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Verizon iPhone may be delayed until 2012, says analyst

updated 11:10 am EST, Wed December 2, 2009

Apple, Verizon policies in conflict

A deal between Apple and Verizon may take longer to materialize than normally assumed, says Kaufman analyst Shaw Wu. AT&T's exclusive hold on the American iPhone is expected to end in summer 2010, and Wu notes that adding Verizon to the list of carriers could open up a market of 89 million potential US customers, greater than AT&T's current 82 million. AT&T will likely push to have the contract extended into 2011, Wu comments.

A more significant problem is said to be the "conflicting interests" of Apple and Verizon. Both companies are described as driven by a desire for high profits, as well as customer control -- Apple through iTunes, and Verizon through V CAST. Verizon may in fact intend to offer its own mobile app store, though it has not announced any formal plans.

The carrier also enjoys high profit margins, as even the Motorola Droid is believed to have an ASP (average selling price) of just $450 per unit, as compared to the $700 AT&T pays for the iPhone. RIM's BlackBerries have an ASP of $340, while Palm devices are valued at $436. Either Apple or Verizon may be forced to make a sacrifice.

Wu argues that it may thus be more likely that T-Mobile or even Sprint could become "more willing partners" in the near term. T-Mobile has the present advantage, as it relies on the same network platform as AT&T, even if its 3G operates on a different band. Verizon may only gain the iPhone when LTE (4G) becomes available on both its network and AT&T's, which could happen as late as 2012.




by MacNN Staff

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Comments

  1. wings_rfs

    Joined: Dec 1969

    +5

    Imaginary Delay

    Kinda neat that you can delay something that's never even been acknowledged to be true in the first place.

  1. aristotles

    Joined: Dec 1969

    +2

    Ok, so Verizon "might" increase TAM in US by 2X

    The problem is that most Verizon customers are not in the market for any smartphones as they only care about the cheapest plan for voice and texting. Is it really worth it to release a CDMA phone at this stage when Verizon would only possibly double the US total addressable market for iPhones? There is no guarantee that as many Verizon customers would buy the iPhone as have bought through AT&T.

    Then there is the other issue that the iPhone is not a US specific product anymore. I think Verizon might have had a chance with the first release of the iPhone but now I don't think it is worth it for Apple to spend the R&D on a dying standard like CDMA. When LTE does come out, networks like AT&T and Rogers/Fido or Telus/Bell will still offer HSPA as a fall back mode that will worth with both HSPA phones and LTE phones since LTE is backwards compatible with UTMS/HSPA.

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