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2 Reasons Today’s Verizon iPhone Rumor Are Likely True

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Verizon Wireless (s vz) will reportedly offer Apple’s iPhone in January of 2011, after AT&T’s (s t) exclusivity deal ends, writes Bloomberg, which cites two unnamed people familiar with the plans. Verizon has so far been unable to offer Apple’s popular smartphone, despite pent-up demand among its 92 million subscribers. But although there have been numerous Verizon iPhone rumors in the past — many we skipped over — this particular one rings true, for two reasons.

AT&T has locked in a lot of users in the most recent iPhone upgrade cycle. AT&T knows when its exclusive iPhone deal ends with Apple (s aapl), even if others don’t. So the carrier will likely plan accordingly for any churn and lost customers that would defect for an iPhone on Verizon’s network after its exclusivity ends. If Verizon is getting the iPhone in 2011, it would make sense for AT&T to lock in as many iPhone 4 customers as possible beforehand. And AT&T was indeed generous in advancing the iPhone 4 eligibility dates for current iPhone 3GS customers — that offer locked new iPhone 4 owners in for an additional two years under a newly raised termination fee.

Apple to offer big upgrades and 4G is a big upgrade. If Verizon gets an iPhone in January, it’s likely to be a 3G device using Verizon’s CDMA network, despite the fact that Verizon is planning to launch LTE service in some markets before the end of this year. I’d expect a Verizon iPhone with EVDO capability in January because Verizon will still need two more years to fully extend LTE to its entire network. And that gives Apple the opportunity to offer an upgraded iPhone with LTE service later in 2011 — an upgrade strategy that Apple has followed in the past by offering a device that has room for improvements in the near future.

Verizon has responded to our request for comment by saying via email, “We don’t comment on rumors and speculation.” Readers, what do you think?

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67 Responses to “2 Reasons Today’s Verizon iPhone Rumor Are Likely True”

  1. Saw the interview on Bloomberg which the latest “report” (rumor) was based on. An INVESTOR speculated that Verizon will LIKELY carry an iphone early 2011. Bloomberg blew his speculation out of proportion and caused a new rumor overnight (once AGAIN). Leave it to Bloomberg to take a comment and make news sensation. I’d actually like to believe the rumor (since I AM a VERIZON subscriber), however the investor had no affiliation with EITHER phone company OR Apple. His word is not substantial enough for me.

  2. Another reason the verizon iphone rumor is likely true, is that AT&T has finally begun to talk about selling other iPhone-like smartphones, such as Android. CEO Stephenson has been mentioning Android, instead of iPhone, at every conference or talk he goes to.

  3. I think Apple is at the point of getting as many unit into the market as possible. I think we need to take the app store into account into all these decisions as well. How many more billion of apps could apple sell?

  4. I’ve been saying the same thing regarding the liberal upgrade allowances, it seems obvious.

    I have to say that I am tempted, but AT&T service here in Fairfield County isn’t bad. The rest of my family is on VZ and my contract expires around Father’s Day 2011. Might be perfect timing for me?

  5. Not so long ago AT&T would’ve been the wild card, doing whatever it took to keep their market-share-expanding-partner Apple and phone exclusive. As it turns out Google is the wild card. A couple of years ago who could have predicted the ascendancy of Andriod. The rise of Android works in a couple of ways to validate the Verizon rumor:

    1. Apple perceives Android as it’s only serious completion. Apple knows it’s biggest weakness is being on only one carrier. Right now there’s nothing AT&T can offer Apple to continue the exclusivity arrangement.

    2. Since it’s introduction, the iPhone has been central to AT&T’s strategy of increasing market share. Going forward, AT&T probably won’t rely as heavily on the iPhone as it introduces Android devices to attract the Google faithful.

    As for the reasons the rumor might not be true:

    1. The Contract. We really don’t know what the contract says about the exclusivity arrangement between AT&T and Apple, but certainly it would contain outs for both parties. It’s also important to remember that AT&T will carry the iPhone after exclusivity ends, so they’ll want to continue to keep Apple happy thought the deal probably won’t be as sweet for Steve.

    2. Verizon. Apple originally offered the iPhone to Verizon, but backed out when Verizon started making demands common to carriers at the time, including Verizon branding. If anything, Apple and the iPhone have changed the rules of the game, reducing the control that carriers have over handset amenities. This time around Verizon will cede control of the iPhone much like AT&T has.

    3. GSM vs. CDMA. Not really an issue. All the major chipset manufacturers: TI, Qualcomm, Samsung, etc., provide modular chipsets that allow handsets to be quickly adapted to a particular carrier’s assigned bands and transmission technologies. My guess is that a CDMA iPhone 4 could be ready in a month or less.

    From what I can see, there’s good reason’s for the rumor to be true and no real obstacles that would get in the way. Full speed ahead!

  6. As far as my rudimentary math skills go, with the Five-year exclusive pretty much confirmed, I wouldn’t expect any additional carriers to be added until 2012, so I’m not holding my breath.

    The burden of proof rests on the rumormongers.

  7. One problem that you and pretty much everyone else is missing. The Apple and ATT exclusivity contract is 5 years and started in 2007. That means it’ll end in 2012, bot 2012. What makes you think that this rumor is any different than the ones that we’ve heard every single year since 2007?

    • And how do you know that? Because USAToday reported it in early 2007. But in mid-2008, the same USAToday reporter said the agreement was modified to a 3-year exclusive due to Apple switching to a subsidized phone; 3-years would include the 2008, 2009, and 2010 iPhones.

      Engadget subsequently recapped all of this earlier this year, but most other blogs/websites chose to mention only the original 5-year pact and skip the rest. Dumb idiots.

  8. A couple of Apple PR folks thought how to spoil the Droid X party, lets just spread a rumour, but seriously iPhone has a limited audience, and they are all on AT&T, so how gives a rats ass?

    • MacDaddy

      Wow, you are such a dumba$$…almost HALF of Verizon’s 92Million users want an iPhone, and God know’s how many more out in the world that are NOT on AT&T. Open your eyes to the world. You might learn something…

  9. Honestly, I’ve been hearing the iPhone ending up on Verizon since the first one was released. I’m past the point of caring – instead of chasing after a device only to dislike it because of an unreliable network, I’d rather stick with a network that works and have a phone that may or may not do less.

  10. Yeah, this is specious logic. Sure, AT&T is locking iphone customers in but verizon is also bumping up the eligibility for its customers to get the droid x next month. Why would it lock potentially millions of users in to a new contract and hardware when an iphone is heading to big red in six months?

    The report is the same as the millions of others that cmd before it, as its spurred by cowardly unnamed sources.

  11. Scotty

    iOS doesn’t support CDMA’s lack of simultaneous voice and data. The only way you’ll see iOS on Verizon is with CDMA using Voice Over Revision A or LTE. Of those two choices LTE is the most likely because at&t and the rest of the planet are busy rolling out LTE networks. People are presently betting heavily against a Jan 2011 iOS roll out of LTE due to battery issues with the initial LTE chipsets. But to me, that just means time for PA Micro to flex their muscles (and boy, we sure haven’t heard much from them since Apple bought them, what have they been busy doing???) iOS going LTE with it’s own battery conserving LTE solution would give Apple a HUGE edge in the smartphone wars.

  12. Comcastic

    You people have not been paying attention to Steve. He has said repeatedly that Apple looks to “emerging” technologies to hitch its wagon to. That would clearly mean GSM-based LTE (Long Term Evolution) and not CDMA. Look forward to seeing the iPhone 4G edition for Verizon to be released 1/2011 and used heavily by Verizon Field Engineers for internal stress testing of their GSM/LTE network rollout nationwide. Steve has them covered. Also the same tech in this phone can be leveraged for ATT LTE rollout to follow Big Reds. It all makes perfect sense.

    Note: This new improved version of the 4 will come with free bumper case for all you death grip monkeys.

  13. With all this talk about iPhone 4 vs. Android, I think I for one am looking out for the launch of Win Phone 7.

    I’m a mac guy, love my 2G iPhone (t-mobile!), etc., but I walked into a mac store, played a little with the iPhone 4, and walked away unimpressed. Don’t get me wrong, it’s the best phone out right now, but the OS isn’t as progressive as it once was.

    I think with WP7 we’ll see a major shift into the cloud on phones (ala the kin), and aggregation instead of apps. You don’t need multi-apping when everything you need is aggregated into hubs.

    If it’s done well, I think WP7 could be a major game changer, and will probably make it’s way on to every carrier. If MS doesn’t drop the ball on the OS, or doesn’t price itself out of competition, I think it is a better contender than Android…

  14. These are two reasons the rumor may be true, but why wouldn’t Sprint be an option? They already have a 4G network and would be a much better fit for the iPhone as a company in my opinion. Good post.

    Apple has already started production on cdma iPhones, so the thought some of you have as to “why would they abandon” what they’ve already done? Simple, more money. And they’re not banding anyyhing. Only adding to it.

    • GoodThings2Life

      People are going to tell you it’s because Sprint is “small potatoes” and is hemorrhaging customers hand over fist, but the truth is that they have a great network, and their support has become much better in recent years. Also, having the iPhone would actually attract customers back to Sprint in much the same way the EVO has interested people (where the Pre tried and failed).

  15. austin mcdonnell

    Verizon is a very conservative company. Does anyone really think Verizon is going to let the tail wag the dog as AT&T has done with the Apple 3G iPhone on their current distressed (GSM footprint) national network?
    Spectrum Caps… Does anyone think Apple wants a network to constrain the use and capabilities of its “GOD Machine”?
    Verizon running CDMA on two spectrum bands inside their network; therefore, likely more complicated to design for 2 CDMA Bands plus an LTE band. Much less complicated to design for one CDMA band and one 4G band today providing proof that maybe it is not such a bad thing for the tail to wag the network and that the visionaries outside the loop of the network carriers deserve a seat at the network design table rather then their current place/chair against the wall.
    What network would be putty in Apples hands and allow Apple products to go full throttle now?
    Our money is not on Verizon. Our moneys on the carrier that can let the the dogs loose in prime cities today; its time to see what this iPhone puppy can do. Its time for Apple to have a miniture bet the company vision thing and perhaps cement their seat at future network design tables.
    We believe Apples next iteration of the iPhone is all about showing the capabilities of their particular vision and that cannot be done with spectrum caps.
    For Apple, Sprint is really the “now” network and Clear Wimax is the bet.

    • How is Sprint and Wimax the best when AT&T beat the Sprint 4G data speeds with its 3G network speeds in all but one market? And by the way, that one market only beat AT&T by about 200kb/sec. Not to mention the one market where Sprint’s 3G network had higher speeds than their 4G network. Sprint is a dying company and has no leg left to stand on if you ask me, or any other person that has a clear business sense.

      I would love to see a Verizon iPhone just to watch their network crash and burn. Their 3G network caps out at 1.3mb/sec where AT&T caps out at 8.0mb/sec soon to be 14mb/sec. Essentially the “G’s” don’t mean anything since AT&T is already capable of achieving “4G” speeds on a “3G” network. When they actually lay the proper pipe to the towers to fully unlock them so that constant speeds of 4mb/sec to 8mb/sec, like they already have in some of those “prime cities”, there will be no stopping them!

      • austin mcdonnell

        …clear business sense. We recommend deep thought on why Sprint is not dead yet; and further contemplation as to why Clear Wimax has been “betamaxed” by a technology that is not even availible today that will be running on networks with severe spectrum constraints in all major cities when considering the here today killer app…video. Those carriers simply do not have the robust spectum portfolio to carry off 4G. FCC racing to get more spectrum to market, which is at least 2-4 years out. Harbinger making an end run to detach spectrum from FCC Satellite commitment to become a pure spectrum play for 4G LTE. Brilliant stategy by Falcone to use FCC rules pertaining to the privatization of SkyTerra to panic legacy carrier into resetting value of spectrum… which is exactly what those carriers did when they had their legal teams race into the FCC crying foul! In the past, those legacy carriers had assigned very little value to this spectrum.
        AT&T will continue to struggle with Apple 3G due to time to market of their UMTS 1900 MHz Network. Going from an 900MHz footprint to a 1900MHz footprint ain’t so easy. The infill zoning is a killer today and likely will not be completed by AT&T for at least another year. So no ubiquitious 3G footprint for AT&T for another year; therefore, no LTE for 2 years…. LTE is evolution of UMTS which is evolution of GSM; therefore, LTE will work with UMTS footprint with no additional sites, just an overlay; yet…without additional spectrum to carry off the increasing demand for video…Houston, we have a problem. We believe Apple has the ability to work around their contract with AT&T. At least AT&T is using evolutionary steps to get to 4G. That is UMTS & LTE are full blooded members of the GSM Network family. The same cannot be said for Verizon.
        For Verizon to get to 4G Verizon has had to deploy an entirely new network, soup to nuts, because UMTS & LTE are not part of the CDMA Network family. So with two different bands of CDMA and the addition of UMTS & LTE Networks the Verizon Network would seem to be pretty darn complicated to design tools for. Then there is the matter of network control. Sorry, just cannot see Verizon setting themselves up to be viewed as an inferior network, AT&T would bury them.
        That leaves Sprint/Clearwire. Since LTE is using the same air interface, OFMDA, as Wimax it should be only be a matter of a software upgrade should Wimax go down for the count two years from now. Sprint/Clearwire needs Apple and Apple needs Sprint/Clearwire since their technology has surpassed the legacy carrier networks. Apple has unleashed the Genie and the consumers have spoken.
        Go Sprint/Clearwire, take it to the house…ah Femtocells…cable companies.

  16. Panamajack

    For me it’s just the timing. Why not roll this out in 2007 when CDMA still had more legs? Other markets like Canada responded by rolling out iPhone compatible networks. Bell & Telus used to be CDMA only, now they provide some UTMS bands as part of their eventual LTE rollout, allowing all carriers now to carry the iPhone. The popularity of CDMA in Japan & Korea had analysts saying it was merely a matter of time before Apple provided a CDMA model – they didn’t (although it did take until 2009 before Korea got it.)

    Why now, with LTE so close?

    • “Why now, with LTE so close?”

      One word: Android

      As monopolistic and conservative as Jobs is, he’d rather bite the bullet and produce CDMA hardware than for a second see the competition overtake him. Remember, Android sales/units will be biting hard into iPhone market share by the time 2011 hits.

      • bradchristian99

        YES… I would be interested in seeing some speculation into how an iPhone on Verizon and even all 4 major US carriers would affect Android. I think it would push it into the fringes.

      • GoodThings2Life

        Yeah, interesting… is Android popular because it’s the only option on other carriers, or because it’s truly a contender to challenge the iPhone and the fact it’s available on all carriers is just one of many perks?

        I’m betting the latter.

      • Barnes Wintworth IV

        Apple has never been about marketshare. They have always been about Quality (not quantity). They know if they make the best then the quality will take care of the rest. This is why their products can command a premium price because the customer will pay for superior product. This has been Apple trade mark forever, they just do not make any junk.

        As an example, even their bumper case for the 4 is of such high precision and quality that they can command $29 per and receive it wholeheartedly. No other company in the world put so much design effort in their products. End Result is 40+ billion in cash and no debts make Apple the best at what they do. Apple will be happy to give marketshare to Android as long as their profits continue to surge year after year while nobody makes money from Android.

        The smart money will always follow Apple regardless of the popularity of Android that is just how it is.

      • Dtflick

        I have to agree with Brad. I know i’m going to start sone sh!t withthis comment, and I certainly don’t mean to, but I think androids popularity is due mainly to it’s widespread availabiliy. I think most peple avoid the iPhone because of the carrier it’s tied to, not the hardware itself. The iPhone was a game changer. It wasnt the first to the party with a lot of what it does, but it does it better than pretty much any other mobile device. It continues to be so successful because apple’s ability to do what it does so well. I’m not bashing any other manufacturer, but no one can compete with the likes of apple, at least not at this stage of the game. I love the competition and enjoy the progress that comes from it, but if iPhone moves to other carriers, especially verizon, android will be a fringe device. People want usability and ease of use, and iPhone delivers on that. The few on the fringe of technology will enjoy the access and openness of android, but they fall in the vast majority and those looking for all-in-one fully integrated devices won’t find a better product than the iPhone.

  17. Rorison Meadows

    2 Reasons Today’s Verizon iPhone Rumor Are Not Likely True:

    ONE BIG FAT F**KING LAWSUIT from AT&T on Steve Job’s desk for violation of exclusivity.

    Steve Jobs, like everything else, like’s to control his provider. He cannot control Big Red. He can control AT&T. Of course, hopefully, he’ll die soon, and then Apple will be a reasonable company once again.

    • GoodThings2Life

      Umm what world do you live on that you think Jobs is “controlling” AT&T? Have you seen the screw ups they’ve made in recent years and gotten away with? If that’s “control” I’d hate to see Jobs raise children…

      • Rorison Meadows

        “I want you to stand behind Apple no matter what. I want our iPhone to be the top phone in your lineup. I also want limited advertising for all other phones in your lineup.”


    • AT&T has been advertising all its other phones all along – they never advertised for iPhone on TV. So not sure what you’re talking about.

  18. ol' yeller

    well prior to launch, i think the exact words jobs used in referring to verizon was “a giant orifice” and that was the kindest thing said. he compared them to AOL and their walled garden and predicted that some day they would pull their head out and realize that VCAST was a giant @()#*@)# of @#$(. remember this was all prior to anyone knowing for sure what the iphone would do to people’s expectations of a smartphone.

    have to give the man credit for correctly assessing all this without even being in the business at the time.

    agree that putting out a CDMA phone is a hassle, but spending an incremental $5-10M (high estimate) to design and test a phone to gain 5m in year one hardware sales + $17/mo x 6mo = $500M+$600M=$1.1B year one in revenue seems like a pretty reasonable return on engineering dollars to me. if you offered me that investment, i’d make it.

  19. Panamajack

    Apple has put out one model iPhone per/year for the entire global market for 4 years. Why would they now abandon this strategy and release a phone model with an antiquated standard like CDMA at this late point, with all the added royalties, technical support, etc., just for the benefit of a single American carrier for two-years? Apple will wait for Verizon’s LTE rollout, maybe going to T-Mobile in the meantime.

    • Stark Ravin

      On the nose, @Panamajack. Apple has made a technology decision: go with 3GPP/GSM. They are not about to implement a phone radio based on the dying CDMA standard, anymore they are investing in Flash (which they claim is also a dying technology). If Apple does do an iPhone on Verizon’s network, it will be 3GPP LTE in some way, shape or form. If it leverages the CDMA network in anyway, I’d be surprised.

      I also agree that a T-Mobile iPhone 4 is on the horizon; I’ll bet before the holidays.

      • “If it leverages the CDMA network in anyway, I’d be surprised.”

        I’d say it is likely there will be a fallback mode to CDMA, no matter what.

      • Have to agree with Yacko. Because the demand, market share, and margins are there: that’s why Apple may choose to implement on an old CDMA network while waiting for Verizon to upgrade to its 4G in 2011-2012. That’s my hope, anyway.

    • Why would this be a benefit to one carrier only? The CDMA Dev Group reports 522m CDMA subscribers worldwide still. Yes, GSM is by far the more used technology, but a CDMA iPhone wouldn’t necessarily preclude other larger carriers benefitting such as China Telecom.

      Bear in mind that a recent survey showed over 50% of VZ customers wanting the iPhone. Let’s assume that if offered the opportunity, half of those actually buy the device. That’s 25% of 93 million customers or roughly 23m iPhone sales. Apple’s best quarter for worldwide iPhone sales is 8.75m devices — so from that perspective, it’s leaving a fair amount of money on the table without a Verizon iPhone.

      Your logic is sound – I’m not arguing that because I’ve said the same in the past. But there’s another side to look at = pent up demand for a very large carrier, with the opportunity to partner with a few other carriers yet.

      • Autoexec.bat

        As a Sprint shareholder, what I am really hoping for is that Sprint will coyly notify CDMA iPhone buyers that iPhones can be activated for use on the Sprint network. Up until now, Sprint’s policy has been not to activate anything that does not have a Sprint logo on it but I could certainly see that changing.

        T-Mobile has sort of done this by saying that iPhones are not officially supported. Of course, T-Mobile iPhones are forced to EDGE, but I think a VZW iPhone carried over to Sprint would have fully functioning 3G as long as it could be provisioned, right?

      • Greg Patterson

        You are forgetting that Verizon will never agree to the royalties and control that AT&T has agreed to and thus you will not have a Verizon iPhone.

      • Matt Liotta

        Both of you are correct in your logic, but missing the bigger opportunity. Given at&t’s plans for an LTE rollout there is time for a Verizon LTE iPhone EXCLUSIVE.

        Regardless, you won’t see an iPhone on Verizon’s network without LTE.

    • Apple doesn’t release antiquated products? Did its first phone have Bluetooth? Copy and paste? Did that stop the masses from snatching them up?

      Here’s the only equation at issue:

      iPhone + Verizon = $$$$$$, especially when it doesn’t have 4G and Apple can then release another iPhone in 6 months with 4G and make everyone buy a new one again. Are you not familiar with Apple’s sales strategy? Now they’ll be able to do it to two carrier bases.

    • Apple would be making a serious mistake if they don’t release a CDMA phone. Not only are they leaving a serious amount of cash on the table, they are leaving room for the Android to grow and compete. Many of the Android users would be iPhone users given the chance. I think I woul

  20. Justin

    I think that adding a “G” to the “iPhone 4” moniker would be a no-brainer for if/when the phone goes on Sprint’s WiMax. Like the 3GS. And this time the name would make sense.

  21. I believe Verizon stated that LTE will be used for data and CDMA will be used for voice in the near term, so “it’s likely to be a 3G device using Verizon’s CDMA network” seems correct.