Apple, Verizon in disagreement over CDMA iPhone pricing - report

Posted:
in Future Apple Hardware edited January 2014
As Apple and Verizon are rumored to be in negotiations for a summer 2010 CDMA iPhone launch, the nation's largest wireless carrier and the handset maker are believed to be at odds over pricing.



In a new note to investors Tuesday morning, Maynard J. Um of UBS Investment Research said that a new iPhone is expected to launch in mid-2010. Whether that phone would be available for Verizon's CDMA network remains to be seen.



"We believe a CDMA-iPhone is also in the works," Um wrote, "though believe Verizon Wireless and Apple may currently be apart on pricing."



Even if Verizon and Apple can't work out a deal, Um said he believes a CDMA phone is still a possibility. Potential handset launches in China and/or Japan, where carriers operate other CDMA networks, could occur this year.



Last fall, conflicting reports within chip maker Qualcomm suggested a Verizon-capable iPhone could arrive in mid 2010. Whether that handset would be a dual-mode world phone, or a Verizon-only CDMA model was disputed.



Though Qualcomm plans to release dual-carrier chips that would allow future phones to work on CDMA/EVDO carriers such as Verizon and Sprint, as well as rival 3GPP carriers using UMTS/HSPA+ technologies like AT&T and T-Mobile, those chips will not arrive until the second half of 2010. Some have said that timeframe would not allow Apple to release a dual-mode phone until 2011 at the earliest.



And others believe a Verizon iPhone deal is more wishful thinking than anything else. Given that both Verizon and Apple are focused on consumer control, analyst Shaw Wu with Kaufman Bros. previously predicted that the conflicting interests of the two companies would get in the way of an agreement.



Um's note Tuesday would suggest that to be the case. Currently, it is estimated that Apple gets a favorable $700 average selling price per iPhone, subsidized through exclusive carrier AT&T. Compare that with the ASP of the Motorola Droid, exclusive to Verizon, which costs an estimated $450 per sale.



Um also noted that he does not expect Apple to announce any new products at CES 2010 this week. But he does expect new products to be announced by the end of January, as the Cupertino, Calif., company is expected to hold an event on Jan. 27 at the Yerba Buena Center for the Arts in San Francisco. New products, he said, could include typical refreshes of the Mac Pro, a processor upgrade for the MacBook Pro, and a new iPod shuffle. Additionally, speculation of late has reached a fever pitch that the company will unveil a 10-inch touchscreen tablet device in January, and the product will ship in March.



"Given the tablet is generally expected," Um said, "its functionality and appeal will be the determinant of how the stock reacts following an announcement."



Hybrid tablet-netbooks are expected to have a major presence at CES this week, Um said. He also expects netbooks to improve with more power and functionality, thanks to faster processors. Many hardware makers are looking to use CES as an opportunity to beat Apple to market for a tablet device.
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Comments

  • Reply 1 of 102
    Both side know that they will make a ton of money if they go to bed together.
  • Reply 2 of 102
    zindakozindako Posts: 468member
    Why is Verizon so stubborn?
  • Reply 3 of 102
    docno42docno42 Posts: 3,515member
    Quote:
    Originally Posted by iphonedeveloperthailand View Post


    Both side know that they will make a ton of money if they go to bed together.



    Sure - but I don't expect Apple to budge and walk away if necessary. For all the rhetoric, Apple doesn't need Verizon. I will laugh if verizon screws up again.
  • Reply 4 of 102
    nothing new here....move along
  • Reply 5 of 102
    Seriously, this is pure BS. Apple will never make a CDMA version of it. It makes 0 sense. What they'll probably do is add the 1700Mhz UMTS antenna to it and call it a day. This will guarantee that T-Mobile, Wind, Dave wireless and Videotron will get the device as well.



    Adi
  • Reply 6 of 102
    MacProMacPro Posts: 19,251member
    Quote:
    Originally Posted by zindako View Post


    Why is Verizon so stubborn?



    Assuming any truth which on this site you never can lol ... Yeah, you'd think they's learn. If memory serves they had first chance and screwed that up too. Reminds me of the record companies that turned down that unknown band called the Beatles! Here they are with a rare second chance and they argue?
  • Reply 7 of 102
    zepzep Posts: 130member
    Quote:
    Originally Posted by digitalclips View Post


    Assuming any truth which on this site you never can lol ... Yeah, you'd think they's learn. If memory serves they had first chance and screwed that up too. Reminds me of the record companies that turned down that unknown band called the Beatles! Here they are with a rare second chance and they argue?



    eh, but the first time around according to rumors/reports there wasnt even a working model of the phone yet. its hard to take a risk on something you cant see/test. im sure the record company had at least a demo record of the beatles.



    and negotiations happen with any product. both sides are looking at cost/profit margin. its going to happen.
  • Reply 8 of 102
    zepzep Posts: 130member
    Quote:
    Originally Posted by adisor19 View Post


    Seriously, this is pure BS. Apple will never make a CDMA version of it. It makes 0 sense. What they'll probably do is add the 1700Mhz UMTS antenna to it and call it a day. This will guarantee that T-Mobile, Wind, Dave wireless and Videotron will get the device as well.



    Adi



    1) att's rep is bad. when service is bad, people generally blame the phone and the service. going to vzw will improve apple's brand

    2) gateway device. if apple truely wants people to use the iphone as a gateway device for consumers to purchase apple computers/products, why wouldnt they want the largest US carrier to have it?
  • Reply 9 of 102
    Quote:
    Originally Posted by zindako View Post


    Why is Verizon so stubborn?



    The Apple iPhone may not remain exclusive (although I think AT&T will manage another 2 yrs) I don't expect Apple to take a $250+/unit hit on the subsidy. Apple has got a good thing going with the App sales at the iTunes Store. Companies like Verizon want to try their hand at building up such an inventory - good luck. I can't blame them for wanting some of this action with the last billion "sales" taking less than 100 days.



    I wonder how far we are before acceleration of sales (sales´´) goes to zero and what will the sales rate (sales´) be at that time?



    Adding more phones to the mix (we have 3G, 3GS and Chinese versions already) splits the effort on the Engr end and invites REAL comparisons between carriers with twice the support issues. What is in it for Apple? I don't think it would increase sales appreciably and the extra cost due to support, Engr, extra inventory, etc probably wipes that out.



    Verizon doesn't want to have to admit that they blew it in the beginning with Apple; and with the Moto Droid they may actually feel like they have a product that can (be tweaked and in a couple years) get them nearly the revenue they may gain from having access to the iPhone. I think Verizon will be surprised and although the Android OS share has grown it has done so at the cost of fragmentation and the inability to have a centralized App store that will ever compete with Apple's.



    Just my two cents...
  • Reply 10 of 102
    Quote:
    Originally Posted by Zep View Post


    1) att's rep is bad. when service is bad, people generally blame the phone and the service. going to vzw will improve apple's brand

    2) gateway device. if apple truely wants people to use the iphone as a gateway device for consumers to purchase apple computers/products, why wouldnt they want the largest US carrier to have it?



    that Verizon's network could handle the iphone's notorious uber-increased data usage of at&ts network. Verizon would more than likely be plagued/stressed the same at att's. Then there is the non-simultaneous data/voice (currently) and why would Jobs lower the iphone's expectations when they just even created their own commercials supporting their carrier.



    Wishful thinking, and i believe apple is selling their computers very well w/o verizon thanks to the touch and the iphone. I am about to replace my ibook (been running like a champ since (2004) and my old g4 sawtooth with a new 27 imac with the i7s...all w/o verizon..
  • Reply 11 of 102
    Have at it Verizon.......the more carriers the better.
  • Reply 12 of 102
    To Verizon and Apple:



    Listen you guys. I don't know what your problem is and I don't care. Make the deal and get it done. We have been waiting three years. That is long enough.



    And this summer is too long to wait. Have the Verizon iPhone ( the ViPhone?) ready for the special event you have coming up. And a new Apple TV too while you're at it. I have a wallet full of cash! Don't you want some of it? You know you do.
  • Reply 13 of 102
    Quote:
    Originally Posted by DocNo42 View Post


    Sure - but I don't expect Apple to budge and walk away if necessary. For all the rhetoric, Apple doesn't need Verizon. I will laugh if verizon screws up again.



    I couldn't agree more about Apple not needing them - I think you should probably prepare for a hearty chuckle also.



  • Reply 14 of 102
    Quote:
    Originally Posted by Zep View Post


    2) gateway device. if apple truely wants people to use the iphone as a gateway device for consumers to purchase apple computers/products, why wouldnt they want the largest US carrier to have it?







    Because CDMA is dead end and its support time runs out. The fact of customer base for one network will not last forever. 70% of the world is not on CDMA and never has been. One US company does not make difference in global mobile market. In fact T-Mobile with its owned local international networks is much bigger company than Verizon or AT&T. hence T-Mobile might be attractive to Apple.



    That's understandable that Apple is hestistant and Verizon has only customer base to offer, but that can dwindle over time. Verizon is not growing anymore. Others are. Competitive edge is where growth is that sooner or later will take away market from those who do not grow on established market.
  • Reply 15 of 102
    ajitmdajitmd Posts: 365member
    Both VZ and Apple are about control of the customer. Anyway, loss of exclusivity with ATT means reduced subsidy and ASP. Not good for profits.



    Apple is better off innovating and coming with compelling products... gain market share, even via ATT. One way to unload the ATT network would be to sell 3G WAP for home and business use.
  • Reply 16 of 102
    nofeernofeer Posts: 2,422member
    Dear apple:

    Makes lots of money i don't own verizon stock

    thank you



    ps keep up the great work
  • Reply 17 of 102
    Quote:
    Originally Posted by adisor19 View Post


    Seriously, this is pure BS. Apple will never make a CDMA version of it. It makes 0 sense. What they'll probably do is add the 1700Mhz UMTS antenna to it and call it a day. This will guarantee that T-Mobile, Wind, Dave wireless and Videotron will get the device as well.



    Adi



    I agree.



    T-Mobile I think is a more natural fit for Apple, in that it's an international company. and here in the US, they're smaller. Besides, 4G is the next wave and CDMA is going to go away, not improve.



    So, what would be the point of introducing an aging technology over a never, faster one, in 4G?



    I believe that Apple's not really interested in (and wary of) the kind of explosive growth that going with Verizon might bring. Steady, incremental and solid marketshare increases are more to Apple's benefit ultimately.



    Apple skims the TOP of the markets they're in, not the bottom. There are plenty of other companies willing to do that.
  • Reply 18 of 102
    zepzep Posts: 130member
    Quote:
    Originally Posted by Rhetoric.assassin View Post


    that Verizon's network could handle the iphone's notorious uber-increased data usage of at&ts network. Verizon would more than likely be plagued/stressed the same at att's. Then there is the non-simultaneous data/voice (currently) and why would Jobs lower the iphone's expectations when they just even created their own commercials supporting their carrier.



    Wishful thinking, and i believe apple is selling their computers very well w/o verizon thanks to the touch and the iphone. I am about to replace my ibook (been running like a champ since (2004) and my old g4 sawtooth with a new 27 imac with the i7s...all w/o verizon..



    how do you figure it will be just as stressed as ATT? there's no way of telling how ready vzw is for the iphone.



    you really dont read most of what people say. i said its a gateway device. youve obviously used a mac before the iphone. good for you, but how many people bought macs due to the iphone/itouch. if they want to reach as many US people as possible to get more people to use apple products, its smart business to make something where another 80+ mil people will have a chance of trying.



    Quote:
    Originally Posted by maciekskontakt View Post


    Because CDMA is dead end and its support time runs out. The fact of customer base for one network will not last forever. 70% of the world is not on CDMA and never has been. One US company does not make difference in global mobile market. In fact T-Mobile with its owned local international networks is much bigger company than Verizon or AT&T. hence T-Mobile might be attractive to Apple.



    That's understandable that Apple is hestistant and Verizon has only customer base to offer, but that can dwindle over time. Verizon is not growing anymore. Others are. Competitive edge is where growth is that sooner or later will take away market from those who do not grow on established market.



    CDMA wont die off. the audio codec will be used for a very long time due to its a much cleaner and now, more secure codec than GSM. the dual channel chips made by qualcomm will ensure the longevity of cdma in the US while still being able to offer gsm to the world.



    in the US its hard to grow subscribers. sprint bleeds them every quarter. vzw and att still have net adds. im honestly not sure how tmobile does, but im sure its losing some customers every quarter. its no more or less steal customers from 1 wireless company and put them in your own.
  • Reply 19 of 102
    hcho3hcho3 Posts: 6member
    Uh oh.

    Here we go again. Welcome to 2007.

    Verizon needs to realize that they are in worse situation than they were in 2007. They got to offer just about everything AT&T offers to apple. Stop being stubborn, Verizon. Motorola Droid and iphone are not same. In 2007, they disagreed on having Wi-fi, App store and itunes store. Now, they are disagreeing pricing. Verizon thinks they can call a shot, but they should realize that Apple does not need Verizon at all. It's the customers that is going to suffer.
  • Reply 20 of 102
    Knowing Verizon, they don't just want the phone with a minimal subsidy and a cut of the revenue stream... they want to load some of their own code on the device.



    I remember when I had a great Motorola phone that they crippled so that I could use Verizon's "advanced features."



    I hope the two figure something out... more options always helps the consumer.
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