The Business Insider: Dan Frommer

iPhone For Verizon In 2010

Dan Frommer — Sat, 07 Nov 2009 09:45:00 -0500

Apple will release a new iPhone next summer that works on Verizon Wireless as well as all global networks, a report claims, citing sources in the Taiwan supply chain.

The report, via AppleInsider, also says that the new iPhone will be smaller than the current iPhone, including a smaller screen. And that it will be manufactured for Apple by a different supplier, a subsidiary of netbook-maker Asustek.

Assuming Apple does not renew its exclusive U.S. deal with AT&T, it makes sense that Apple would make an iPhone that could work on Verizon, the largest U.S. wireless carrier with 89 million subscribers. (Verizon uses a different technology than AT&T--CDMA--so Apple has to build a new kind of phone to work on the network).

Why should Apple make the iPhone available on Verizon?

As we reported earlier this year, it would be ridiculously cheap for Apple to make a CDMA-friendly iPhone. Even switching the current iPhone to a CDMA version would probably cost only a trivial amount. Amol Sarva, CEO of mobile gadget startup Peek, pegs the cost at less than $5 million.
It would be very good for sales. Even though AT&T has been a hugely successful partner for Apple in terms of overall sales in the U.S., most iPhone subscribers are still coming from within AT&T's ranks -- despite the fact that AT&T only represents about 1/4 of the total U.S. wireless subscriber base. There are millions of potential iPhone buyers at other carriers who have not bought iPhones, either because they are loyal to their current carriers or hate AT&T. Verizon could also probably steal some current iPhone subscribers from AT&T, given how lousy AT&T's data network has performed in key cities, such as New York City.
It would be bad for the competition. Verizon and other carriers are finally now getting (and promoting) decent iPhone competitors, such as the new Droid series powered by Google. But if Verizon were to get its hands on the iPhone, it would probably favor that over the Droid, at least sometimes.
What about waiting for 4G? Even if Apple waits for Verizon's "LTE" 4G network to be ready, it would need to be able to back up onto a 3G network for several years, for use in places where 4G service is not available or is not functioning. It's possible that Apple could push that roaming traffic onto AT&T or another GSM-based 3G provider. But it makes more sense to roam onto Verizon's CDMA network.

We're not personally thrilled about the idea of a smaller iPhone -- we'd even spring for a slightly larger one -- but it could probably find a happy audience of women, teens, and people with smaller hands. (It may also be popular in other countries where people tend to be smaller.)

Either way, it makes a lot of sense sense for Apple to sell a phone at Verizon as soon as possible.

Now check out this Christmas's crop of smartphones, including Apple's best competition →

The Business Insider: Dan Frommer

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