A Verizon iPhone Would Benefit Apple, Challenge Motorola, RIM, Palm

 
 
By Michelle Maisto  |  Posted 2010-03-31
 
 
 

Apple is said to be at work on two new iPhones-its annually updated version for AT&T, which is based on GSM technology, and a CDMA-based model for Verizon Wireless-according to a March 29 report from the Wall Street Journal.
 
Rumors of a Verizon iPhone have been circulating for some time but, looking realistically at how long it will take Verizon to fully upgrade its network to the 4G technology LTE (Long-Term Evolution), Apple has reportedly decided to now go through with a CDMA version, according to the WSJ, quoting "people briefed by the company."
 
Gartner analyst Carolina Milanesi, while expecting such a move, is still taking the news with a grain of salt.
 
"[Gartner has] been talking about the possibility that Verizon might get the iPhone before the end of the year, and this is in line with our expectation," she told eWEEK. "However, considering how Apple works, I doubt that anyone got prebriefed on an announcement such as this one, despite claims made to the press."
 
An iPhone would surely benefit Verizon, Milanesi believes, and Strategy Analytics analyst Neil Mawston adds that Apple, too, would greatly benefit from the move.
 
"Apple is fast expanding its retail presence among the world's largest carriers, and adding Verizon Wireless to the list would give Apple a solid boost to its shipments and revenues," Mawston told eWEEK. "Doubling shelf share in the United States could potentially double Apple's market share by 2011."
 
In a Feb. 1 report, Strategy Analytics found that Apple shipped 25.1 million iPhones during 2009, finishing the fourth quarter with 20.2 percent of the worldwide smartphone market share and the year with 19.8 percent. In third position, Apple finished behind BlackBerry maker Research In Motion and Nokia, which leads both the overall handset and smartphone markets.
 
Should Verizon get an iPhone, "Samsung, LG, Motorola, RIM and Palm will all have to up their game at Verizon to fend off an attack from Apple," Mawston said.
 
Indeed, a CDMA iPhone could prove a particular challenge for the flailing Palm, which could wind up offering its Pre Plus and Pixi Plus smartphones alongside the iPhone on both the AT&T and Verizon Wireless networks.
 
When asked about reports that offering the iPhone damages a carrier's bottom line, Mawston seemed hardly worried for Verizon or the success it might see in offering the iPhone to its 91 million customers.  

"Verizon may have to increase its subsidy budget for the expensive iPhone in the short term," Mawston said, "but Verizon will be betting that higher data revenues generated by wealthy iPhone users can more than offset those subsidy costs in the longer term."


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