Verizon May Not Accept Apple’s Contract Terms for iPhone Launch

Sep 24, 2010
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Verizon May Not Accept Apple’s Contract Terms for iPhone Launch

Launching the iPhone may be a hard proposition for Verizon, despite what the wireless company's CEO said recently. With Verizon iPhone 4 rumors at an all time high, especially with talk about production beginning as early as November of this year. But, if a new report from Mike Abramsky of RBC Capital Markets is accurate, then the note might dispel any chance of a Verizon-branded iPhone. Interesting that this isn't the first time the contract-talks have been brought up in recent months.

Abramsky believes that the iPhone will see other wireless carriers in the United States, but that Verizon may be too headstrong, or perhaps to dead-set on preserving their presence in the Android-based smartphone market, to actually ever launch the device in question. The report states that Apple may turn to T-Mobile, or even Sprint, to expand the iPhone's presence on networks here in the United States. Abramsky's note says, "Verizon may not accept Appel's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network." He went on to add that he does not believe that Apple would want to be "second banana" to Android on Verizon, and that they would not be willing to accept anything less than prime marketing from the wireless carrier.

He went on to add that, despite the fact that Verizon's CEO wants an iPhone that supports Verizon's 4G (LTE) efforts, these contract term discussions may not be resolved by then. "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal." He notes that recent reports of an iPhone 4 being developed with CDMA-based technology could mean that the device is heading to other international markets, like China Telecom or KDDI in Japan, which we've heard in the past as well.

The rumor mill would be alive and well if there were only one-sided rumors fueling it, but it certainly makes it more interesting to hear what might be going on both sides. If an iPhone is heading to Verizon, then it's more than likely going to support LTE. If it's not, then it probably will not be a big blow to Apple, as Abramsky points out in his report. With Verizon's presence in Android well known at this point, it may be enough for Verizon to stick with it, and ride out the iPhone storm. All of this could also relate to Verizon's CEO mentioning that they had "not earned" the iPhone yet, because they haven't come to a decision contractually.

[via AppleInsider]


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