Verizon-Apple iPhone agreement 'may not ever get resolved'
Struggles between Verizon and Apple are a sign that a deal to bring the iPhone to Verizon's network may never happen, even once the carrier's high-speed 4G network is established, one Wall Street analyst has said.
Mike Abramsky with RBC Capital Markets said in a note to investors Friday that he believes Apple is likely to turn to T-Mobile and possibly Sprint in the U.S. to counter the expansion of phones running the Google Android operating system. But comments made by Verizon's chief executive this week could be a sign that the nation's largest wireless carrier still cannot reach a deal with Apple.
"Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network," Abramsky wrote. "And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."
He continued: "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."
Last October, Google and Verizon announced a partnership in which they would help to create, market and distribute products running the Android mobile operating system. Verizon's push has helped Android grow exponentially in the U.S. smartphone market.
Abramsky said he believes that recent reports of a CDMA iPhone set for manufacturing in December could be destined for other carriers around the world, including KDDI in Japan, China Telecom, and Mexico's Telefonica. Verizon also runs a CDMA network, but it's possible the carrier cannot reach a deal with Apple.
The analyst said the impact of a delayed Verizon iPhone, or no iPhone on its network at all, would be minimal to Apple's stock. Abramsky had previously predicted that Apple would sell between 6 million and 8 million iPhones on Verizon's network in 2011, though the addition of T-Mobile and Sprint could add between 4 million and 5 million sales.
He also said he's heard that the iPad could possibly come to Verizon in the first half of 2011, but cautioned that he has not "confirmed" the rumor. RBC Capital Markets has currently forecast sales of 24 million iPads next year.
In recent months, numerous rumors have claimed that Apple will release a CDMA iPhone, compatible with the Verizon network, in January of 2011. A CDMA variant of the iPhone has reportedly been in testing, and in August was said to be just two steps away from production.
Mike Abramsky with RBC Capital Markets said in a note to investors Friday that he believes Apple is likely to turn to T-Mobile and possibly Sprint in the U.S. to counter the expansion of phones running the Google Android operating system. But comments made by Verizon's chief executive this week could be a sign that the nation's largest wireless carrier still cannot reach a deal with Apple.
"Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network," Abramsky wrote. "And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."
He continued: "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."
Last October, Google and Verizon announced a partnership in which they would help to create, market and distribute products running the Android mobile operating system. Verizon's push has helped Android grow exponentially in the U.S. smartphone market.
Abramsky said he believes that recent reports of a CDMA iPhone set for manufacturing in December could be destined for other carriers around the world, including KDDI in Japan, China Telecom, and Mexico's Telefonica. Verizon also runs a CDMA network, but it's possible the carrier cannot reach a deal with Apple.
The analyst said the impact of a delayed Verizon iPhone, or no iPhone on its network at all, would be minimal to Apple's stock. Abramsky had previously predicted that Apple would sell between 6 million and 8 million iPhones on Verizon's network in 2011, though the addition of T-Mobile and Sprint could add between 4 million and 5 million sales.
He also said he's heard that the iPad could possibly come to Verizon in the first half of 2011, but cautioned that he has not "confirmed" the rumor. RBC Capital Markets has currently forecast sales of 24 million iPads next year.
In recent months, numerous rumors have claimed that Apple will release a CDMA iPhone, compatible with the Verizon network, in January of 2011. A CDMA variant of the iPhone has reportedly been in testing, and in August was said to be just two steps away from production.
Comments
Let me guess. Verizon wants to maintain its nickle-and-dime-to-death approach to charging customers for cellular services (like visual voicemail) and Apple won't settle for it.
That's exactly what I was thinking too.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
Because LTE rollout and coverage will take much longer than until the end of next year to finalize to the point that you'd never have to drop down to 3/2G. And that means CDMA support in Verizon phones for years longer.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
That's exactly what I was thinking too.
As I understand it:
-- 4G will be phased in over a number of years
-- CDMA will be the fallback for those carriers as Edge is to 3G on ATT
-- it will take at least 10 years before CDMA is phased out
So, on current CDMA carriers, the phone would need to support both 4G and CDMA.
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For a review of Verizon's experience, read this morning's Washington Post review
I love this snippet ...
So if I had to buy from among these three, I'd get the Droid 2. And I'd root it almost immediately to take out Verizon's trash.
Let me guess. Verizon wants to maintain its nickle-and-dime-to-death approach to charging customers for cellular services (like visual voicemail) and Apple won't settle for it.
It'll be interesting to watch just how far, and with how many phones, Verizon will go with cutting Google out of the loop entirely with Android forks, to allow themselves to do just that.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
That's exactly what I was thinking too.
I can't see Apple shipping an iPhone that would be obsolete so soon. I would expect that if it did ship a CDMA phone, it would be one where LTE could be activated by a software update when the infrastructure is in place.
I wouldn't put it past Verizon to want to set up their own app store and their own custom "features" for the iPhone which Apple would not agree to.
That would put the parties, as a friend of mine would put it, between a rock and a hard on.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year.
Coz 4G is being gradually rolled out and won't be complete til 2012 probably.. Same can be said of other manufacturers. Why would Motorola, HTC, etc keep making CDMA phones?
CDMA vs. GSM is not the issue. It's Verizon's determination to control the phone experience vs. Apple's determination to control the phone experience.
Sounds just like all the clone computer makers. My new Mac comes with zero crapware preinstalled, just like my new iPhones. Can't blame them...it is impossible to make much money from the cloner market...nothing to differentiate your product, whether it is Android or Windows Phone 7.
Verizon, like the other telcos, has no clue how to write software, yet think they do. Just be a dumb pipe Verizon...that is all you are somewhat good for.
CDMA vs. GSM is not the issue. It's Verizon's determination to control the phone experience vs. Apple's determination to control the phone experience.
For a review of Verizon's experience, read this morning's Washington Post review
+1
Apple wants to partner with pipes.... Verizon wants to partner with, figurative, and now literally, mindless phone mftr droids.
And they have the right to do that.... It's just that Verizon's experience sucks.
In the end, Apple will win out on that front. Why would the average (strike that, common) user buy android phone when you have to become a hacker to make it do what you spent $$$ to do what you wanted it to do.
As walled the garden is... Apple's flowers smell sweeter to the high value (to carriers) smartphone demographic.
Correct me if I'm missing something, but why should Apple bring out a CDMA phone to the states in January when all the carriers will be on 4G by the end of the year?
CDMA runs in other markets than the US, and as others said, moving to LTE wil take a while.... Now, the question is, will Sprint take on the US WiMax/CDMA iPhone4.5 mantle?
I wouldn't put it past Verizon to want to set up their own app store and their own custom "features" for the iPhone which Apple would not agree to.
or make the negotiation something that says "we'll give you the same subsidy as ATT only if you give us the app store on 'our' iPhone'
Apple wants only one UX. Verizon may as well ask for Steve Jobs First Born Son, as they'd more likely get that than any Verizon Branding any control of the app store on the phone.
Although it's clear ATT and Verizon have better service(s) than Tmobile and Sprint, the latter set have much better prices. I would really like to see an iPhone with a smaller monthly fee. This has been my biggest obstacle so far.
That's been my beef all along too and now that I have an iPad 3G and LOVE the AT&T reception and customer service I receive, why would I want another data payment plan being on ANY carrier.
Apple needs to look at the dumb phone market. I wonder how many out there would love to have a sleek looking phone with a cool interface (no plastic buttons), great iOS, and with wifi, still get some of the benefits that apps may offer but not a mandatory need for the user.
I'm still using a 6 year old plastic button phone from Sony-Ericsson but would jump at the chance for an Apple iPhone I just described. I cannot see me getting an iPhone smart phone and having yet another data plan (when I have enough)... have cable broadband at home ($40.00), AT&T Unlimited for iPad ($30.00), and iPhone ($15.00 lowest minimum data plan rate)... I'd rather keep the $15 x 12 months = $180.00 in my pocket thank you.
Back to the rumored report of this story if true, I wonder if Apple will run a Christmas tv commercial showing the "Land of Misfit Telcos" and have T-Mobile and Sprint logos, along with AT&T in Santa's bag and the iPhone driving the sleigh and have it taking off and have the Verizon logo chasing after it and then slumps and sighs in disgust when it gets left behind for the second time!...
Let me guess. Verizon wants to maintain its nickle-and-dime-to-death approach to charging customers for cellular services (like visual voicemail) and Apple won't settle for it.
They want to equip VCAST into the iPhones with an Verizon branded logo in them.
CDMA vs. GSM is not the issue. It's Verizon's determination to control the phone experience vs. Apple's determination to control the phone experience.
For a review of Verizon's experience, read this morning's Washington Post review
I love this snippet ...
It'll be interesting to watch just how far, and with how many phones, Verizon will go with cutting Google out of the loop entirely with Android forks, to allow themselves to do just that.
I can't see Apple shipping an iPhone that would be obsolete so soon. I would expect that if it did ship a CDMA phone, it would be one where LTE could be activated by a software update when the infrastructure is in place.
I wouldn't put it past Verizon to want to set up their own app store and their own custom "features" for the iPhone which Apple would not agree to.
That would put the parties, as a friend of mine would put it, between a rock and a hard on.
I am not a fan of conspiracy theories... But something is going on!
1) Google and Verizon are plotting to form a US advertising / carrier services monolith -- possibily forming a joint venture with spinoffs from each.
2) Microsoft and Verizon are teaming up to hang Google with the free rope (Android) provided by Google.
3) Apple and Google are playing at being frenemies but secretly working together to break the carrier domination of the US cell industry, and cable company domination of access to the Internet and content.
4) Some other combo that has yet to surface.
5) None of the above -- i'm just imagining things.
Of all of these, the one that seems least likely, but makes most sense [to me] is an Apple-Google arrangement.
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"Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network," Abramsky wrote. "And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."
He continued: "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."
Much ado about nothing... This is pure speculation.
"Verizon may not accept", "Apple may not want", [Apple] "may be unwilling to accept", "This may or [may] not ever get resolved", all of these expressions indicate pure speculation by Mike Abramsky.
No news here, and few facts. Sorry.