Did AT&T iPad deal delay Verizon iPhone until 2011?
An analyst has suggested that AT&T provided those "breakthrough" cheap and flexible iPad data plans in exchange for a brief extension in iPhone exclusivity, delaying the launch of iPhone (or iPad) on Verizon until 2011.
Of course, with analysts we never know how much of what they say is based on actual information and how much is based on supposition, but here's the crux:
"AT&T had to do something dramatic to get the iPad," said Brian Marshall, a Wall Street analyst at BroadPoint AmTech. AT&T's move was to discount their normal wireless data plans by 50% to iPad customers.
As part of the tit-for-tat, AT&T got what it wanted. "For that pricing [on the iPad], AT&T was able to negotiate a six-month extension on the iPhone exclusive," Marshall said.
Rumors of AT&T outbidding Verizon aren't new. Before the iPad, we heard Apple and Verizon had the technology in place but were apart when it came to money -- not surprising with both companies being so utterly controlling. Still, many believed they'd work it out and 2010 was finally the year iPhone would hit Verizon.
Despite success with Android, Verizon continues to want the iPhone. Verizon users also still want the iPhone. We daresay, users of other networks (some of whom already have iPhones) want Verizon to get the iPhone.
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I hope this isn't true.
Well this is gonna make signing another two year correct with AT&T this summer a little easier. :-P
I don't believe this. I think AT&T is just about DONE with the exclusivity.. I think they want some help.
Sorry but other than no contract how are those prices breakthrough at all? I find them average and AT&T probobly likes no contract since if people had to sign a contract they would probobly use more data and take down the network.
Apparently verizon thought 59.99 per month would be fine. Apple users by and large are big spenders. Ever seen an AT&T bill?
I still don't see how Verizon can carry the iPhone. First and foremost is the cellular technology. Why would Apple make a piece of equipment that is for a small segment of the total cellular market especially when Verizon is on the verge of moving their technology a little bit that would make it more compatable with the rest of the cellular world. Second, and I am not real sure on this one as I don't use Verizon, but from what I have seen with Verizon users, at this point in time, you can't do the whole surf the web and talk experience at the same time. With the Verizon setup, you currently can do one or the other, not both. Not trashing Verizon, but in a world where the cellular technology that rules is GSM based, Verizon is a small player (but that is supposedly changing with their move to 4G I believe).
yea. I really don't see verizon getting the iPhone any time soon. did we all forget about those commercials big red played bashing the iPhone directly?not sure, but apple seems like a spiteful lot, not sure they'll be playing nice with VZ anytime soon
These analysts seem as if they're grasping for straws to me, they have literally been wrong EVERY time when it comes down to Verizon getting the iPhone.
but with the Apple WWDC in June, just about a month away, that will be the real test in time to see if Apple announces Iphone with Verizon. IMO.
I think the argument is plausible and consistent with AT&T's bewildering series of course alterations about network capability how ever many months ago. It seemed as if AT&T were going to go down the path of policing their network, but instead they decided to power through their existing caps, gave more actual information about their New York coverage problems with promises for future solutions, and offered this unique plan for the iPad.
The iPad's 3G data plan is novel. The reason people may not think so is that they have never been in the market for notebook connect plans at $60 per month with a two-year contract, which has been and continues to be the norm. That overall costs keeps most people out of the market for 3G modem capability for personal devices.
IMO, only a contractless, cheaper plan such as the one for the iPad can possibly entice the generic consumer to pay money for 3G networking for personal use. At first, specifically because they are not used to it, users will not opt to use 3G with the iPad. (It will be interesting to track the differential sales of the 3G and the Wifi-only iPads.) And the fact that there is no contract actually takes the theoretical network demand down a little bit: if someone is in a contract for data use, the tendency is to use it as much as possible; if it is just an option, the tendency is to use it just for convenience.
I just wonder if AT&T gets any money from the hardware sales of 3G iPads, whether or not the user actually pays for 3G access. That would give AT&T some revenue from making the iPad deal without actually stressing the network.
Making a CDMA or 4G iPhone is not a big deal for Apple. It involves swapping out a couple components and having different firmware. Since Verizon has the most customers and AT&T is second, presumably Verizon's network speeds and coverage must be competitive with AT&T's. After all, Verizon certainly doesn't have cheaper plans than AT&T.
iPhone to Verizon has been rumored since the 1st gen device in 2007, no one has any clue as to when or IF it will ever land on any carrier other than AT&T, stop with these annoying rumors until there is something more than just pure speculation.
@Jusbmean
It is about market saturation. The iPhone has sold so well that, at some point, Apple will run out of AT&T customers and switchers to reach. Now that the iPhone has been around more than a full contract cycle, Apple may also consider those that are left are arguably harder to sell to, or else they would have switched before. Compare that target to that to the vast, documented pent-up demand for iPhones among users who cannot leave Verizon. For the relatively low cost of swapping out a radio, Apple would net millions of easy new sales utterly out of their reach at the present. At some point, Apple will run the numbers, and decide the opportunity cost of staying AT&T exclusive and missing those customers outweighs the radio swapping R&D + AT&T's payouts. At that point, they will switch.
No argument with the CDMA/LTE discussion except to note that very little would spur Verizon to speed their LTE rollout than and Apples-to-Apples comparison (giggle) campaign with Luke Wilson doing things on his AT&T iPhone that you can't do on your Verizon one. That in turn would spur AT&T on, and we all would benefit.
@Jusbnmean: You do understand that Verizon is not switching its network to GSM, but is moving to LTE which uses OFDMA/SC-FDMA. Verizon will still use CDMA for voice and data when they is no LTE coverage and as of now LTE is not working over voice yet. Apple would be wise to make a CDMA based iPhone so they can tap into another market. All Apple has to do is switch out the radio in the phone for this to work.
Justb it's easy to see how Verizon could sell an iPhone on their network. Both Verizon and Apple would be laughing all the way to the bank. I'll tell you why. Because 95% of customers on Verizon. Or any carrier for that matter, have no idea what CDMA is or where it's going. People are too technology stupid to do their own research before they buy something. 90 million customers on that carrier have no idea their current device will be useless when Verizon finally shuts off
CDMA. And you know what you can tell people
it's going to and they still won't get it. You'll have people standing in line at the Verizon store going "hey my phone stopped working" you could stare every customer in the face that you sell a Verizon iPhone too and say. CDMA is going away in a month. And you will still break records selling the phone. Because people are clueless.
@(Copy of) Dev: nailed it.
I could care less if the big v gets it or not. There network isn't as reliable as at&t where I live anyway. I would rather manually masturbate caged monkeys then go back to verizon.
IPhone to Verizon announcement next month. Could care less if you belive me. Just watch...
I'm still staying with AT&T tho. Coverage is steadily improving and an iPhone on CDMA is just nonsensical IMO...
I don't think Apple would really make a CDMA iPhone that would work on only one carrier when the rest of the world uses GSM and HSDPA instead of EVDO.
I bought an HTC Incredible. Not as good as the iPhone but close enough. I've had it with AT&T.
Just to be clear when I mention that Verizon is a small market, I am looking at this globally. Again, while some might consider it not a big deal to just change out the core components to support CDMA, it is a big deal when you look at the larger scheme of things where Apple supports a technology that is used by the larger audience of people. Just forget AT&T's GSM footprint, and then the scope becomes Verizon CDMA with just it's almost 100 million subs against the world of GSM. I still wouldn't see a company investing the time into making something work for such a small segment. Others seem to say that it is just as simple as popping out a chip and replacing it with another and that isn't the case when you include all the testing for power consumption, cellular reception, etc. Not saying it couldn't happen, but it just seems like it moves further from the reality of happening. This isn't a slam on Verizon or whether their technology is best or not, just more of realities of where things are right now.
Again with the iPhone on Verizon, lets look at FACTS. Verizon had the chance to get the iPhone but wanted more control than Apple was willing to give up. Why do people think that Apple is so willing to forgive and forget? Then their were all the iPad rumors that it was going to be a Verizon device, um NO it was not, still AT&T. Cost of manufacturing, the iPhone is a GSM phone because the world is mostly GSM. Apple can find partners in every country with GSM, not with CDMA. Next CDMA will die within a couple of years. It makes absolutely no sense to R&D a phone with dying technology. As others have pointed out, it more than just a radio swap. So please, lets quit the iPhone on Verizon dream, I just don't see it happening, especially in the near term.
What if apple stayed gsm in the us and went with t-mobil they sell on t-mobil over seas and would still gain millions of sales with changing very very little about the phone compared to AT&T remember android started with t-mobile with the g1 just because their exclusive agrement ends doesn't mean they HAVE to go to verizon sprint would sell Hillary clintons left nut for the iPhone verizon isn't a guarantee
yaa cause we all know these "analysts" are always right on the money when it comes to predictions. /s
Is there a particular feed I can use that removes all Verizon stories? Most of the time the articles are nothing more than conjecture with little substance, and the topic at large is completely irrelevant to me.
@scottae316: This "the iPhone is a GSM phone because the world is mostly GSM" contradicts what you stated here "Verizon had the chance to get the iPhone but wanted more control than Apple was willing to give up." CDMA wont be dying in a few years because Verizon and other CDMA carriers will still use CDMA when there is no LTE coverage. LTE is not GSM, but instead uses OFDMA uplink and SC-FDMA downlink with support for both TDD or FDD. To break it down again GSM is based on TDMA and CDMA is based on well CDMA. I could careless about spending money on R&D to develop a CDMA based iPhone and Im sure Apple has already done that. Being an Apple stock holder I want Apple to sell these suckers to anyone and everyone.
There is much more to the cost of a CDMA iPhone than just R&D and testing. It would also add another production line and greatly affect stocking in their supply chain (phones that don't sell on CDMA networks can't be easily repurposed for other networks and vice versa). I imagine they have a good idea on how many phones of each capacity and color to produce and when they know where they are going they can flash them and include the appropriate AC plug and literature and ship them off.
Sure other manufatcturers manage to make different models for different networks but at lower profit margins. Focusing on producing a limited number of models for 8-12 months at a time is one of the ways in which Apple keeps their profit margins so high, which is good for stockholders ;)
@MrC
All true -- Apple quite painfully learned (I hope) that lesson back in the Mac II/Quadra/Centris days, when there were almost more models than sales :)
Still, those are not dealbreakers in and of themselves, just more factors Apple includes as they run the numbers. If Apple gets the control they want and sees better profit potential in tapping tens of millions of VZW folks, they will offer a Verizon phone. If not, they won't.
Nothing to do with hating AT&T blue or loving Verizon red -- for any rational business, both colors will always be subservient to green.
I myself even knew it was going to stay with at&t. It's really obvious. Although, i don't like what their points are on. They claim that they had to "out-bid" Verizon? How would they know that, for sure. Maybe Apple just really liked at&t, which they do. Or maybe it was Sprint or T-mobile. Or maybe they didn't even bid? So this is what i don't like. They just assume Verizon for EVERYTHING!
From a business standpoint, I think Apple has too much to gain if it abandons U.S. exclusivity. Certainly, there are the technological considerations with developing a CDMA version of the iPhone. Obviously Apple was willing to do one when it peddled the original iPhone to Verizon.
There would be a cost involved in creating a whole new line to do a CDMA iPhone, but I think the return on investment would more than justify it, not only in the number of new iPhone purchases, but in the strategic value of not allowing Android the free run of the Verizon network. Blunting Android alone would be worth the effort.
I thought it was for 5 years. AT&T is about to lose like 3 million subsribers. Lol. I won't leave cause I'm alright with them but i know tons of people will move to verizon.
The issue I see with Apple making a Verizon-capable iPhone is that Apple would have to be willing to give up a LOT of leverage network-wise if it opened it up to two companies.
By only selling on AT&T, they can threaten to take away exclusivity, meaning AT&T will practically bow to any request. Once Apple makes a phone that is Verizon-capable, they now have to deal with two companies that could possibly tie up innovation as they bicker back and forth about implementation of [insert technicality here].
Even if Verizon gets the iPhone, I won't be moving back. I've found my quality of service at AT&T to be at least on par, if not more excellent than Big Red.
I think that the CDMA argument is the ultimate red herring here. If CDMA is so hard, then why do almost all other major cellular manufacturers make CDMA phones? Technically, the term CDMA is so misused that it's hard to tell what is really what. 3G GSM is really based on a lot of what is done with CDMA 2000, including the W-CDMA air interface. Both 3G GSM and CDMA2000 (Qualcomm's CDMA system that Verizon runs on) evolve to LTE. Therefore, what's the big deal here.
The real issue is Verizon and Apple being able to sign a deal. It's about the Benjamins.
i want the iphone to come to verizon as soon as they can make it happen and make the deal i dont want to switch to at&t and people who have a mac and verizon will be happy