Apple, Inc. (NASDAQ: AAPL) could sell twice as many iPhones if it decided to dump partner AT&T, Inc. (NYSE: T) as the only exclusive provider of the iPhone, according to some Bernstein Research analysts. Would Apple dare do that? Since Apple and AT&T joined exclusive forces almost two years ago, Verizon Wireless has emerged as the largest wireless carrier in the U.S. -- and none of its 87+ million subscribers has an iPhone. Mighty tempting, Apple.Although Apple would have to possibly sacrifice iPhone profit for market share, the balance could easily lean in its favor. There are some instances when market share makes more sense for the long term (as in, first-mover) as opposed to short-term cash. It could also charge more for the Verizon iPhone as well to help with the burden.
With Apple sitting on a huge pile of cash and doing quite well even in the face of a recession, does it need to push the iPhone to the largest carrier in the U.S.? The opportunity may be there and Apple would blow the doors off the show by indicating at next week's WWDC event that it had indeed joined with Verizon Wireless to make the iPhone even more popular than it already is. Breaking exclusivity with AT&T would cost the company, but it may be worth it. There are probably millions of folks waiting to buy an iPhone once it's available on networks other than AT&T.











Reader Comments (Page 1 of 1)
6-02-2009 @ 3:38PM
JCH said...
It's the only reason we don't own i-phones. My parents and my wife's parents live in a remote are that is served best by Verizon, so we're loyal to Verizon.
6-16-2009 @ 4:05PM
Ruel Smith said...
Too bad Verizon actually had first dibs at the iPhone but wanted way too much control over it and Apple told them to take a hike. Now they wish they could get it. Never overplay your hand...
6-03-2009 @ 9:42AM
realitybites said...
Verizon can't have the iPhone now.
Their network is not up to speed to run the iPhone as it's on CDMA which Apple will not support as it's an antiquated technology being phased out.
Verizon is due to move over to GSM going forward but would have to build an entire GSM network now if they wanted to get the iPhone now, per Apple.
Reportedly, 2010 is to be their switchover year.
Your alarming lack of technology knowledge is glaringly apparent which leads one to wonder why you write a column about technology.
6-03-2009 @ 4:45PM
pepsi21a said...
isn't verizon currently running on a 3G network?
6-03-2009 @ 10:58PM
baziz1 said...
First of all CDMA is not antiquated technology. Second Verizon Wireless's network is far superior (and faster) to AT&T's network.
Once Apple exclusive provider agreement with AT&T expires, Apple should make and sell iPhones to all the wireless carriers. Apple should aim for the market share. It should sell iPhones to all the wireless carriers regardless of their technology, just like RIMM does with its blackberry smartphones.
Already Apple is seeing heated competition for touchscreen cacpable smartphones from Rimm Blackberry Storm, Palm Pre, Samsung, HTC, and many others. It does not make sense to stay loyal to one carrier (AT&T) and one wireless technology (GSM). Apple should broaden it scope by expanding the iPhone to all U.S. wireless carriers and technologies.
If Apple does manufacture a CDMA capable iPhone, it will be able to sell the iPhone to millions of Verizon and Sprint customers. Both Verizon and Sprint have faster and more reliable data CDMA networks than AT&T's inferior GSM network.
I will start selling out of money puts on Apple, Qualcomm, and Verizon. All three companies will benefit if Apple decides to manufacture a CDMA iPhoone. I will also start buying put options on AT&T.
I wouldn't be surprised to read, in the near future, that AT&T's iPhones customers, are selling their GSM iPhones on ebay and switch to Verizon's or Sprint's CDMA iPhones.
6-04-2009 @ 9:41AM
realitybites said...
Baziz,
Regardless of Verizon/Sprint's implementation of their CDMA network and how well it works or how much coverage it has, it's still being phased out in favor of a 4G varient of GSM.
CDMA is dead going forward...it's just a matter of time.
Widely publicized and pretty common knowledge now since late 07.
6-04-2009 @ 11:10AM
Chad said...
re: realitybites
First off, all you are doing is saying, almost word for word, what an Apple Exec recently said. Next time, use statements that aren't coming from others. You say CDMA is dead going forward and so on. But as I recall Apple tried going to Verizon with the IPhone before AT&T just a few short years ago. And wasn't CDMA already on it's way out then? Yes. So the argument of CDMA being out of date is a poor argument. Because obviously it didn't matter then either as it's more than capable to support the Iphone. And making an IPhone that's CDMA and LTE 4G capable (arriving next year) is not hard. Many Verizon Smartphones are both CDMA and GSM capable so using 2 types of networks on one phone is possible. Besides, anything has to be better than AT&T's 3G network coverage. It's horrid. Verizon's 3G coverage blows AT&T's 3G coverage out of the water. And LTE coverage will highly likely be far better on Verizon that AT&T. If AT&T's current 3G coverage and the speed it's being implemented nationwide is any indication the IPhone is essentially crippled anyways on AT&T. And you better believe Apple knows this. Could an Iphone arrive on the Verizon network in a year or 2? Yes. Very easily. In fact, count on it happening.
6-09-2009 @ 1:26AM
aussiepunk said...
@chad, @realitybites, @baziz1 - guys guys - lets stick with the facts not conjecture. A number of independant tests including a recent one by engadget put AT&T's HSDPA/UMTS network at much higher speeds then Verizon's EVDO Rev.A. Here's the caveat though, you better live in a major metropolitan area, AT&T's 3G coverage even according to their own website isn't that hot. If you never travel outside big cities, AT&T is a go. If you want your 3G to work pretty much everywhere there's even reasonable population centers, Verizon is your best bet.
http://www.verizonwireless.com/b2c/CoverageLocatorController?requesttype=NEWREQUEST&lid=//global//plans//coverage+maps
http://www.wireless.att.com/coverageviewer/?lon=-121.81726&lat=37.296338&sci=6&3g=t