Fortune: Apple to release Verizon iPhone in early 2011

Posted:
in iPhone edited January 2014
Fortune on Friday added itself to a growing list of mainstream publications that have "confirmed" that Apple will launch an iPhone on the Verizon network in early 2011.



The report from author Sarah Ellison states that the publication has "confirmed" that a Verizon iPhone will be released in early 2011. It noted that the most talked-about phone in America -- the Verizon iPhone -- is one that doesn't even exist.



The report, which profiles Verizon CEO Ivan Seidenberg's efforts to build the "nation's most reliable" wireless network, notes that Verizon's network will be "assaulted" in early 2011 with millions of new customers using the bandwidth-heavy iPhone. It was an influx of data consuming iPhone users that caused major problems and a public relations debacle for AT&T.



The report detailed how Verizon passed on the iPhone in 2005 because the wireless carrier felt Apple and its chief executive, Steve Jobs, wanted too much control over the sale of the device, and too large a cut of the monthly service fees. It also stated that Apple was wary of building a CDMA iPhone because the wireless technology is not as popular across the globe as it is in the U.S.



"Seidenberg tried to reassure Jobs that Verizon was quickly building a faster 4G (fourth-generation) network, one that would work globally," Ellison wrote of a meeting between the two in 2007. "He also tried to convince Jobs that Verizon had a superior 3G network to AT&T's. Jobs listened politely, as Seidenberg tells it, and agreed to stay in touch."



The two companies allegedly began talking again in December 2007, as AT&T struggled with dropped calls and network issues for iPhone users. The result: a new version of the iPhone 4, compatible with Verizon's 3G CDMA network, set to launch next year.



Verizon's iPhone is expected to offer special features, like live TV for customers of the company's FiOS cable service. It also, according to Fortune, likely will not work outside of the U.S.



Fortune joins a list of reputable news sources that have also confirmed that the iPhone will launch on Verizon's network in early 2011. Earlier this month, The New York Times, The Wall Street Journal, and Bloomberg all independently reported that Apple would release a CDMA version of its iPhone on the Verizon network next year.



The anticipated partnership has also been foreshadowed this week with the sale of Apple's iPad at Verizon stores. Customers can buy a Wi-Fi iPad bundled with a MiFi Intelligent Mobile Hotspot at the same price as an iPad with integrated 3G connectivity.
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Comments

  • Reply 1 of 55
    aplnubaplnub Posts: 2,605member
    The best and worst kept secret no one actually knows about in the business. I love rumors!
  • Reply 2 of 55
    I know all signs point to this being true, but there is something that just bothers me...



    Why would Apple and Verizon release a CDMA iPhone after the biggest shopping season of the year? Won't both companies lose money on this?



    Think about it... Apple releases the iPhone 4 in Jan or Feb, missing out on people who sandbagged their upgrade until the holiday season. If people are happy with their Droids, then that's a loss from Apple in selling them iPhones. Also, a lot of folks on other networks will be beyond their 30-days and will either have to wait longer for a CDMA iPhone or pay an ETF to switch.



    But the bigger question is about those 30 day exchanges...and correct me if I'm wrong. Verizon purchases the phones at full price from the manufacturers to sell to consumers (I'm sure there is some bulk discount deal, but you get the picture). Verizon takes a hit for every new phone it sales at a cheaper price and how they make it up is the 2-year contract. But the truth is, they are going to get creamed when a good number of those phones are exchanged within 30 days for the iPhone, which they also purchased for full price. Verizon can no longer sale those returned phones as new and loses money because of the exchanges. When I worked for Sprint, they said the company loses about $170 for every handset that is exchanged or returned. Imagine that for thousands that would exchange what they got for Christmas for the iPhone 4.



    It just doesn't seem smart for either parties...
  • Reply 3 of 55
    rob55rob55 Posts: 1,282member
    Quote:
    Originally Posted by AppleInsider View Post


    Fortune joins a list of reputable news sources that have also confirmed that the iPhone will launch on Verizon's network in early 2011. Earlier this month, The New York Times, The Wall Street Journal, and Bloomberg all independently reported that Apple would release a CDMA version of its iPhone on the Verizon network next year.



    Man, if this turned out not to be true, all these "reputable news sources" would have egg on their faces.
  • Reply 4 of 55
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Chaseism View Post


    I know all signs point to this being true, but there is something that just bothers me...



    Why would Apple and Verizon release a CDMA iPhone after the biggest shopping season of the year? Won't both companies lose money on this?



    Off the top of my head...
    1. They won?t be able to begin to meet the needs of a large new carrier with many smartphone users until after the Holiday quarter.

    2. They won?t have it ready until after the Holiday quarter.

    3. They can?t even announce it until after the Holiday quarter due to contractual obligations with AT&T.

    If you look at the world of product releases there are announcements and releases in the months following the Holiday quarter so this wouldn?t be an unusual occurrence by any stretch. Why did Apple announce the original iPhone on January 7th 2007, instead of selling it months earlier?
  • Reply 5 of 55
    Quote:
    Originally Posted by Chaseism View Post


    I know all signs point to this being true, but there is something that just bothers me...



    Why would Apple and Verizon release a CDMA iPhone after the biggest shopping season of the year? Won't both companies lose money on this?



    Think about it... Apple releases the iPhone 4 in Jan or Feb, missing out on people who sandbagged their upgrade until the holiday season. If people are happy with their Droids, then that's a loss from Apple in selling them iPhones. Also, a lot of folks on other networks will be beyond their 30-days and will either have to wait longer for a CDMA iPhone or pay an ETF to switch.



    But the bigger question is about those 30 day exchanges...and correct me if I'm wrong. Verizon purchases the phones at full price from the manufacturers to sell to consumers (I'm sure there is some bulk discount deal, but you get the picture). Verizon takes a hit for every new phone it sales at a cheaper price and how they make it up is the 2-year contract. But the truth is, they are going to get creamed when a good number of those phones are exchanged within 30 days for the iPhone, which they also purchased for full price. Verizon can no longer sale those returned phones as new and loses money because of the exchanges. When I worked for Sprint, they said the company loses about $170 for every handset that is exchanged or returned. Imagine that for thousands that would exchange what they got for Christmas for the iPhone 4.



    It just doesn't seem smart for either parties...





    There is a huge pent up demand for a Verizon iPhone. I will probably switch from my Droid to the iPhone ( if any of this is true. I still have my doubts ). I suspect a lot of people currently using a Droid will switch as well. The problem is that the new Android phones are now as locked down as the iPhone. It was the one real reason why someone might want an Android phone over an iPhone. Also the last majoy Androidn Update ( Froyo ) broke several major features. For example, most phone can no longer log into a infrastructure Corporate Wifi. It is just a bug in Froyo, but Google is not going to offer a fix any time soon. They destroyed the audio quality of any streaming service that uses AAC+ encoding. I used to love Pandora. The audio quality is so bad with Froyo, I can't stand to listen to it any more. There are many other issue like this with the latest Android update and Google is doing NOTHING to solve the issues. The only area where Android is better than the iPhone is:



    1) Google Maps and navigation is significantly better in Android.



    2) The Voice Commands are excellent in Android.



    3) I like being able to mount the phone as a USB drive to move files back and forth...



    4) You can customize the appearance of the Android phones more if you want to ( not a big deal.. )



    Other than that, the iPhone wins hands down...



    I think Apple will sell a several million right off the bat....
  • Reply 6 of 55
    Prediction: White iPhone is released on Verizon first, providing yet another incentive to switch to Verizon from AT&T.
  • Reply 7 of 55
    wigginwiggin Posts: 2,265member
    If events portrayed in the article are even close to true, that means the relationship between Apple and Verizon has been far less contentious than people have claimed for the past three years. So their first attempt at a partnership didn't work out. It happens in business all the time with neither insult or injury. They stayed in touch, and when the opportunity came about again, they worked out a deal.



    The most interesting point of the story (if you read the whole thing because AI didn't include it) was the claim that Apple was borderline admitting that partnering with ATT was a mistake due to the problems with ATTs network.



    Quote:

    AT&T and Apple were fielding complaints about dropped calls and network delays for iPhone users. McAdam, who was CEO of the Verizon Wireless joint venture at the time, went for the kill. (For more on McAdam, who becomes Verizon CEO next year, see box above.) He called Jobs in December 2007 and told him, "We really ought to talk about how we do business together. We weren't able to [reach an agreement] a couple of years before, but it's probably worth having another discussion to make sure we're not missing something." Jobs, according to McAdam, replied, "Yeah, you're probably right. We have missed something."



    Quote:
    Originally Posted by Chaseism View Post


    I know all signs point to this being true, but there is something that just bothers me...



    Why would Apple and Verizon release a CDMA iPhone after the biggest shopping season of the year? Won't both companies lose money on this?



    Quote:
    Originally Posted by solipsism View Post


    Off the top of my head...
    1. They won’t be able to begin to meet the needs of a large new carrier with many smartphone users until after the Holiday quarter.

    2. They won’t have it ready until after the Holiday quarter.

    3. They can’t even announce it until after the Holiday quarter due to contractual obligations with AT&T.

    If you look at the world of product releases there are announcements and releases in the months following the Holiday quarter so this wouldn’t be an unusual occurrence by any stretch. Why did Apple announce the original iPhone on January 7th 2007, instead of selling it months earlier?



    I'm thinking #1 and #3 are the most likely. And Apple operated like this for many, many years as the old Madworld convention was always held in early January with big announcements of new Apple products right after the holiday buying season.
  • Reply 8 of 55
    Then why is Apple´s stock going down the tube this week?
  • Reply 9 of 55
    I don't care. This is the most tiring iPhone related story in the universe. I bet these rumors and reports take up 10% of the history of iPhone 'news.'
  • Reply 10 of 55
    ruel24ruel24 Posts: 432member
    Quote:
    Originally Posted by sranger View Post




    1) Google Maps and navigation is significantly better in Android.



    2) The Voice Commands are excellent in Android.



    3) I like being able to mount the phone as a USB drive to move files back and forth...



    4) You can customize the appearance of the Android phones more if you want to ( not a big deal.. )



    Other than that, the iPhone wins hands down...



    I think Apple will sell a several million right off the bat....



    There are definitely some benefits to the Android, but I'm really not liking any of the MotoBlur and Sense crap. Every Android phone I pick up has a hesitation from when you touch the screen to when something happens. I know you can remove or cut down MotoBlur, but this just feels cheep. Second, I don't trust the wireless carrier at all, and don't like my phone being at the mercy of them or Motorola/HTC. It just makes sense for them to keep you buying phones and Android upgrades are hit and miss. I'm willing to guarantee you that the next version of Android, Gingerbread, won't be on the original Droid without rooting it, and the rollout of upgrades to other phones is a slow process.



    Apple has a regular upgrade interval I can live with and is available immediately to all iPhone users, and the iPhone is a quality piece - not all plastic-y and cheap feeling. Besides, I'm comfortable with my iPod Touch and it'll be a no-brainer to go to the iPhone.



    One thing I wonder is about Verizon's 4G. I live in an area where 4G should be out by year's end, and want an iPhone that supports it. I guess I'll have to wait for iPhone 5 in June/July?
  • Reply 11 of 55
    The one thing missing from the Fortune article, is the other reason why Apple and VZ talked towards the end of 2007... that would be the obvious need for Apple to switch from the (then new & novel) revenue sharing deal, to a more normalized subsidized accounting method. That was caused by the huge number of gray-market sales of the original iPhone, after it went on sale in mid-2007 (some estimates were 30%). Many, if not all, of the gray market iPhones ended up in east Asia. For a more recent example of the same behavior, note how Apple had to restrict the number of iPhones per customer at the stores in China (due to resellers wanting to grab large quantities).
  • Reply 12 of 55
    One more thing....



    I know that Verizon is losing customers to AT&T. I have three friends who left Verizon simply to get the iPhone...



    I do not know of a single person who left AT&T just to get a good Android phone ( the AT&T Droids suck )....



    The ONLY reason people are on Verizon is that they have a much larger coverage area ( Especially 3G )...
  • Reply 13 of 55
    I think this "rumor" is true. Apple whispers information to its favorite columnists to get the word out on upcoming releases in order to influence current buyers. So Apple is trying to get the message across so that it can minimize the number of Verizon DROIDs under the tree.
  • Reply 14 of 55
    ruel24ruel24 Posts: 432member
    Quote:
    Originally Posted by sranger View Post


    The ONLY reason people are on Verizon is that they have a much larger coverage area ( Especially 3G )...



    That statement isn't completely true. It depends on where you live as to your signal. I was on a job in Mt. Vernon, IN and I had absolutely no signal in some areas and a weak one in other areas on my Verizon network. A friend had an iPhone and had a full line of bars and no trouble watching videos or anything. Just because Verizon's map looks a little more impressive doesn't mean you're better off where you live. I live in a fairly large market in Cincinnati, and get good service on both, so it doesn't really matter.
  • Reply 15 of 55
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by jwdawso View Post


    I think this "rumor" is true. Apple whispers information to its favorite columnists to get the word out on upcoming releases in order to influence current buyers. So Apple is trying to get the message across so that it can minimize the number of Verizon DROIDs under the tree.



    Which rumour are you referring to? The rumour of a Verizon iPhone or the rumour that Apple ?whispers? impending releases to influence buyers not to buy their current products while simultaneously weakening the grand reveal of their many special events?
  • Reply 16 of 55
    Yeah, sure... they "confirmed" it. LOL! Probably by reading the other articles "confirming" it.
  • Reply 17 of 55
    Quote:
    Originally Posted by Rob55 View Post


    Man, if this turned out not to be true, all these "reputable news sources" would have egg on their faces.



    Which would be instantly forgotten, just like Shaw Wu or Katy Huberty's lame analyses.
  • Reply 18 of 55
    Quote:
    Originally Posted by Hal 9000 View Post


    Then why is Apple´s stock going down the tube this week?



    You can thank the Federal Reserve for their glorious "Quantitative Easing", which is easing us right into a ditch.
  • Reply 19 of 55
    Wake me up when it happens. That's when I'll care.
  • Reply 20 of 55
    What money Verizon's marketing involves taking a pop at Ma Bell?



    How about this:



    Quote:

    The iPhone,

    for years it has been trapped on AT&T,

    on a patchy network,

    dutiful dropping all your calls.



    When it could have been doing so much more

    Starting today, the iPhone will be set free,

    And get to live life,

    on Verizon.



    Imagine the Possibilities…



    You think Apple would let them!?
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