck is “Mobile OS Traffic Share” anyway? And Android went from <20% to almost 50% in 6 months? I don’t buy it. Someone is fudging the numbers.

    Common sense test: walk down the street – how many people are using an Android handset vs iPhone?

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    1. Exactly my thoughts ! Wonder if it has anything to do with fact that a much larger chunk of Android Apps are free-ad(mob) supported, leading to more admob hits ;-)

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    2. “What the heck is ‘Mobile OS Traffic Share’ anyway?

      Dunno. But when the iPhone hit 70% of the ‘Mobile OS Traffic Share’, you fanbois were taking it as gospel. Now that you’re down under 50%, it’s suddenly a dodgy statistic that doesn’t mean anything.

      “And Android went from <20% to almost 50% in 6 months? I don’t buy it. “

      Well, let’s see. October ’09 to December ’09 was the release of the Motorola Droid on Verizon and Google’s Nexus One on T-Mobile, as well as some nice Android phones on Sprint. You might have seen the ads on TVs, Billboards, radio, etc.

      “walk down the street – how many people are using an Android handset vs iPhone?”

      I see more people not using an iPhone than I see people using an iPhone. Needless to say, I can’t tell whether they’re using Android or not.

      See, here’s the thing: You will recognize an iPhone. But will you recognize a Google Nexus One? A Motorola Droid? A Samsung Moment? An HTC Hero? A Sony Xperia X10? A Dell Aero?

      And yet, those are selling–in smaller amounts than the iPhone, sure. But add them all up and it’s a pretty hefty chunk.

      I’ve said it before: In 2011, the iPhone will be most the popular smartphone. In 2011, Android will be the most popular smartphone OS.

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      1. Peter, Android is growing precisely because it’s on 3 major networks and the iPhone is on one. If the iPhone was on all 4 from the start, Android wouldn’t even be in third place.

        Now if Verizon gets the iPhone, Android is certainly going to lose a lot of momentum, as people won’t have to go for the “second best” choice anymore. It won’t kill Android, but it’s going to be a very hard sell to get average people to buy a Droid when an iPhone is right next to it. One area Android still hasn’t come close to iPhone is the iPod experience. The Android media player blows.

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    3. AdMob is upfront about their data, traffic derived from AdMob ads on web pages and in apps. It’s not market share data for mobile phones. However, it does show a trend, and Android is trending in AdMob ad share. I’d bet that trend roughly coincides with Android sales, too.

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    4. I see a lot of people using Android… Think about how many areas were under-served by the ATT network that now have Droids. Widgets ping data constantly–likely resulting in more use per phone. I think the growth curve of the Android looks totally plausible. VZW users have been suffering RIM-style for years, coveting iPhones–now they have an real browse-able smartphone option–not to mention the new offerings from TMO and Sprint. Also, folk tend to use their new shiny phones more in the 1st months of ownership, before settling into normal patterns.

      Fudging is a big claim.

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  6. I heard from an anonymous source that Verizon is essentially taking orders from Apple about the iPhone Apple is will to produce for Verizon and preparing its network accordingly. The word on that street is that Verizon’s 3G CDMA network won’t ever take an iPhone but next year’s nationwide launch of its 4G GSM-compatible network will.

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    1. Just because LTE is “GSM compatible” doesn’t mean anyone will be using GSM voice over Verizon’s network. Even if they magically lit up the entire US tomorrow with their 4G offering, Verizon will be using CDMA for voice traffic for years.

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      1. True dat, I don’t understand why people think that the 4G transition is going to be some flipping of a switch. It’s took billions of dollars and years to build the current 3G offerings available from Verizon and AT&T, and its going to take the same to properly convert to 4G. If Verizon gets the iPhone anytime in the next couple of years, it will probably have parts or hardware on it that have been designed to work specifically on Verizon’s networks.

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  7. Apple will sell more iPhones. Google will have more Androids. What the iPhone to Verizon really means is that rather than watching Palm go through a long, pitiful death, this will put it out of its misery quickly.

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  8. Meh. How many times have we heard this before since 2007?

    If I had a nickel for every time some insider or analyst predicted that the iPhone would come to Verizon, well, you know.

    More recent was the equally force rumor that Verizon would carry the iPad; remember that one?

    Seriously, I’ll believe it when I see Steve Jobs and the Verizon CEO on stage together.

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  9. Uh, that’d be ‘false rumor’ not ‘force’, but you get the idea.

    Damn fingers.

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  10. Om, what do you think about Sprint getting this phone too? That’s potentially another market of 50+ million subscribers! Where’s the love for Sprint?

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