Who Really Benefits from iPhone on Verizon Rumors?
Daring Fireball posted a tremendous article about how Verizon, AT&T, and Apple benefit if the rumors about an iPhone Lite and iPad media tablet on Verizon are true-ish (Gruber also looks at Apple's iPod strategy mapped to the iPhone -- go read it now, I'll wait).
What struck me, however, was how Verizon, AT&T, and Apple benefit from the rumors themselves rather than the actual devices and/or their eventual carriers, if any.
Apple is, according to a separate rumor, negotiating with AT&T to increase the length of their iPhone exclusivity agreement. AT&T's last earning report showed just how important the iPhone was to their revenues, especially their new customer acquisition and premium service charges. This puts them at a distinct disadvantage with Apple, who could theoretically -- if inconveniently -- re-engineer the iPhone to work on any of the big 4 US carriers (CDMA for Verizon or Sprint, different GSM bands for T-Mobile). Rumors that Verizon is already talking to Apple, then, pushes AT&T over edge of disadvantage cliff. Obviously this is of great benefit to Apple.
Verizon had what could only be termed a lackluster launch of their so-called iPhone killer, the BlackBerry Storm. With AT&T likely getting yet another mainstream hero phone this year in the form of the 3rd generation iPhone. Sprint, the other CDMA carrier, is getting the less mainstream, but still geek-anticipated Palm Pre as their hot summer hero phone. Where does that leave Verizon? The BlackBerry Tour ("Niagara") and various HTC Touch series Windows Phones which will -- eventually -- be upgradable to the profoundly incremental Windows Mobile 6.5. Great gear, perhaps, but not hero phones on the same level as the iPhone or even Palm Pre (or last year's Android G1 launch on T-Mobile). Rumors that Verizon may (soon) get an iPhone of sorts, or iPad, however, give the perception of a hero phone coming to the network. This is a huge benefit to Verizon, and might even keep some users from switching to AT&T (or Sprint) this summer to get a real device.
Inversely, AT&T benefits not one bit from these rumors. They hurt AT&T's negotiations with Apple and they may cost them some users who would have defected from Verizon.
We discussed this briefly last Wednesday on the iPhone Live! podcast, and no doubt others have made the same observation this week after reading the series of rumors (yes, even the one about the iPhone Lite actually being the Microsoft iPhone-Killer Pink). However, looking past the devices, it does seem like the rumors in and of themselves carry a hefty benefit for both Apple and Verizon.
Until the 4G Long Term Evolution (LTE) networks roll out in a couple years, that might be the closest we really get to seeing Apple and Verizon together.
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