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    Verizon iPhone Prepped by Apple: Report

    By
    Nicholas Kolakowski
    -
    August 9, 2010
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      Apple could be lining up manufacturers for a Verizon iPhone, according to a TechCrunch report circulating online. That would dovetail neatly with other indicators that AT&T’s exclusive hold on the iPhone could break by early 2011.

      “Sources with knowledge of this entire situation have assured me that Apple has submitted orders for millions of units of Qualcomm CDMA chipsets for a Verizon iPhone run due in December,” Cheney wrote in his Aug. 8 TechCrunch posting. “This production run would likely be for a January launch, and I’d bet the phone is nearly 100 [percent] consistent with the current iPhone 4 (with a fixed insulator on the antenna).”

      Meanwhile, a new Securities and Exchange Commission filing by AT&T suggests the carrier is preparing to lose its exclusive lock on the iPhone. The oblique references in the document, when paired to the rumors emanating from sources such as TechCrunch, add fuel to the assumption that the iPhone is months away from appearing on multiple carriers.

      “We believe offering a wide variety of handsets reduces dependence on any single handset as these products evolve,” reads AT&T’s SEC filing for the quarter ended June 30. “In addition, offering a number of attractive handsets on an exclusive basis distinguishes us from our competitors.”

      That “dependence on any single handset” could be taken as a reference to the iPhone, which has helped propel AT&T’s smartphone revenues-and complaints about the carrier’s ability to handle the accompanying network demand.

      The AT&T filing suggests a plan for when that exclusivity ends: “We expect to continue to offer such handsets (based on historical industry practice), and we believe our service plan offerings will help to retain our customers by providing incentives not to move to a new carrier.”

      Nor will that loss of handset exclusivity affect AT&T’s bottom line, at least according to the document: “While the expiration of any of our current exclusivity arrangements could increase churn and reduce postpaid customer additions, we do not expect any such terminations to have a material negative impact on our Wireless segment income, consolidated operating margin or our cash from operations.”

      Previous analyst reports have suggested that, while the market for a Verizon iPhone would be huge, that customer base wouldn’t necessarily come from existing AT&T customers.

      The “iPhone would be a plus for Verizon, but not a seismic industry change, given the relative stickiness of smartphone customers,” Barclays Capital analyst James Ratcliffe wrote in a June 22 research note. “[The] primary source of Verizon iPhone [subscribers] would be pent-up demand by existing Verizon [subscribers].”

      Thus, while Ratcliffe predicts that between 500,000 and 1 million AT&T customers would switch to Verizon’s iPhone, the number of postpaid Verizon subscribers would only increase by a net total of 900,000 in 2011.

      Other analysts have suggested the iPhone will arrive on T-Mobile first, perhaps as soon as the third quarter of 2010.

      “From our understanding, this is becoming closer to reality than ever, with sourcing indicating it could happen as early as this fall or [by the first half of 2011],” Kaufman Bros. analyst Shaw Wu wrote in a June 10 research note. “While the general consensus is around Verizon (which we believe will happen eventually), we continue to believe that T-Mobile USA is the most likely candidate given its use of similar cellular technology such as AT&T.”

      Avatar
      Nicholas Kolakowski
      Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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