INSIDE MOBILE: Finally! The iPhone 4 on Verizon
After almost five years under an exclusive relationship with AT&T, Apple finally made the iPhone available on the Verizon Wireless network last week. Here, Knowledge Center mobile and wireless analyst J. Gerry Purdy explains why bringing the iPhone to Verizon Wireless is a very important development for both Apple and Verizon Wireless that will have long-term implications to the wireless market.
I remember the day that Apple announced the iPhone back in 2007. That afternoon, a friend came up and told me she was so excited to hear about the iPhone being introduced. She was going to go to her Verizon Wireless store (where she had a family plan) and pick up iPhones for the entire family. You should have seen the look on her face when I told her it was only available through AT&T. She commented, "Why would they do that?" The answer, of course, is very simple: Apple received a reported $50 million from AT&T to have a multiyear, exclusive deal.But there's something else going on besides just taking money from AT&T. When you're bringing out an entirely new product, you have to control how many new things you are trying to manage at the same time. Trying to launch the iPhone on both AT&T and Verizon at the same time would likely have caused even more problems than the ones AT&T experienced with activation and higher than expected demand. Also, if you're Apple and you want to bring out a product that will work just about everywhere, then going with AT&T was the right thing to do since Verizon Wireless uses Code Division Multiple Access (CDMA), a technology that is not compatible with GSM that is used in Europe and much of the developed world. This brings up one of the real problems for Verizon Wireless subscribers who want to get the iPhone 4: it's not going to work in Europe and many other places outside the United States. If you take it to the Caribbean or to Europe, the phone simply won't work. Now, to be sure, Verizon has built other phones with international capability, so it is something that ultimately can be accomplished on their iPhone with additional effort and expense. Apple will have to add an international GSM radio to the United States' CDMA radio so that Verizon Wireless subscribers will be able to use their iPhone in Europe and most other places around the world.