Verizon and the iPhone: Nothing to report...yet

This was originally posted at ZDNet's Between the Lines.

Apple is reportedly talking to Verizon Wireless about bringing the iPhone to the carrier, according to USA Today. And Verizon executives aren't exactly pooh-poohing the reports.

On a conference call to discuss first-quarter earnings, Verizon operating chief Dennis Strigl said the company is always talking to device makers, but had "no announcements to make relative to Apple today."

USA Today reported that Apple is in high-level talks about bringing the iPhone to Verizon Wireless. The news comes just a few days after AT&T CEO Randall Stephenson said that the company was looking to extend its exclusive pact with Apple. Following Verizon's strong first-quarter earnings, Strigl said the following:

We're always open to discussions with any supplier. We have no announcements to make relative to Apple today. Historically we haven't been dependent on any one device.

The message: Verizon Wireless could very well be talking to Apple--not that Strigl would say so directly. And Verizon is in a strong position since AT&T had its iPhone bump and the wireless carrier is still performing well. Reading between the lines, it could be that Apple needs Verizon Wireless' 86.6 million customers more than the wireless carrier needs the iPhone. Apple has an exclusive deal with AT&T, which has 78.2 million subscribers, but the iPhone's addressable U.S. market could more than double with a Verizon deal.

A move to Verizon would be notable because the iPhone would be available on a CDMA wireless network compared to AT&T's GSM technology, according to USA Today. But is this a really big deal? Other phones work on both technologies.

(Credit: Larry Dignan/ZDNet)

This Verizon-Apple story largely boils down to two words: network and negotiation.

First, Apple is likely to want to expand iPhone distribution to other networks. And Verizon Wireless is the second half of a U.S. wireless potential duopoly. Why wouldn't Apple want to lock down the U.S. wireless market by having the two largest carriers in the fold?

And then there's network reliability. Verizon Wireless' coverage is just better than AT&T's. And as Om Malik notes, Verizon Wireless could give Apple an LTE network to play with. The iPhone with better coverage and 4G could be interesting. Verizon executives talked up their LTE buildout.

But this Apple-Verizon story probably comes down to negotiation. AT&T put its cards on the table. It really wants to extend its deal with Apple. Apple obviously wants to explore other options. The game: Squeeze AT&T into a better deal. Verizon is more than happy to play along.

(Credit: Larry Dignan/ZDNet )

[wavjockey]

Let's hope that Apple does the right thing here and joins Verizon.

The monopoly between Apple and AT&T is why I've stayed away from the iPhone.
I don't have a problem with the iPhone as a device. I just hate monopolies and I'm not that impressed with AT&T.

The sad thing is that nobody is effectively making a competing touch-screen phone.
While I prefer an additional landscape QWERTY keyboard with the touch-screen, Samsung, LG, etc. have issues with sluggishness on their phones.

I'll wait to see what happens first; an Apple-Verizon deal or Windows Mobile 6.5 (or 7 for that matter) that resolves some of the touch-screen inconsistencies on competitors phones.

[tmeesseman]

You need to learn the definition of "monopoly". Contractual exclusivity and a monopoly are not the same thing. Contractual exclusivity is due to a partnership between Apple and AT&T to make the phone as cheap as possible and provide the network that is needed. They offered it to Verizon first and they said no. Something tells me if Verizon had said yes, you would be hating on "monopolies".

[gopnick]

We'll see. Apple is probably just playing hardball with AT&T. But, we can all dream that a CDMA iPhone is coming.

Oh - and we won't see an LTE iPhone any time soon. Even with 30 markets live by the end of next year, Verizon's LTE footprint will be entirely too small for Apple's liking....

[ZBeeb]

Why is this a story... The headline even tells the story... "Nothing to report ... yet". Didn't stop you though did it?

[capnvan]

Concur.
"Verizon executives aren't exactly pooh-poohing the reports."
The relevant quote: "We have no announcements to make relative to Apple today." Guess they're not really talking it up, either, huh?

"The message: Verizon Wireless could very well be talking to Apple..." Of course, given the previous comment, it's at least equally as likely that they're *not* talking to Apple.

"Apple obviously wants to explore other options." Really? Did you have a source for that? I think we can agree that Apple, like any company, likes to explore its options. But presumption does not make anything "obvious."

[dragonbite]

This would be great.. since my wife's phone is dying I can give her mine and get myself one of these... hope they announce it soon!

[Nicholas Buenk]

CDMA is not used in most of the world, GSM gets them on dozens of carriers around the world and CDMA would basically just get them on sprint and verizon and maybe some japanese carriers.
In the last quarter, AT&T activiated 1.6 million phones, and Apple says 3.8 million iPhone's were sold.
This means the US is just 42% of the iPhone market.
I really question whether Apple would go to the trouble of a seperate hardware design just to get onto verizon, Apple takes hardware design, thinness etc, as a top priority. It might not be convinent to design a phone around 2 different chips, maybe Apple fears compromising the design merely for Verizon, who's sigificance is a little overstated considering that this is an international phone.

My guess is if there are talks happening, it's to do with future 4G LTE networks, probably verizon lobbying Apple about it.

[eastmanweb]

I agree. These Apple-Verizon talks are all about the next-gen LTE rollout. Apple's not going to waste time with CDMA at this point.

[tmeesseman]

I really don't see this happening... Verizon is incapable of having a phone that it can't get it's grubby little hands all over the OS. Since Apple will NEVER budge on that, Verizon will have to suck it up or turn away. They already turned down the iPhone once and realized it was a mistake, so hopefully they've learned their lesson.

[pburley1]

While I actually prefer LG phone operation to the iPhone, since you can forward text messages and the like, there's no denying the iPhone has the superior phone-based browser. And it's hard to be on the outside looking in while AT&T users get to use the App Store. Let's hope this deal takes shape, with whatever new device makes it to market.