When will Verizon Wireless get the iPhone?

Oct 19, 2009
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When will Verizon Wireless get the iPhone?

The surest way for someone to generate attention is by making an Apple prediction. Apple has a cult following, and its product development and launch strategy is famously secretive, so the fact that your source is the lunch counter guy across the block from the Hon Hai factory in Taiwan won’t be discovered (or may even be considered authoritative!). Financial analysts are often the worst offenders – we have been promised an Apple tablet more times than I can count, assured that an iPhone nano was on the way, and where’s that iPod touch with a camera?

However, market analysts like me (and fellow SlashGear columnist Michael Gartenberg) rarely talk about specific products before they’re launched. Often, that’s because I can’t: vendors frequently tell me what they are working on ahead of time under non-disclosure agreements. Another reason that I don’t make specific predictions is that I simply hate being wrong: my job depends on my being both trustworthy and generally accurate, and I’m not about to jeopardize that for a bit of extra attention in the press.

However, for my first SlashGear column I thought I’d make an exception, since there is one question I get asked more often than any other, by clients, journalists, at birthday parties, dinner parties, at the supermarket, and even when I’m trying to pray in the synagogue: when is Apple going to bring the iPhone to Verizon Wireless?

Apple has a contractual exclusive with AT&T that expires… at some point in the future. The exact contract length was never made public, but at the time the iPhone was first launched in 2007, journalists were quoting unnamed sources that it was a five year exclusive, which would keep the iPhone an AT&T exclusive through 2012. More recent articles have said that it is actually a three year exclusive, without even quoting “people familiar with the matter.” I have my own sources, but I don’t think it matters when the exclusive ends – the contract isn’t the only thing keeping the iPhone an AT&T exclusive.

Thanks to U.S. regulatory environment and frequency allocation issues stretching back to the Reagan/Bush administration (and on through the Clinton and W Bush eras), every national U.S. carrier runs a different mix of technologies, often on different frequencies. AT&T runs a GSM/HSPA network while Verizon Wireless runs a CDMA/EV-DO network. The technologies are not compatible, so the iPhone quite literally will not function on Verizon Wireless’ network; this is not a matter of SIM locks or contractual exclusives – it just won’t work. Now you can certainly create a phone that has multiple radios in it to talk to whatever network you want to use, and HTC, RIM, and Samsung (among others) have done so, typically for phones aimed at business travelers. However, Apple is not likely to reengineer the iPhone to work on CDMA. Apple is a software company that delivers its user experience in hardware packages. Apple focuses on user interface simplicity and design, putting a lot of energy and effort behind just a few hardware platforms, and then sells them as broadly as possible. (By contrast, RIM is an engineering-driven company that brags about writing its own radio firmware to eke out potential performance gains.)

AT&T’s underlying GSM/HSPA technology is used broadly throughout the world, fitting Apple’s business model nicely, while CDMA/EV-DO is used primarily in North America and South Korea. CDMA is also a technology without a long term roadmap at this point; for 4G deployments, Verizon Wireless is moving to LTE, while the other big CDMA carrier, Sprint is already rolling out a competing (and incompatible) technology, WiMAX, with its partner Clearwire. Happily, AT&T is also moving to LTE, as are many European operators, so at some point there will almost certainly be an LTE iPhone and that iPhone will work on Verizon Wireless’ LTE network. It’s worth noting that the 700 MHz spectrum that Verizon Wireless is using for its LTE network was purchased with open access requirements built in – in other words, the carrier will not be able to lock LTE devices to its network.

So the question now hinges on when Verizon Wireless will have its LTE network up and running. Verizon Wireless is planning a 2010 rollout – hey, that’s just next year! Not so fast. It will take several years before Verizon Wireless has completed its rollout. After all, if you’re interested in Verizon Wireless for the quality of its network, you aren’t going to want a phone that only works in a dozen cities and doesn’t have the same coverage that Verizon Wireless’ CDMA network is known for. We also need to wait for the LTE chipsets to mature enough for Apple to bet on them. The first chips for any new technology are buggy or power hungry or both. It’s not just the chips; the antennas for prototype LTE phones using 700 MHz (the frequency Verizon Wireless and AT&T will be using) are currently almost as thick as the iPhone itself. The chips and antenna technologies will certainly improve I the future, but in the meantime, can you imagine Steve Jobs approving an iPhone with an external antenna? I can’t.

Based on my discussions with Verizon Wireless, with chipset providers, and with Apple, my best guess for when all these stars will align is somewhere around 2013 or 2014. At that time you should be able to buy an LTE iPhone that will work on either AT&T or Verizon Wireless.

But not Sprint.


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