updated 04:00 pm EST, Mon January 10, 2011
Notes CDMA tech more expensive than GSM
Verizon could charge around $20 to $30 more than AT&T for subsidized iPhones, claims JP Morgan's Mark Moskowitz. The analyst observes that in order to properly support Verizon, any new iPhone model must use the CDMA networking standard, the hardware for which is more expensive than the GSM/UMTS used by all current iPhones. He adds though that while buying an iPhone could be more expensive through Verizon, the issue might be offset by better network performance.
Partly because AT&T has been the exclusive US carrier of the iPhone so far, its network has been the subject of many complaints. Subscribers may experience dropped calls and slow or non-existent 3G data, particularly in large, wealthy, tech-heavy cities such as New York City and San Francisco. Verizon by contrast has been ranked by Consumer Reports as the best major carrier in the US, even with an influx of Android smartphones and the option of unlimited 3G data.
"If Verizon can avoid network performance issues during and after a potential iPhone roll-out, then we expect a multi-year growth spurt in U.S. iPhone sales," says Moskowitz, "as meaningful levels of AT&T iPhone subscribers could migrate to Verizon for improved performance."
Apple may be reluctant to allow differing pricetags for American iPhones, as it would break from the company's normal product policies. Verizon might instead be expected to pay Apple a greater subsidy than AT&T, which could potentially be offset by a larger subscriber base.