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Apple in talks w/Verizon: iPhone lite, media tablet?

updated 02:05 am EDT, Tue April 28, 2009

Apple in talks w/Verizon

Apple is reportedly in negotiations with Verizon to bring two new consumer devices to the US market. Following recent rumors of Verizon's bid to win the flagship iPhone exclusive (when Apple's contract with AT&T expires next year), the new BusinessWeek report says that Apple has been in talks for over six months to bring two "iPhone-like" devices to the market, one of which could surface as early as this summer. Simply called the "iPhone list" by one of the publication sources, the first device is a "smaller, less expensive calling device," while the other is a media pad that "would let users listen to music, view photos, and watch high-definition videos" and allow users to place calls over a Wi-Fi connection.

According to the report, the rumored iPhone-like device is slightly thinner and smaller than the existing iPhone and will be cheaper than existing iPhones. Apple will reportedly reduce costs compared to the current device by using a so-called "system on a chip," which would combine several different chips into a single package, making it less complicated and less expensive. The report claims that the low-cost SoC chip, which could also potentially be used in the media pad, would have a much lower cost that will "blow away the margins on the BlackBerry and the iPhone."

The second media pad device under development is said to be smaller than an Amazon Kindle electronic reader, but has a larger touchscreen than the Kindle's, suggesting that Apple could be focusing on a virtual keyboard rather than a physical one.

Geared toward mobile net computing, the device could be aimed toward quickly growing "netbook" market, which aims to offer low-cost devices with basic PC functions and internet access. Looking to gain ground on AT&T, reports indicate that Verizon is readying subsidized netbooks; however, Nokia recently denied a rumored deal with Verizon to introduce a 4G touchscreen "iPhone-killer" device that would provide 4G Internet access via Verizon's upcoming LTE network. Alternatively, the rumored media pad device may be more like the e-book devices being peddled to carriers such as Verizon and AT&T.

"The media pad category might go to Verizon," the person who has seen the device told the publication. "We are talking about a device where people will say, 'Damn, why didn't we do this?' Apple is probably going to define the damn category."

It was not clear which device would be ready for launch this summer, but the report claimed that Apple has already created prototypes of the devices and that Apple CEO Steve Jobs, currently on leave until June, has been part of the discussion process.

Although the iPhone 3G has had an impact on Verizon's subscriber base and the company has been researching the effect of the device, BusinessWeek says that no deal is imminent: financial details over subsidy payments or revenue sharing as well as device application distribution could be potential deal breakers. Although talks have "heated up" recently, previous reports indicated that Verizon was in talks with Apple over the first iPhone launch, but balked at the subsidy and royalty payments demanded by Apple.

"Another deal breaker could be disagreements over distribution of wireless software applications," the publication wrote. "Apple is the exclusive provider and distributor of apps for the AT&T iPhone. If Apple requests a similar deal on newer devices, Verizon Wireless may balk."




by MacNN Staff

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Comments

  1. MyRightEye

    Joined: Dec 1969

    +1

    yeah, they balked last...

    ...time, and look where THAT got them. I think they'll be a little smarter this time round.

  1. nitewing98

    Joined: Dec 1969

    +2

    It would be nice

    ..if there were more than one provider for the iPhone, so this might work, if they can agree.

  1. Peter Bonte

    Joined: Dec 1969

    0

    Why didn't we do this?

    Why is h*** is nobody producing a affordable media tablet, is it so hard to do?

  1. EternalGuest

    Joined: Dec 1969

    +3

    consumer

    This would be so great for consumers. Two providers, more choices, more competition. I have loved my experience with my iPhone since day 1, but no thanks to AT&T. This will hopefully keep both companies on their toes concerning the iphone, and should bode well for Apple obviously (larger customer base). Hopefully it pans out.

  1. testudo

    Joined: Dec 1969

    -4

    re: consumer

    Just keep in mind this is just more of the same. Another device, probably with a large contract requirement on the buyer's side.

    And the last paragraph shows why. Despite all the calls for Apple to sell an unlocked phone, here they are again wanting to make sure you lock yourself into another carrier, just so they can get their cut of the pie.

  1. lepton

    Joined: Dec 1969

    -2

    iPhone no, tablet yes

    I think it is not about iPhone, AT&T will keep it exclusively. But the tablet... I believe the tablet will allow data-only connections to the Internet, over AT&T, Verizon and all carriers. They will have models for GSM and CDMA. No voice calls, VOIP only over WiFi, but unlimited data. I blogged about this here http://www.myallo.com/blog/2009/04/no-iphone-for-verizon-but-a-data-only-tablet/

  1. SSharon

    Joined: Dec 1969

    +3

    re: contract

    I thought ATT had a 5 year contract that was extended for 1 year last summer. How do all of these verizon iphone rumors say that the ATT exclusivity contract expires next year?

    I hope this leads to more competition, but there are plenty of cities in the US with 2 ISP choices and no competition to speak of.

    testudo: of course Apple wants their share of the pie, that is how subsidized phones work.

  1. kdogg73

    Joined: Dec 1969

    +1

    Apple wants to know

    can you hear me now?

  1. ff11

    Joined: Dec 1969

    +1

    re: contract

    Why should Apple want their share of the pie, aren't they supposed to be a charity?

  1. vasic

    Joined: Dec 1969

    -3

    Not a chance

    There is nothing for Apple to gain by making Apple available on Verizon as well as AT&T. The two carriers have practically identical coverage. In some areas, AT&T is better than Verizon, elsewhere the other way round. The number of people who would buy if Verizon was offered, and that can't buy now, is negligible.

    Meanwhile, Apple will immediately lose leverage they have with AT&T now. Why would AT&T be motivated to do all kinds of concessions to a handset maker (Apple) if their customers can easily defect and move their number to Verizon? Only to have the privilege of being one of the carriers that sells the iPhone? Nowhere near as attractive as being EXCLUSIVE carrier.

    Let's not forget the control freak that is Verizon. I can't imagine iPhone with Bluetooth, WiFi, iTunes store and App store on EVDO. Can you imagine the reaction of Motorola, RIM, Samsung? "How com Apple gets their store and all those features, and we can't!!??"

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