Verizon has iPhone envy
Correction, 5:25 p.m. PDT: An earlier version of this story incorrectly stated the number of iPhones AT&T sold in the third quarter. The company has not disclosed that information. This story also incorrectly described Verizon Wireless' churn rate. The story has been corrected to reflect the changes.
Verizon Communications CEO Ivan Seidenberg said Monday during the company's third-quarter conference call that the wireless operator would be more than happy to have the iPhone on its network. But he said it wasn't up to Verizon.
"This is a decision that is exclusively in Apple's court," Seidenberg said. "We would obviously be interested at any point if they thought of us as a partner."
The comment comes even as Verizon introduces new devices and launches advertising campaigns to target the iPhone.
In one of its ads, Verizon takes a jab at AT&T's network coverage with a slogan that mocks the iPhone's catchphrase, "there's an app for that." Verizon has tweaked it, and says instead, "there's a map for that." Verizon has also put together another ad for the Motorola Droid that spoofs the iPhone.
It's easy to understand why Verizon is drooling over the iPhone. Verizon added about 1.2 million new wireless subscribers in the third quarter. AT&T, which reported third quarter earnings last week, added about 2 million new subscribers. The company hasn't said specifically how many of those new customers are iPhone customers. But it's believed it's a fairly large part of the new activations. The company said that nearly 40 percent of the 3.2 million new iPhone activations were new customers to AT&T. Some of these new activations were people who were using recycled phones, but a large number of them are likely to be be new iPhone 3GS phones, which went on sale in June.
In a market that is more than 89 percent penetrated, getting new subscribers means stealing some customers from other carriers. It looks like the iPhone could be eating into Verizon's customer base. Verizon reported for the third quarter that its churn rate for postpaid customers or customers on a contract was 1.13 percent, which was up slightly from the company's post paid churn rate in the second quarter of 2009. Customer churn rate refers to how many customers cancel their service.
Verizon consistently has one of the lowest churn rates in the industry, because in general customers are very satisfied with the coverage and reliability of its network. But the company has lacked a wide selection of cool phones, which has tempted many consumers to leave. And many subscribers hold on in the hopes that Verizon will one day get the iPhone.
Verizon on Monday introduced Research in Motion's Blackberry Storm 2.
(Credit: CBS Interactive)In the meantime, Verizon is talking up its new line up of smartphones. On Monday, the company introduced Research in Motion's touch-screen BlackBerry Storm 2. And it's introducing the Motorola Droid, which uses Google's Android operating system, on Wednesday. Early next year, Seidenberg said the company will have the Palm Pre.
Without the iPhone, Verizon needs to win some ground with these new devices. The iPhone is not just valuable because it has helped AT&T win new subscribers, it has also increased the amount of money consumers are spending on services, since the phones require a $30 a month data plan.
Adding new data revenue is important to all of the major cell phone operators, because profitability on voice services is declining. For wireless operators, boosting data revenue is important to improving their profits.
Verizon recognizes this and has revised its data plan pricing for non-smartphones. The company will also require the new pricing plan for more non-smartphones in the future.
But Seidenberg emphasized that the company's strategy in wireless is not to be dependent on one device or even a few, but to have a broad range of products.
"We've always said we'd have a wide array of devices," he said. "And when we deploy 4G wireless it pushes you to think of the kinds of other devices we could add. We want to make sure we have a breadth of products, instead of focus on one or two."
Specifically, he said that in addition to cell phones, Verizon will be generating data revenue from machine-to-machine devices that will use the network to transfer data.
The company also plans to add more integration between its wireless services and its wireline fiber service. The company's fiber service, called Fios, offers customers broadband, telephone, and TV service. The company recently began bundling wireless into Fios pricing packages. And it plans to add more functionality between the services.
"We have a chance to develop combinations of applications around services," Seidenberg said. "So you could use handsets to do different things."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
No, it's more like: "the iPhone has a rapidly growing share in a heretofore uncrackable market because it is a better product".
HTH.
(and no, I don't have one - I'm still using a Blackberry).
can you guys smell apple news?
Also, that 96% number is a bit dated - it's more like 89% (and slowly dropping) now ;)
"The company said that nearly 40 percent of the 3.2 million new iPhone activations were new customers to AT&T, which means that about 1.28 million of the 2 million subscribers it added were iPhone users. In other words, AT&T added about the same number of new iPhone users, as all of the new customers Verizon added during the quarter."
...and that's why Verizon wants it so bad, even as it derides the thing.
-No. Verizon allows you to use the built-in GPS chip and native GPS app such as BB Maps. Phones might come Verizon's VZ Navigator loaded, which, yes, costs $9.99 a month to use but is strictly optional.
"...and that's why Verizon wants it so bad, even as it derides the thing."
-The way I see it is, even with the iphone, AT&T still only had less than 1 million more subscribers than Verizon and this is with Verizon's "crappy" phones...with Droids around the corner, this could be bad news for AT&T.
I dumped Verizon after 4 days due to their limitations and serer lies (Sales promised friends and family on my plan, lack gps use, monthly price, inability to use soft keyboard in many apps, and more).
I also thought the Omnia sucked as a phone. I have also used Windows Mobile 5 and 6, and Blackberry. I reluctantly conceded to an iPhone after my experience with the competition and have been very happy with where I ended up. I consider AT&T very lucky the iPhone has Wi-Fi capabilities.
Either VZ is way iDont over the iPhone disaster or they are just going with the best thing that happened with smart phones; Android. Android will run on more phones by 2012 than the iPhone OS.
I am not exacto sure what VZ is going for, but all iWont logic here is going toward the latter.
oh wait im sorry...
LOL!
(sounds like a prison intervention for kids)
While it's no iPhone, (LG 290C) It's a 30 day plan with unlimited messaging, minutes, data, nationwide, anytime, and it just happens to use the Verizion network for $45.
It's a hold me over until apple brings another network on board. I'm tired of getting voice mails, and texts 2 days later from AT&T.
Gimme a break - it's 100% business - forget being a fanboy - any CEO that didn't try to get the iPhone should be let go by the board of directors.
(south korea/japan in some form or another)
"No you are incorrect. CDMA is old technology..."
The GSM specs were published in 1990, and the first network went live in 1991 in Finland. The CDMA (IS-95A) standard was published in 1993, with the first network going live later that year. So which is the older technology?
"GSM was not a mandate in Europe, they went to it because that is the newer technology..."
Absolutely, positively incorrect. The individual countries (this was pre-EU) passed laws mandating GSM as the mobile standard to foster interoperability. Both GSM and CDMA were young technologies at the time, and the Europeans didn't want the fractured market that competition would bring. It had nothing to do with one technology being superior to the other. It was politically driven. This was influenced in no small part by Nokia and Ericsson being huge proponents of TDMA and, in turn, GSM systems.
Is it because there are no good GSM carriers in the U.S.? Can someone explain?
Several times in the past 10 years I've been on AT&T I've had a phone fail for some reason and the fix was to pull out an old phone in the drawer and insert the SIM into it and be good to go. CDMA doesn't give you that flexibility.
The reason that gsm can surf ant talk at the same time, it is because they have a gsm radio and a cdma radio for internet. So why did cdma fail?
Apple always was going to only use GSM and AT&T the Verizon rumor is false and they never approached Verizon.
If you want to be taken seriously then I recommend not displaying your partisan position with the metaphorical equivalent of a flashing neon sign by using childish terms like "crApple" and "iPhony". Not only does this mean that people will ignore what you have to say but it also demonstrates a stunning ability to ignore the world around you. Whatever you think about Apple and the iPhone it has been remarkably successful and AT&T's figures clearly demonstrates that a lot of people are signing for them rather than Verizon because of the iPhone. Verizon might not be literally drooling for the iPhone but they would be fools for not taking it if they had the option. Regardless of how much AT&T is paying, some money is always better than no money, particularly when you are pushing a subscription business model.
Regards,
Kelmon
@ckh1272 - you should learn to read also, I didn't say it was one company's fault. Do you need pictures?
CDMA !!!!!!! (or is that four words?)
You are 100% correct. It's because of the outdated technology they are still using. Inspite of having the best network the reason why they have the worst phones is only because of CDMA.
Once Verizon moves to LTE, I bet iPhone will come to Verizon since LTE supports GSM.
CDMA is a newer technology that gets better service and clarity because of shorter wavelengths. GSM is an o-ho-hold technology.
Canada's networks like Telus and BELL that are CDMA are switching to GSM/HSPA to get the iphone in november.
Yeah..., community college 1, Harvard 0
The only thing I hate is apple never pays dividends...., Hold..., sell..., arrrrggggggg!!
That Tesla looks hot!! http://www.teslamotors.com/
I was going from memory after 15 years, and rounding off.
It was 12.75 in July of that year.
So I've made more money.
So your point is what?
That I was off by $1.25?
Good call there sport! ; )
I think most people in this economy, would be happy to be in the ball park.
Go flip some more burgers for $7.25P/H
On another note : It`s funny how the iPhone looked cutting edge two years ago , and now the Droid is almost here with a bigger , higher rez screen , great physical AND software keyboard , and an app store that is ahead of where Apple was at the same point in time..
But what will really drive Android phones is their tight , native integration with Google location based services.
I use google services for *everything*. Gmail, Calendar, GV, Google Reader, etc. I'd switch to the droid but can't swing the data plan.
They have been building communications equipment for our military and law enforcement for decades. I would.
See , there is an intelligent response with factual information.
Who would buy a Motorola phone?! They are probably the largest cell phone manufacturer in the world behind Nokia.
"Military ... are actually developing Iphone apps for the troops in combat because it is a lot easier to deal with an iphone than a laptop when you are in combat."
Has someone been drinking some kool-aid? Seriously, do you believe that? Do you think the Military would actually want people to use their own iPhones in combat situations? Do you believe everything you read online? How gullible are you?
he didnt say anything about them using their own iPhones, and it is a fact that the military is creating iPhone apps for troops to use
www.eweek.com/c/a/Mobile-and-Wireless/iPod-Touch-iPhones-Deployed-for-Military-Duty-242593/
Android syncs with the cloud and has OS updates pushed out OTA. After all , it`s almost 2010.
Apple...stuck in the stone age.
I still enjoy Apple though (like the iMac G4-best computer design ever) but don't enjoy how they do things. (mac hardware plus windows 7 is fantastic-the hardware is always pretty fantastic)
Are you saying Steve didn`t know ho had the better network ???
http://en.wikipedia.org/wiki/Steve_Jobs
- by AppleSuxLeo October 26, 2009 3:49 PM PDT
- That 4x3 iPhone screen looks so...quaint ; )
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- by AppleSuxLeo October 26, 2009 3:55 PM PDT
- Adjective
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- by Yelonde October 26, 2009 4:12 PM PDT
- I bet you a million bucks that Microsoft pays this kid 10 cents every time he posts a non-imformative, and lame response about apple.
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- by ckh1272 October 27, 2009 2:00 AM PDT
- @Yelonde--That's why he has NO posts on the articles regarding Win7 download problems. He and shellcodes_coder are mysteriously absent from there for some odd reason.
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- by ckh1272 October 27, 2009 2:04 AM PDT
- @Leo--Wow, a display that is a whole .2 inches smaller. What will Apple do??
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Showing 1 of 4 pages (153 Comments)quaint (comparative quainter, superlative quaintest)
Having old-fashioned charm.
Whatever keeps him running through the hard economy I suppose.