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JDay
05-30-2010, 2:50 PM
http://money.cnn.com/2010/05/28/technology/verizon_iphone/index.htm?source=cnn_bin&hpt=Sbin


NEW YORK (CNNMoney.com) -- It's that time of year again: The weather is getting warmer, Apple's annual Worldwide Developers Conference is just around the corner, and rumors about the iPhone coming to Verizon are sprouting up.

Don't believe it, Verizon fans. It's unlikely that Steve Jobs will announce a Verizon tie-up when he gets on stage at the WWDC event on June 7.

The rumors have been swirling around for years because an Apple-Verizon partnership seems to make sense for both parties.

The top reason consumers who are in the market for an iPhone decide to pass is AT&T's 3G network problems, which are notorious in New York and San Francisco, according to a CFI Group study. Meanwhile, Verizon (VZ, Fortune 500) has built up its reputation as the "most reliable network." Also, Verizon's 93 million wireless customers would present a huge opportunity for Apple to grow its customer base.

Yet there are some fundamental reasons why a deal isn't imminent.
Different networks

Verizon's network runs on a wireless standard called CDMA, which is incompatible with AT&T's GSM network. It's not impossible to offer phones on both networks -- Research in Motion (RIMM) sells BlackBerry phones on every major U.S. network. But it wouldn't necessarily make economic sense for Apple.

For one, Apple (AAPL, Fortune 500) has proudly advertised that consumers can make calls and surf the Web simultaneously on the iPhone, but Verizon's CDMA network can't support that feature.
0:00 /1:02Apple cleaning out older iPhones

Secondly, Verizon is set to roll out its 4G network later this year, and AT&T will unveil its 4G network in 2011. Those networks will be on a new universal, global standard called LTE, making a 4G/LTE iPhone much more cost-effective for Apple and easier to sell around the world. That would make next year or even 2012 a more likely timeframe for debuting a Verizon iPhone.

And suppliers haven't given any indication that Apple is building a CDMA phone, according to Jagdish Rebello, principal analyst of communication systems at iSuppli.
AT&T's exclusivity contract

Apple has a five-year exclusivity deal with AT&T (T, Fortune 500), according to court documents, making it unlikely that the iPhone could come to Verizon before 2012.

Many analysts said nothing is set in stone and speculated that the terms could have been renegotiated.

"No one has a good handle on how long that exclusivity deal runs, but those contracts usually last 90 days to six months," said Josh King, general counsel at Avvo.com and former senior corporate development executive at AT&T Wireless.

But one big indication that AT&T's contract will continue for a while is its sweet 3G pricing deal for the iPad.

AT&T offers unlimited 3G access for the iPad on a contract-free basis for an average of about $22 a month. Because those sales only account for 15% of AT&T's data revenue, according to data tracker Trefis, it may be part of a bigger strategy.

"There is speculation that AT&T is offering attractively priced 3G data plans ... as part of a broader deal with Apple to maintain iPhone exclusivity for longer than the original agreement," Trefis said in a recent analyst note.

"AT&T is our exclusive partner in the U.S. and we're very happy with that," said an Apple spokeswoman but she would not comment on Apple's plans to sell the iPhone on other carriers.
Verizon might not want the iPhone

When Apple was searching for a network to carry its iPhone in 2007, Verizon was widely reported to have balked at Apple's demands to take a share of the company's revenue.

Verizon said it would be able to handle the iPhone on its network, but wouldn't comment on its interest in carrying the iPhone specifically.

"The Verizon Wireless network is optimized for maximum efficiencies and ... we can mange the growth," a Verizon spokeswoman said. "We pride ourselves on having an array of smart phones on several different operating systems."

Recently, Verizon appears to be shrugging off the iPhone by going all-in with Google (GOOG, Fortune 500). Verizon's past two flagship phones have been Google Android-based phones, and the company is working with Google to launch a tablet to compete with Apple's iPad.

Verizon also couldn't have made Apple too happy after launching a scathing "iDon't, Droid Does" campaign, in which the company went after all of the iPhone's deficiencies. And in a separate campaign, Verizon poked fun at Apple's "there's an app for that" slogan when it went after AT&T's 3G network with its "there's a map for that" ad.

"There's a lot for Verizon to consider, including revenue sharing and how much the iPhone would fit in with what the company is doing now," said Ramon Lamas, mobile device analyst at IDC. "But right now, they're all about Google."

Bug Splat
05-30-2010, 8:48 PM
I read that the other day and I would agree. Verizon is putting in a lot of money behind Android based phones. Many ads bashing the lack of features the iphone is missing. Personally I think the iphone's best days are behind it. Even with the newer version coming out soon I highly doubt it will be enough to hold the title of heavy weight champ. Lets also remember that Apple burned a lot of bridges with their developers all because Jobs had a hissy-fit toward Adobe. Many of them are now writing apps for the Android.

Android is clearly a better OS with features far beyond what the current iphone could dream of doing and I highly doubt the new iphone will be a game changer. With Android 2.2 just around the bend it puts Android well beyond the reach of the iphone. Apple is playing catch up now and Verizon would be stupid to adopt a phone that is on its way off the thrown.

Today I had coffee with the most diehard Apple fan I know. I asked him if he was going to get the new iphone and he shrugged it off and said apples glory days were over and Android offered more features, more options and more coverage through Verizon. Apple will always have its fans and they will buy anything with a fruit on it but for the undecided voters the iphone is no longer looked as the best smartphone.

ocabj
05-30-2010, 9:13 PM
The funny thing about Verizon is for some reason, their coverage at my campus (UCR) is garbage. One of the students that used to work for me graduated a few years back and was working as a tech for Verizon and actually came back to campus to do site surveys and nothing ever came of it. No improved coverage whatsoever. Verizon is fine outside the general UCR campus area, but just not on campus. In my office, anyone with Verizon mobile phones have trouble receiving calls.

As far as AT&T, my only gripe is the tethering fiasco. Other than that, I've never had problems with my mobile phone coverage. My first mobile phone was PacBell PCS in 1997, which became Cingular, and then became AT&T. Had the same number since 2000.

But I'm in Riverside. If I lived in SF or NY, then I'd probably have a far worse opinion of AT&T.

JDay
05-31-2010, 6:55 PM
My first mobile phone was PacBell PCS in 1997, which became Cingular, and then became AT&T. Had the same number since 2000.

You can change carriers and keep your number.

ChrisTKHarris
05-31-2010, 7:01 PM
That's okay, I just bought a Droid Incredible. :)

Nessal
05-31-2010, 7:04 PM
Ive been using my iphone 3g for almost 2 years now and i thought long and hard about getting the iphone 4g when it comee out. I NEVER had any issues with att reception. The 3g speed is great and i cant even remember the last time that i got no reception. So i have no gripes about their network. But the only reason that i feel like moving the 3 iphones on my plan to verizon is because of the andriod platform. I feel it is a better os overall abd offer functions like tethering that the iphone does not provide.

ChrisTKHarris
05-31-2010, 7:07 PM
Ive been using my iphone 3g for almost 2 years now and i thought long and hard about getting the iphone 4g when it comee out. I NEVER had any issues with att reception. The 3g speed is great and i cant even remember the last time that i got no reception. So i have no gripes about their network. But the only reason that i feel like moving the 3 iphones on my plan to verizon is because of the andriod platform. I feel it is a better os overall abd offer functions like tethering that the iphone does not provide.

My service has been spotty since I moved back to Sacramento from San Diego a year ago. I get thoroughly annoyed when my friends have service with Sprint or Verizon and I don't.

It's time for a new phone for me as I've also had the 3G for two years, and ya know what, why not try the Droid, worst case scenario I come back to ATT and get a 4G iPhone. Thing I like about the Android OS like you said is that it is much more open, 2.2 will support Flash and it's much easier to develop apps.

I love Macs and the iPhone, but I HATE how push apple is with their products and development.

ocabj
06-01-2010, 8:59 AM
You can change carriers and keep your number.

Yeah, but even if I wanted to jump to Verizon, it's pointless unless they can get coverage fixed where I work.

Again, I've had no issues with Pacbell PCS / Cingular / AT&T, but if I lived in a more metropolitan area like SF, I'm sure I'd switch. A friend of mine moved from UCR to UCOP and had to switch from his iPhone to an Android variant on Verizon because his iPhone on AT&T was pretty much unusable in the Bay Area.

JDay
06-01-2010, 2:53 PM
A friend of mine moved from UCR to UCOP and had to switch from his iPhone to an Android variant on Verizon because his iPhone on AT&T was pretty much unusable in the Bay Area.

Doesn't surprise me, SF and NYC are two are the worst reception areas for AT&T.