40 Comments

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

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  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.

  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.

  3. Ashley Grayson Tuesday, March 30, 2010

    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.

    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).

    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.

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

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

  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?

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

      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?

  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?

    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 ;-)

    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.

      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.

    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.

    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.

  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.

    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.

      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.

  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.

  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.

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

    Damn fingers.

  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?

  11. Mark McCormick Tuesday, March 30, 2010

    Thank God Apple is getting rid of AT&T! AT&T is the worst company I have ever come in contact with!

  12. well hopefully that does not mean I cant buy the new iphone, casue I’m currently with att and hate the service. To have the iphone on the verizon network will be perfect. the best cell phone with the best service provider will give apple a monopoly on the cell phone industry. I just dont want verizon making a exclusive phone for verizon. i just cant take it!!!!!

  13. Am I having trouble counting to 3 or is the author?

    1. Well the author didn’t make it really clear. I think his 1st point was: the android is about to take over in network usage so they need to add the iPhone to Verizon in order to keep the iPhone the most popular phone. His 2nd point: Apple could double it’s subscribers or possible more, but the Android will suffer as a result which could be why the iPhone hasn’t gone to Verizon yet. His 3rd point: the people who received the information about the Verizon iPhone at WSJ might be legitimate. He says that Apple has been known to release information early such as with the iPad.

      I think the reason we haven’t seen the iPhone come to Verizon yet either is because of the Android, Storm and other RIM phones, and HTC phones…Verizon is going to burn bridges with all of these companies if the iPhone comes to Verizon. The reason? Everyone (or most) will ditch their Droids, Storms, Heros, Palm phones, etc.. to get the iPhone. Verizon will probably gain more customers, but maybe not as much as some think. It might be more of current Verizon customers just swapping phones.

  14. Mustansir Golawala Wednesday, March 31, 2010

    Apple needs to (and most likely will) release the iPhone not just to Verizon but to all providers – I think Steve Jobs realizes this.

    Back when there were no viable alternatives to the iPhone, it made good sense to have an exclusive partnership with AT&T. Now that Android and HTC have gotten to the point where they are viable alternatives, being exclusive to AT&T only hurts Apple.

    Before a consumer would have been willing to switch from one network to another, simply to get the iPhone. Now, the consumer has a choice of staying with the same network and getting a somewhat similarly capable smart phone. A lot more people are going to choose to stay with their network than before.

    As more people make the decision to stay with the same network, they go with Android phones instead. With more Android phone users out there, more developers make apps for the Android platform. You see where this is going…

    Apple’s best bet really is to become available on as many networks as possible.

  15. I don’t understand…if Blackberry can sell phones to AT&T and Verizon…why can’t Apple sell phones to both. They could just change the iPhone slightly – put a different camera on it, change the shape, size, weight etc. Then just give it a different name and sell it to Verizon. Samsung, LG, etc… everyone does this as well. They make the same phone for both carriers and just give it a slightly different name.

    If Verizon has 87M customers and AT&T has 85M…why would Apple NOT want to offer it (again – Verizon was the first one to be offered the iPhone, bet they’re kicking themselves now) to Verizon. They’re going to double their market. Some people who are with Verizon, like myself, refuse to leave to go to AT&T just to get the iPhone. The Verizon network is too superior to leave. It just doesn’t make any sense at all…if someone asked me, hey if you sell to group A, you’ll make X amount of money, but if you sell it to group A AND B, you’ll make 2X amount of money. It seems like most intelligent people would want to market their product to as many people as possible…not a very limited group. Apple and Verizon really need to come to terms on a phone and bypass the stupid exclusivity contract with AT&T. There’s a loophole with everything.

  16. This is a horrible article. The title says “three reasons,” but the article simply goes on about market share and doesn’t mention “three reasons” at all. The graph is misinterpreted in that it’s clearly measuring “iPhone OS” but then Charles goes on to say that maybe it doesn’t include the iPod touch? If you are going to include the graph at all, it’s probably a good idea to find out what’s included in it for starters. In fact all other sites I’ve seen that use that graph say what the graph says, which is that it’s about “iPhone OS” (and thus includes the iPod touch).

    I’m not disagreeing necessarily with the conclusion. Market share is the very first actual reason that Apple would have to make a CDMA phone. In fact it’s pretty much the only valid reason there is at all (if these market-share numbers are actually being interpreted correctly that is).

    But Jeez, this is just the worst written piece of psuedo-journalism I’ve seen in a while.

  17. Why is it always that a CDMA iPhone is going straight to Verizon. What about other CDMA providers such as sprint? They hold the lowest all data plan costs of all of the three. Why not open the iPhone as an international phone GSM/CDMA and let the user decide whom to pair with. Afterall Apple is not in the business for data networks. YET !!

    1. I wish US Cellular would negotiate something with Apple for the Iphone, their service was better than Verizon and At&T. I have at&t now, its horrible, horrible, horrible, horrible and terrible, terrible, terrible. They give you extremely low minutes for their phone packages, and charge a huge increase for their next upwards packages. I had three different conversations with AT&T in two days, long distance charges, daytime minute charges, and then trying to upgrade my plan. BTW, whoever designed their menu on the 611 needs to be fired. The first menu gives you a choice for the operator press 0, did that, then oh by the way you can do this, find out that, see whats new, and press 0 for an operator. It did that THREE TIMES !!! I WANTED TO THROW MY IPHONE OUT THE WINDOW AT MY NEXT DOOR NEIGHBORS CAR, talk about frustration. NEVER NEVER NEVER NEVER NEVER NEVER, oh forgot the commas … NEVER, NEVER, NEVER, NEVER and EVER switch to AT&T. Worst than my Verizon debacle back 5 years ago. Why cant a carrier pull their big fat head out of their big fat you know what and set the price for a flat fee across the board. $55.00 and they’d have a customer for LIFE. But no their greedy, stupid, disorganized, I could run their company better than they could …. morons. I’m just in total disbelief. I’m gonna shove that termination fee up their you know what and say hello to my new/old friends at US Cellular. and then jailbreak my iphone down the road and go skypin.

  18. The Power Geeks #44 – ThePowerGeeks.com Wednesday, March 31, 2010

    [...] Rumor: Verizon to get IPhone (iKDR) [...]

  19. Rumor Has It: iPad to Launch Worldwide On April 24 Wednesday, March 31, 2010

    [...] 3 Reasons Why the Verizon iPhone Rumor Is True Mac Love [...]

  20. I would love to have a i-phone….but in my office and home AT&T gets NO reception at all…the only consistent service has been with Verizon. It keeps the employees off their phones during work hours but really why can’t Apple just get this thing going! Until then I have to be content with the i-touch and a droid that works everywhere.

  21. I know many people here in SC with a iphone and it is worthless to them because they never have a signal, and when their lucky enough to have a signal it usually ends up a dropped call. So I ask you, what good are all these features if you have no signal to use them?
    This is the reason I left AT&T and went to Verizon two years ago and I haven’t had any issues. If Verizon gets the iphone I will be the first to stand in line for one. Until then I will do without.

  22. iwannaiphone Friday, July 2, 2010

    I am a mom with a family plan of 5 phones & mifi all on Verizon, as soon as my contract is up we’re going with AT&T so we can all get iphones…that is unless Verizon gets the ipone before the end of our contract….10 months to go Apple/Verizon!!!

    1. Oh, and I used to have AT&T in Menlo Park, CA (Bay Area) home of AT&T and I remember when they couldn’t even keep my calls from dropping….they would drop while driving down Middlefield in Atherton to Palo Alto (all flat land).. oh also if I drove past a tree!!! how sad.

  23. is the Iphone really coming to verizon

  24. FUCK APPLE! HOORAH TO VERIZON!
    VERIZON PROMISES NO 750 DOLLAR DEPOSITE TO GET THEIR IPHONE
    ATT WILL STILL CONTINUE IT.

    DOWN WITH ATT AND THEY’RE GREED AND HOORAH TO VERIZON FOR BEING THE BETTER OF THE TWO!

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