NY Times Adds New Verizon iPhone Rumor

| Rumor

The New York Times has piled on to the recent raft of Verizon iPhone rumors, reporting Friday that Apple and Verizon will be releasing an iPhone for Verizon’s network early in 2011. The newspaper’s piece closely matches other reports that have circulated recently from mainstream newspapers like The Wall Street Journal.

The Times cited yet another unnamed source, specifying that said source was not an Apple employee, saying, “Apple and Verizon will begin selling the phone early next year, said the person, who agreed to speak on condition of anonymity because the plans were supposed to be confidential and he did not want to alienate his contacts at Apple.”

Said source may or may not be different from the multiple sources cited by The Journal, but a consistent picture has been building that Apple is working on a CDMA version of the iPhone 4, and that it was being built for Verizon’s network, as opposed to China Mobile’s (much, much, much larger) CDMA network.

The Times intimated that Apple was concerned about Google’s Android OS and its growing market share. The article also suggested that the impending arrival of Windows 7 Mobilewhateveritscalledthisweek would post a competitive threat to Apple’s iPhone.

Needham & Co. analyst Charles Wolftold the newspaper, “Windows phones should not be dismissed. They will be a major player in the market.”

The first Windows 7 Mobilewhateveritscalledthisweek are scheduled to be released later this year.

We’ve taken the liberty of mocking up what an Verizon iPhone might look like.

Verizon iPhone 4?

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Comments

Bryan Chaffin

I long scoffed at the notion of a Verizon iPhone, but have reversed course…twice.

At first, it seemed obvious that Apple liked the control it had with AT&T exclusivity.

Then it seemed that Apple was looking past the time when it had saturated aT&T’s maximum iPhone customer potential, especially after Steve Jobs said at this year’s D that there might be some benefit to offering the device on more than one carrier.

Then I swung back based solely on the notion of control, but this time with Verizon. Verizon is dead set again handset makers having the power, and they have always demanded the ability to cripple their devices and force side-loaded software on their phones. This was exacerbated in my mind when the news came that EU carriers were trying to figure out a way to wrest that control back away from Apple and Google (and to a lesser degree Android handset makers).

That seemed to play directly into Verizon’s own paranoia, in my mind, and it is for that reason, and that reason alone, that I don’t think these CDMA phones are destined for Verizon, but rather China Mobile.

Because the flip side of this control issue is Apple’s own control over the customer experience. I do not believe that Apple trade that control for market share. Couple with Verizon’s own obsessions, it seemed we were at an impasse.

If I’m wrong, and the evidence is mounting that such is the case, it is Verizon that has cried uncle.

We’ll see.

Tiger

I’m not fooled into thinking Verizon changed Apple’s mind about a CDMA phone. I think Verizon is the beneficiary of some serious largesse because China Telecom wants it too. That’s a MUCH bigger market. But then again, maybe Apple and Verizon have kissed and made up. Like we say in Development, No isn’t a No forever, it’s just a No for now.

(of course, a No to Flash is pretty much a No forever!)

BurmaYank

“The Times cited yet another unnamed source, specifying that said source was not an Apple employee, saying…”

This informant “...who is in direct contact with Apple…” sure has been granted a ton of credibility by the NYT and/or the WSJ (which I normally tend to give a lot of credibility to).  But, this time, it seems pretty clear to me that the NYT’s & WSJ’s judgement about their sources’ information should be considered no better than the Cheney-Rumsfeld-Wolfowitz-Perle-Feith White House?s judgement about the reliability/meaning of “Curveball’s” information.

Nemo

I was with Bryan in thinking that Apple and Verizon wouldn’t be able to get pass their cultural desire to control the smartphone, Verizon because it wants lock customers to its network, get the lion’s share of revenue, and have the direct relationship with the customer and Apple because it wants control the phone so that it can provide the best user’s experience; get the lion’s share of the revenue; and have the direct relationship with the customer.  Now the evidence is mounting that I was wrong and that Verizon and Apple reached a deal on the iPhone.

But the big question now is what that deal means for the iPhone.  Are we going to get the iPhone that Apple wants to make on Verizon’s network?  Or are we going to get Verizon’s version of the iPhone on Verizon’s network?  If the latter, that means that we are going to get the usual piece of crap from Verizon that is filled with Verizon’s nasty little tricks, which I hope that no one will buy.

Lee Dronick

But the big question now is what that deal means for the iPhone.? Are we going to get the iPhone that Apple wants to make on Verizon?s network?

If this happens at all I would think that it is Verizon who blinked first. The iPhone is selling very well and the number of users are increasing. Apple does’t need to cripple it in order to make more sales, but Verizon wants the iPhone.

Another thought.  AT&T has been building out and improving their cell system. The probably wouldn’t have done that without an exclusivity agreement with Apple. Apple turned AT&T Mobile around and they wouldn’t want to give up that cash cow.

My bet is that if there is CDMA iPhone in the works that it is heading to China.

BurmaYank

My bet is that if there is CDMA iPhone in the works that it is heading to China.

...and/or to Sprint.  But not to Verizon.

  (I agree with your thinking.  Of course, I must acknowledge, I might still be somehow as wrong here as I have been on occasion, but I just strongly doubt that my hunch is wrong here.  The NYT & WSJ could be wrong, once again.)

todd

So it just came out on fox news that apple has said that their will be an iphone on verizon early next year so thats that i guess

BurmaYank

If Fox “News” said it, it must be false.

BurmaYank

When asked about the possibility of the iPhone coming to Verizon during a Goldman Sachs investor conference, (Verizon CEO Ivan Seidenberg) replied, ?I think 4G will accelerate the process, and any other decisions Apple makes would be fine with us. Hopefully, at some point Apple will get with the program.?

On September 23rd, 2010, Nemo posted these thoughts about those comments, which I have just now re-read:

“Mr. Sidenberg?s comments are ambiguous… Does Mr. Sidenberg?s hope for an iPhone on Verizon?s 4G network mean that there is no deal in place for a CDMA iPhone on Verizon?s network this year or early next?? Does it mean that Verizon and Apple are close to a deal on the iPhone for Verizon?s 4G LTE network?? Or does it mean one of the other possible but unlikely inferences??

Mr. Sidenberg?s statements could mean any of those things, but it probably doesn?t, because of the laws on securities fraud.? Securities Fraud occurs when an agent or employee of a publicly traded company, who has authority to speak for the company, omits a material statement of fact, or makes a material statement of fact that is false or misleading, and the putative plaintiff trades on the basis of that omission or false or misleading statement and suffers losses.? It seems a reasonable interpretation of Mr. Sidenberg?s statement that there will be no iPhone on Verizon?s CDMA network this year or next.? If Mr. Sidenberg meant something different, he would be getting perilously close to line of committing securities fraud and arguably crossed that line, if Verizon does in fact have a deal in place for the iPhone.? People will trade shares of Apple, Verizon, and/or AT&T based on Mr. Sidenberg?s statement, and if that statement is deemed to be false or misleading, those who lose money on those trades may have case.?

So I think we can take Mr. Sidenberg?s statement at their most probable inference, that there will be no iPhone for Verizon this year or next and not likely until Verizon has sufficiently deployed its LTE 4G network to provide good nationwide coverage.

Well, now I’m wondering if Sidenberg?s “..and any other decisions Apple makes would be fine with us. Hopefully, at some point Apple will get with the program” might actually have been an acknowledgement of some more immanent prospects for an Apple-Verizon deal than any that would depend on Verizon’s LTE completion.

Still, I think it must have been Verizon that has blinked, if now we are seeing a workable solution emerge in this “Mexican standoff” between Apple?s & Verizon?s immiscible marketing policies.  I think that because I expect Jobs would insist that no mere financial profit from a Verizon iPhone could come close to compensating Apple for the loss of its soul which surrendering to Verizon’s standard marketing demands would require - that this abandonment of Apple?s bedrock wholewidget-control mantra would kill Apple?s whole Golden Goose.

Lee Dronick

Until such time as Apple announces it in a press conference or via a press release it is rumor.

Nemo

Gentlemen:  The reports from the NYT and WSJ and others are beginning to look like controlled leaks, so I think that the iPhone is coming to Verizon.  But the thing about controlled leaks is that they aren’t an official statements from either Apple or Verizon.  Verizon has been, I think, sufficiently ambiguous in its statements to stay just on the right side of securities law, while priming the market for an iPhone on Verizon in a way that will begin to inhibit sales of the iPhone on AT&T.  If you listened to Mr. Sidenberg’s earlier statements and concluded that the iPhone wasn’t coming to Verizon, you simply drew the wrong, though reasonable, inference.

However, I agree with Burma Yank’s opinion that Apple’s ceding control of the iPhone and, thus, of the user’s experience would be a lost of Apple’s soul for short term gain that will badly damage the iPhone franchise, because it will result in customers who would be furious with the typical Verizon crap and bad user’s experience that you see on Verizon’s Android phones.  This would be especially true of those customers who have experienced the true iPhone on AT&T.  Verizon’s supposedly superior network won’t be adequate compensation for most for an iPhone that is loaded with crapware and hobbled in the manner of the Samsung Fascinate.

Lee Dronick

The reports from the NYT and WSJ and others are beginning to look like controlled leaks, so I think that the iPhone is coming to Verizon.

Possible, the rumor probably has an effect on current sales of Android devices and to that end maybe Apple wants to keep the story alive. Switchers will be saying “I am not going to buy a ‘Droid, I’ll just wait until early next when I can get an iPhone on Verizon. I had AT&T service 10 years ago and it sucked.”

Nemo

While Apple’s target is the Android phones, Verizon’s target is AT&T.  So both Apple and AT&T benefit from these controlled leaks.  However, that several reputable news organizations are issuing the essentially the same report indicates credibility for at least two reasons.  One, as Mr. Martellaro has taught us, Apple has done this before, and this is consistent with Apple’s pattern of making controlled leaks.  And, second, the editors of the NYT and WSJ would only report this as a done deal, if confirmed from sources at either Apple or Verizon or both.  If those sources are lying, they won’t ever again be trusted by those editors, which means that the ability to make controlled leaks would be greatly impaired.

BurmaYank

Yes, you’ve convinced me, now, that it really seems more likely that these NYT & WSJ editors’ announcements of some kind of Apple-Verizon done-deal are trustworthy. 

So, how similar to AT&T’s iPhone could Verizon’s actually be? 

What aces could Apple play to make Verizon’s be basically identical?  How much more does Verizon really need the iPhone than Apple needs Verizon’s user-base (and its halo power)?  Did Apple have a deal with Sprint to bargain Verizon down with?  Why would Verizon blink?

How much Verizon hobbling/crapification could AT&T’s iPhone tolerate without significantly poisoning Apple (especially considering Apple’s history of permitting AT&T’s iPhone’s tethering to be hobbled).

Nemo

One thing to recognize is that, even if Verizon accepts the iPhone on Apple’s essential terms, it and Apple do very well.  Both dramatically increase their revenues and profits, as Verzion benefits by taking profitable market share from AT&t and takes away the principle device, the iPhone, that AT&T has used to maintain its growth and profits, and Apple benefits by being able to address a much greater share of the market and by taking market share from all other smartphones, particularly from Android. 

But these benefits are only certain, if Verizon accepts the iPhone as Apple wishes to make it.  The question then becomes whether Verizon will have the wisdom to let Apple control the iPhone and its apps and the App Store and branding and support for the iPhone, or whether Verizon will foolishly attempt to restrict and hobble the iPhone, as it is beginning to do with its Android phones.  If Verizon does the latter, it is quite possible that customer will reject the Verizon iPhone or, at best, view it as nothing more than a fungible smartphone.  That, of course, will be a disaster for Apple and quite possibly result in the failure of the iPhone on Verizon’s network, with the consequent maintenance of AT&T’s iPhone advantage, because it will have the only true iPhone, and with Android phone being unaffected by a Verizon-hobbled iPhone that doesn’t offer a significantly better user’s experience.

I don’t know what the iPhone on Verizon will be, and nothing in the leaks has addressed whether the iPhone on Verizon’s network will be the same as the iPhone on AT&T, with the only difference being the CDMA radio interface, or whether Apple will foolishly permit two different iPhones, with the one on Verzion hobbled in ways that don’t significantly distinguish it from Android.  That would be a disaster for Apple, and frustrate Verizon’s effort to take from AT&T one of its strongest weapons, but I’ve seen business leaders do stupider things, especially when they are striving for dominance.

Let’s hope not.

Bryan Chaffin

The point of my photoshopped iPhone was to show what it might look like if Apple were to cede control of the device to Verizon.

And though I vastly amused myself with that graphic, I really do NOT think Apple will cede that control. I do not believe that Apple will trade short term market share growth for the hole in the dyke such a concession would represent.

As for controlled leaks, I would posit that one company and one company only would benefit from said control leaks, and that’s Verizon.

I would imagine that they want to limit as many AT&T iPhone sales this holiday season as they can, as some of those not wanting to do business with Ma Bell will indeed hold off for a Q1 Verizon device when they would not have were these rumors not so rampant.

The funny thing is that when we have an apples to apples comparison (pun intended) of network performance we’ll likely find out that Verizon will have just as hard a time managing all those people who actually want to use their device as AT&T.

Worse, in fact, due to their slower top speed.

But, we’ll have to wait and see.

Lee Dronick

or whether Apple will foolishly permit two different iPhones, with the one on Verzion hobbled in ways that don?t significantly distinguish it from Android.

I can’t imagine Steve Jobs allowing that to happen.

Nemo

Well, Gents, I hope that you are right.  I also don’t believe that Steve Jobs would permit two different iPhones, each that provided two very different user’s experiences, with one iPhone’s experience being far superior to the other.  And a hobbled Verizon iPhone, as I discussed, supra, isn’t necessary for Verizon to greatly benefit by having the iPhone on its network.  So, from Verizon’s perspective alone, not even considering the benefit to Apple. Verizon should leave Apple to its own devices with its devices.

And Bryan, you have remember that, unless all of AT&T’s customers defected to Verizon’s iPhone or unless the demanded for the iPhone is far greater than anyone is anticipating, Verizon won’t face anything like the deluge network demand that AT&T has had to deal with for the iPhone for the past three years.

And Bryan, you seem to be of the view that these leaks won’t slow the sales of Android phones on Verizon, as potential customers wait to at least consider the iPhone.  There have been some empirical studies that suggest that there is strong demand for the iPhone among Verizon’s customers who have other smartphones.  But nonetheless you may be right, because these leaks haven’t penetrated the popular perception and have been mostly for the tech cognoscenti and analysts.  However, when Apple cranks up its marketing machine for a Verizon iPhone, then we should see some loss sales for Android.

Finally, I have one large caveat.  We won’t know that a deal is in place, until we get credible reports that Apple has indeed started producing CDMA-based iPhones, which won’t happen until Apple has an enforceable deal in place with some major CDMA carrier, for un-finalized deals can always fail.

Lee Dronick

because these leaks haven?t penetrated the popular perception and have been mostly for the tech cognoscenti and analysts

I have seen segments on both local and national TV news. They almost invariably leave out the word rumor.

K.C.

Yes it’s all conjecture but we’re geeks, that’s what we do. So….

One thing I think is certain is that Apple won’t allow Verizon to “hobble” their phone despite their evil tendency to do that.

Why?  Well, Apple is reported to be pretty much the leader in Smartphones (both in Number of Users and Customer Satisfaction).  Even if you look at the usage pie charts and see that they are all close, when you factor in that Apple is ONLY on AT&T currently while Android and RIM are multinetwork, the thought of the iPhone being on Verizon and AT&T makes it likely they would dominate the smartphone market.  Because of this and the fact that Verizon will likely charge and arm and leg for their limited data and everybody wins.

This would assume that there isn’t just a mass migration from AT&T iPhones to Verizon iPhones.  There will be some of that for sure but I also know many die hard Verizon users who have been waiting to dump their Androids for the iPhone as soon as it hits Verizon. 

In my case I’m a iPhone user.  Would I jump to a Verizon version of the iPhone?  Yes and no. Yes for what I assume would be a superior network/data experience on a pure Apple non-hobbled phone.  But I’m afraid I’m going to have to pay a 2nd mortgage to afford Verizon’s Limited DATA Plan vs. my Current Flat Rate Unlimited (I was a day one iPhone user with the old data plan).

At the end of the day for me it’s going to be economics.  I’ll have to weigh out the pros/cons.  There’s always hope that AT&T’s network will be snappier after a chunk offload to Verizon.

It’s certainly fun to speculate!  Like, maybe Windows 7 will take all of them down!  I know I’d like to get back to clubbing faster.  I loose so many dates updating my profile at clubs.  Sheesh.

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