iPad Lets Verizon Wireless Take First Step into Apple Camp

By Wayne Rash  |  Posted 2010-10-16

iPad Lets Verizon Wireless Take First Step into Apple Camp

The announcement by Apple and Verizon Wireless that Verizon Wireless stores will begin selling the iPad on Oct. 28 is the first overt step by the wireless company into the Apple camp, but it's certain not to be the last.  

In a joint announcement, both companies said that Verizon Wireless stores will begin selling a bundle consisting of the Apple iPad and the Verizon Wireless MiFi 2200 Mobile Hotspot. The price for this bundle is approximately $130 more than the iPad by itself. It's delivered with a contract-free data plan, which starts at $20 per month for 1 gigabyte.  

The normal price for a 1GB plan from Verizon Wireless is $50 for a month of data prepaid. There is no 1GB postpaid contract shown on Verizon Wireless' rate page. However, there is a 250MB monthly plan for $39.99, or about twice the special iPad data plan price. The retail purchase price of the MiFi is normally $269.99 without a contract.  

So the Verizon Wireless iPad bundle is a great deal initially, and users who plan to keep the service for a few months will ultimately save even more money. Plus, they'll have the benefit of a 3G service with broader reach and better reliability than they get with the 3G iPad that uses the heavily challenged AT&T network. 

I'm told that Verizon Wireless will offer a distinctive protective sleeve for the iPad, although it's not clear whether that's included with the bundle. Verizon Wireless will also offer stand-alone WiFi iPads without the bundle. At this point, there is no mention of a 3G (or 4G) iPad using Verizon's service. All that's being offered are WiFi iPads and the MiFi wireless 3G hot spot. 

As you might imagine, nothing in the Verizon Wireless press release mentions a possible future iPad using the Verizon network. But it's easy to see that it's not rocket science to engineer a 3G or 4G radio to take the place of the existing AT&T 3G radio. But while it's not necessarily difficult to do this, getting a spot in the red-hot iPad production cycle may take a lot more doing. Right now iPads are selling like free beer at the World Series. One has to wonder how Apple can make enough to supply the 2,000 or so Verizon Wireless stores. 

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Also not mentioned in the press release are plans for Verizon applications for the iPad. While Apple's store has a wealth of applications, Verizon has a store of its own for devices it sells. Right now those apps are primarily aimed at Android devices. But Verizon's store generates revenue that the company will be loath to give up without an exceedingly good reason. The question is whether Verizon will make its own store available to iPad users or whether it will sell Verizon-specific apps on Apple's store. 

As you might imagine, a Verizon Wireless spokesperson refused to discuss what might come next, such as the much anticipated iPhone from Verizon. However, it seems unlikely that Verizon Wireless will enter into an arrangement with Apple to sell iPads and also give a reasonably discounted price on their products and service without something else coming down the pike. 

What I suspect will happen is this: We'll see the Verizon iPhone in January, which is no surprise. If I had to speculate further, I'd say that this iPhone will support 4G with a 3G fallback. The difference between the Verizon Wireless 3G/4G network is that of robustness. It's a better network than AT&T's. Analyst reports claim that the Verizon network has significantly more capacity and better redundancy. In other words, it's the network you want for your iPhone given AT&T's current problems.  

I don't think we'll see a 3G/4G iPad right away. Even though swapping radios in the iPad is probably a fairly trivial exercise, Apple is already making every iPad it can churn out. Adding one more variation to the production line isn't something that's easy. After all, even rolling the iPad out to all of the available countries that want it is taking time. But ultimately, it will certainly happen. Apple has little to gain from restricting the use of the iPad in the U.S. to only AT&T. In fact, I wouldn't be surprised to see the iPad showing up at T-Mobile and Sprint as well. 

Meanwhile, Verizon Wireless has come up with a nice bundle that will provide service in a broader area than for the AT&T version of the iPad. The fact that you can get the whole package for a discount and not have to worry about a data plan contract sweetens the deal. If iPhone buyers are lucky, maybe Verizon Wireless will offer similar sweet deals when it starts selling the iPhone. 

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