Verizon Wireless says next year it will let any mobile phone capable of running on its network onto its airwaves. It will also let subscribers run any software application they want on those phones. This is a smart move for Verizon: as Google promotes its Open Handset Alliance and Android mobile operating system, any carrier that doesn’t shout “open!” will look uncool. But this is hardly a wireless revolution.
For starters: Good luck finding a non-Verizon phone that will work on Verizon’s network. Verizon uses a CDMA network, and the only other place (practically speaking) to find a CDMA phone in the U.S. is by buying one attached to Sprint Nextel (S). And if you’ve bought a Sprint phone, that means you are tied to a 2-year Sprint contract. Apple’s (AAPL) iPhone or other phones that use competing “GSM” wireless networks won’t work.
A phone manufacturer could theoretically decide to start selling its CDMA phones directly to consumers. But people are used to paying artificially low prices for their phones, since carriers currently subsidise their handsets. An unlocked Palm Treo 680 costs $300 more if you buy it directly from Palm without a contract. And big phone makers will still be better off selling their gadgets through carriers, since the carriers will promote and sell them via their extensive marketing channels. They’ll also offer (limited) customer service.
Some people think this will open the door to devices running new services, like free Internet phone service or video calling. But Verizon (VZ) has no intention of turning itself into dumb pipe. You can expect service plans for non-Verizon phones to include data-network fees based on usage — meaning those “free” calls could cost a bundle.
Verizon’s announcement will be more meaningful in a few years when more devices — not just mobile phones — use wireless data networks. It’s also a convenient way for hobbyists to get niche devices like NY-based Bug Labs’ “Bug” to work on a mobile phone network. But this won’t cause a ripple in the wireless industry.