Verizon Wireless is in talks with Apple (AAPL) to sell the iPhone as early as next year, USA Today reports. This is an obvious move that would be good for both companies. But technology differences and network rollouts could slow the process.
Why does Apple want to sell the iPhone at Verizon Wireless? If Apple is going to maximise its iPhone business, it needs to be on every major carrier in the world, and a Verizon deal is a big step in the right direction. Verizon (VZ) is the no. 1 wireless carrier in the U.S. and Apple’s exclusive deal with AT&T (T) — which runs out next year, if it’s not extended — is the reason why many people don’t buy iPhones. (Moreover, AT&T’s sometimes-crappy 3G network is why a lot of iPhone owners are frustrated with their phones.)
But when will it actually happen? Timing could depend on what network technology Apple is planning to use for the iPhone: Verizon’s current CDMA 3G technology or its forthcoming LTE 4G technology, which will roll out beginning later this year.
USA Today suggests Apple might take the fastest road to market, building a phone for Verizon’s current 3G network: “It would mark the first time Apple has produced a version of the iPhone for a CDMA wireless network, which is different from AT&T’s GSM technology,” USA Today‘s veteran telecom reporter Leslie Cauley reports.
If that’s true — that Apple is building an iPhone for the Verizon CDMA network — it would add some short-term complexity to Apple’s iPhone business — there’s no other CDMA network in the world it’s likely to sell on. And it’d be a contradiction of what Apple COO Tim Cook said on Apple’s earnings call last week:
“Well from a technology point of view as you know, Verizon is on CDMA and we’ve shown from the beginning of the iPhone to focus on one phone for the whole of the world and when you do that, you really go down the GSM [road], because CDMA is – doesn’t really have a life to it after a point in time.” (Via Seeking Alpha)
Of course, Cook’s statement could mean a lot of things. It could be a negotiating tactic with Verizon, a smokescreen, or an indication that Apple does want to wait to build an iPhone for Verizon’s forthcoming LTE network, which will also work on 4G networks at AT&T, T-Mobile, and around the world.
So what’s going to happen? If probably wouldn’t be too much of a hassle for Apple to build a CDMA version of the iPhone — most other manufacturers do it — so if Apple is trying to end its exclusivity with AT&T and start selling with Verizon next year, that’s the most likely path. But if Apple is committed to keeping one network technology roadmap, and waiting for 4G, a LTE iPhone is unlikely next year; 2011 looks more likely.