Bloomberg: Verizon iPhone coming in January?

Verizon Wireless customers who have been holding out for an iPhone on their carrier's network may finally get their wish early next year, according to Bloomberg News.

The wire service reported on Tuesday that Verizon Wireless will start selling Apple's iPhone in January. Bloomberg cited unnamed sources familiar with the plans. The deal, if true, would end AT&T's exclusive contract for the iPhone in the U.S. since its launch in 2007.

AT&T and Verizon Wireless representatives declined to comment on the latest rumors.

Neither AT&T nor Apple has ever disclosed the length of the exclusive contract AT&T has for the iPhone. But speculation of an impending Verizon iPhone have popped up periodically since the iPhone's runaway success began in 2007. It's been reported that Verizon originally turned down the exclusive rights to offer the phone due to unappealing demands from Apple.

AT&T's network troubles caused by the flood of data traffic created by the iPhone has only exacerbated the demand for a Verizon iPhone.

"If Verizon had the iPhone, I'd find a way to cancel my AT&T service today," said Dave Norfleet-Vilaro, a loyal iPhone subscriber who stood in line early Tuesday morning at an AT&T store to get the iPhone 4. "It's just ironic that I am waiting at an AT&T store where I've received the worst customer service."

Even though Verizon executives have never come out publicly and said the company will eventually offer the iPhone, they have indicated they'd be happy to have the device on their network. And as the largest U.S. carrier, it's a no-brainer that Apple would look to strike a deal with Verizon Wireless once exclusivity ends with AT&T.

It's almost certain that there will be an iPhone for Verizon's network. But the question is when. Despite Bloomberg's report, I believe the new device won't be available in January. It is more likely to be available later in 2011. Here is why.

The biggest reason is that Apple is likely developing a 4G iPhone for Verizon's new network. Not only is that network not yet commercially available, but there are still no products built that can use it.

Verizon is still building and testing the 4G network that uses a technology called LTE or Long Term Evolution. The company says it will be ready to launch the service in 25 to 30 markets sometime this year. But given that we're already halfway through 2010, my guess is that the network will only begin to launch toward the end of the year and that we'll see a flood of announcements come December.

Initially, the network will probably launch with 4G data stick products that fit into laptops. Smartphones that use the 4G network will likely not be available until at least the second half of 2011.

"Based on what we know from some early LTE deployments...availability of LTE chips is still limited," said Lars Johnsson, a vice president of marketing and business development for Beceem, which makes integrated WiMax/LTE 4G chipsets. "Verizon will launch its LTE network later this year. And we will have to see what that means when it happens. But what we've heard from people in the market is that power consumption is still very high for LTE. And the technology still needs to mature. It takes time to work out the kinks."

Chipmakers typically make chipsets for data sticks first, and it takes about a year for manufacturers to get smartphone chips that integrate 3G and 4G services on the market. Considering that 4G LTE data sticks aren't even available yet, it is highly unlikely that Apple could have a 4G iPhone ready for Verizon's network in January.

Of course, Apple may announce a Verizon 4G iPhone in January. The company has been known to make big announcements in January with the actual product launch months later. For example, the original iPhone and iPad were each announced in January, and the devices hit store shelves later that year.

Regardless of when it happens, the iPhone on Verizon will be a big deal. Some AT&T customers who are fed up with AT&T's sluggish 3G performance and dropped calls say they are ready to defect to Verizon Wireless. And many Verizon customers who have been waiting for the AT&T exclusivity contract to end have been biding their time unwilling to give up their service on Verizon for the iPhone.