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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.
Also, note that the new Verizon Wireless iPhone 4 does not include the latest, advanced 4G network called Long Term Evolution (LTE). Again, I believe they didn’t want to risk putting their latest technology in the very first phone, especially because Verizon Wireless has not completed the deployment of the advanced LTE network.
You can be assured that the next version of the Verizon Wireless iPhone will have both international capability and LTE, which will make it an even more popular hit to subscribers than the first version. For many subscribers-especially younger kids and students who don’t have to travel to places such as Europe-the initial iPhone offering on Verizon Wireless will do just fine.
Personal Hotspot Capabilities on the Verizon Wireless iPhone 4
Personal Hotspot capabilities on the Verizon Wireless iPhone 4
The iPhone 4 on Verizon Wireless will also include new “Personal Hotspot” capabilities, letting customers use the iPhone 4 to connect up to five Wi-Fi-enabled devices. This works in a similar manner as Mi-Fi and Overdrive which provide Wi-Fi access for nearby mobile devices and wireless broadband on the back end.
The “Personal Hotspot” is a very clever way to provide wireless broadband to the Verizon Wireless iPad, which is sold as a Wi-Fi-only model. If the Verizon Wireless customer buys an iPhone 4 and an iPad, they can use the “Personal Hotspot” to provide wireless broadband access to their iPad (and to the iPod touch and the user’s Macintosh or PC notebook for that matter). Apple allows the Verizon Wireless subscriber to power up to five mobile devices. I expect that Apple will offer this capability on all future iPhone models.
Pricing
The iPhone 4 has been available on the Verizon Wireless network since February 10, 2001, for a suggested retail price of $199.99 for the 16GB model and $299.99 for the 32GB model (with a new, two-year customer agreement). The iPhone 4 is available at more than 2,000 Verizon Wireless Communications stores nationwide, as well as through Apple.
I’m pleased to see the iPhone available on Verizon Wireless. I believe that Apple should provide the iPhone to anyone who wants to buy it, no matter what wireless operator they use. Hopefully, the iPhone will officially be announced on Sprint and T-Mobile in the United States in the not-too-distant future.
J. Gerry Purdy, Ph.D. is Principal Analyst of Mobile & Wireless at MobileTrax LLC. As a nationally recognized industry authority, Dr. Purdy focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Dr. Purdy is an “edge of network” analyst looking at devices, applications and services, as well as wireless connectivity to those devices. Dr. Purdy provides critical insights regarding mobile and wireless devices, wireless data communications and connection to the infrastructure that powers the data in the wireless handheld. He is author of the column Inside Mobile & Wireless that provides industry insights and is read by over 100,000 people a month.
Dr. Purdy continues to be affiliated with the venture capital industry as well. He currently is Managing Director at Yosemite Ventures. And he spent five years as a Venture Advisor for Diamondhead Ventures in Menlo Park where he identified, attracted and recommended investments in emerging companies in mobile and wireless. He has had a prior affiliation with East Peak Advisors and, subsequently, following their acquisition, with FBR Capital Markets. For more than 16 years, Dr. Purdy has been consulting, speaking, researching, networking, writing and developing state-of-the-art concepts that challenge people’s mind-sets, as well as developing new ways of thinking and forecasting in the mobile computing and wireless data arenas. Often quoted, Dr. Purdy’s ideas and opinions are followed closely by thought leaders in the mobile and wireless industry. He is author of three books as well.
Dr. Purdy currently is a member of the Program Advisory Board of the Consumer Electronics Association (CEA) which produces CES, one of the largest trade shows in the world. He is a frequent moderator at CTIA conferences and GSM Mobile World Congress. He also is a member of the Board of the Atlanta Wireless Technology Forum. Dr. Purdy has a B.S. degree in Engineering Physics from University of Tennessee, a M.S. degree in Computer Science from UCLA, and a Ph.D. in Computer Science and Exercise Physiology from Stanford University. He can be reached at [email protected].
Disclosure Statement
: From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I’ll disclose it at that time.