Verizon Finally Gets the iPhone [Updated]

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Verizon finally put an end to the rumors that it will carry Apple’s iPhone 4 on Tuesday with the announcement that the combination iPod and smartphone will be available in early February. The cell service provider made the announcement at a special media event in New York City.

It’s finally coming: The Verizon iPhone

The Verizon-compatible iPhone departs from the model that’s available from AT&T and other carriers around the world because it supports CDMA technology. All other iPhone models ever shipped only support GSM wireless technology, which isn’t compatible with Verizon’s CDMA network.

Verizon dropped a surprise on potential customers by announcing that it will offer MiFi-style tethering for the iPhone, which means customers won’t have to rely on Bluetooth or USB cables to share their wireless data connection with up to five devices over Wi-Fi. In comparison, AT&T’s limited tethering support supports connecting only a single device.

The company isn’t talking about data plan pricing yet, or how much customers will pay per month for their voice contracts.

In addition to confirming rumors that Apple has been working on a CDMA-based iPhone 4, the announcement also heralds the end of AT*T’s exclusive carrier agreement with Apple. AT&T was the first iPhone partner when the original model launched, and until now has been Apple’s only partner in the U.S.

Verizon will offer the CDMA-compatible iPhone first as a pre-order to its current customers starting on February 3, then on February 10 will open up for all potential customers. It will be priced at US$199.99 for the 16GB model, and $299.99 for the 32GB model with a two-year contract.

[Thanks to SlashGear and PCMag for early details.]

Comments

scott

which means customers won?t have to rely on Bluetooth or USB cables to share their wireless data connection with up to five devices over Wi-Fi

except it will drop that data to those devices when you get a call.  whoops!

daemon

I think Apple will sell no less than 20 million iPhones over the next quarter.

except it will drop that data to those devices when you get a call.  whoops!

I don’t think any of them will actually care. They’ve had Android handsets that dropped data with a call and very few of the people I know on Verizon cared that they couldn’t browse the internet while on a phone call.

geoduck

In the Q/A section it came out that the ViPhone will have the normal CDMA limitation: You can’t do Data and Phone at the same time.

How often and when would this be a problem?

I don’t have an iPhone so I don’t know how often or big an issue this is.

scott

In the Q/A section it came out that the ViPhone will have the normal CDMA limitation: You can?t do Data and Phone at the same time.

How often and when would this be a problem?

depends on how you decide to use the phone, but i think it’s a limitation on those that want to use it as a hotspot.  say you (or someone in your 5) are playing an online game on your laptop and get a call.  bye bye game.  wouldn’t happen on GSM.

b0wz3r

If they’ve forced that god-awful V-cast service onto it, I’ll stick with AT&T thank you.  There is absolutely no way I will buy into their substandard and overpriced content service.

I honestly don’t know what all the whining and complaining is about with AT&T.  Sure, I’ve had some dropped calls and there are certain places where I can only get an Edge connection, etc., but overall I’ve had better service with my 3Gs and AT&T than the last commodity phone (Sanyo; what a POS that was), with Sprint as the service provider.

vasic

The devil is, as always, in the details. We have yet to hear about the pricing (it’s not available on Verizon’s web site). That mobile hotspot feature will likely be an optional one (say, extra $20 per month). Verizon has been the undisputed world champion of nickle-and-diming, so we should not be surprised if all these extra features are charged separately.

vasic

There is no indication that Verizon has put ANY crapware on their own onto the iPhone. In fact, the image on their iPhone web site shows a generic iPhone without even the carrier name in the top-left corner, by the signal strength bars (it only says “3G”).

I have no doubt in Apple’s (Jobs’s) negotiating power. Verizon desperately needed the iPhone and has patiently waited for it. Apple had no need to add another carrier in the market where they were already struggling to make enough devices to satisfy the existing carrier. Luckily, this new carrier will receive phones made in a different factory (CDMA), so it won’t affect the output of the existing facility.

mlvezie

According to Verizon’s FAQ, the only extra app pre-installed on the phone is the tethering app. The rest of their crapware will be available in the normal app store.

As for data/phone together, it’s fairly common for me to use the internet on my iPhone while I’m talking to someone (“Hang on, I’ll look that up for you.”).

(Rumors of me checking Twitter while talking to my parents are exaggerated smile )

Ross Edwards

Verizon desperately needed the iPhone

Yeah, after all, without it, they only managed to build the largest customer base of any U.S. carrier.  This was definitely a last-gasp Hail Mary for them, otherwise it was straight to Chapter 7.

vasic

Well, you don’t need to be on the brink of Chapter 7 to see that your main competitor is gaining subscribers, and the only way for you to gain subscribers is to acquire other smaller carriers.

This wasn’t a tactical move for Verizon; it was strategic. There aren’t that many small regional carriers left for Verizon to acquire, in order to beef up their subscriber numbers. The only way to do that for them was to actually get people to switch from competitors, and without the iPhone, that was a difficult proposition. So, yes, they really, really needed that iPhone much more than Apple needed Verizon.

ethan

In regards to cdma limitation on concurrent voice/data:

It will be an issue for users who jump from ATT and go to V for the iPhone. As for already existing V users who opt to get the iPhone it will act like their current smartphone. The key is the ATT users as that is where V wants to gain subscribers: the switchers. Those users may not be pleased to this specific limitation on the cdma network.

Time will tell.

jas

Hey AT&T,

  The iPhone on Verizon’s network can be a mobile WiFi hotspot for up to 5 devices, while on your network, I’m forced to use USB or Bluetooth to a single device.  Can you hear me now?

Sincerely,
One of your iPhone Customers that may jump ship for a better deal elsewhere…..

Nemo

While it may be true that Verizon needed Apple’s iPhone a bit more than Apple needed distribution on Verizon, both Verizon and Apple needed to get the iPhone on Verizon.  Verizon could not halt AT&T’s expansion of it subscribers without the iPhone.  I believe that Verizon had hoped that Android would be an effective competitive alternative to the iPhone, but it just wasn’t, and that allowed AT&T not only to achieve rough parity with Verizon but threaten to surpass Verizon, as AT&T’s network improved, particularly after the evolution of AT&T’s network to LTE. 

Also, the appearance of Android on every other major carrier meant:  (1) that Verizon had to compete against Android everywhere, as well as against the iPhone on AT&T; and (2) because the market for mobile is growing so fast and has so far yet to expand, Android OEMs, notwithstanding the number of Android phones, were still able to force Verizon to pay top dollar to subsidize Android phones, around $520 for the top-of-the-line Android phones, which is much more than Verizon had expected.  So, if Verizon had to pay that much for Android, it might as well pay that much and perhaps just a little more for the iPhone.

Apple need to halt the expansion of Android’s subscriber base in the U.S. or at least ensure that the iPhone and its other iOS device remained the dominant mobile platforms in the U.S.  Notwithstanding that Android couldn’t give Verizon a weapon to halt the growth of AT&T’s subscribers and to force Apple to accept Verizon’s terms for the iPhone, subscribers using Android phones had grown to too great a number and were growing at too great a rate and for no reasons other than that they had greater distribution by being on every carrier, and because too many customers hate AT&T.  Apple had to stop or at least restrain Android’s advance by getting its iPhone on Verizon.

So both parties needed each other.  Verzion will be in a position to at least restrain, if not, halt the growth of AT&T’s subscribers and, as AT&T has, enjoy excellent profits from the iPhone.  Apple will make even greater, indeed outstanding, profits from the iPhone on Verizon and will, just as importantly, halt the advance of Android in its home market and secure the position of its iOS devices as the dominant mobile platform in that market.  Or at least, this is what Verizon and Apple expect to happen.

Bosco (Brad Hutchings)

Apple need to halt the expansion of Android?s subscriber base in the U.S. or at least ensure that the iPhone and its other iOS device remained the dominant mobile platforms in the U.S.?

Well, this won’t happen. Android is malleable enough to seep into bordering categories. iOS under control of Apple is not. You’ll see more Android powered TV sets come straight from the factory this year. You’ll see Android powered thermostats, WiFi foto frames, etc. It’s all a matter of component prices seeping under magical retails targets.

vasic

There is this fundamental difference between iOS and Android. Vast majority of developers who develop for both agree that development for iOS is significantly more attractive, for various reasons (unified platform, simple distribution system, significantly higher percentage of user base willing to actually pay money for apps, etc). As long as there is more quality development for iOS, it will remain more attractive mobile platform for consumers. There is no question that the Verizon iPhone will affect Android phone growth in the US. It is possible that the platform itself might make up for that difference on other disparate devices. This won’t help the platform attract developers all that much, since it will just serve to further fragment it.

I have no doubt that choices are good for consumers. However, even if Android does expand into toaster ovens, refrigerators and electric blankets, it wouldn’t mean much to mobile phone market, carriers or Apple.

Bosco (Brad Hutchings)

There is no question that the Verizon iPhone will affect Android phone growth in the US.

So in April or May, when the sales share and market share trends of 2010 are still continuing, what will you say then? We’ve been playing this game with every Unicorn that’s come along since January of last year, and this time, this Unicorn is going to fix everything and reverse the trends. I totally get why Apple fans wish for it to be true, but the Android game gets better and better each month because of intense competition within the ecosystem. Where’s your voice activated navigation? Slide out keyboard? Big screen? Built-in Google Voice?

mhikl

Great points, rationally put as always, vasic. Good discussion here.

I like to sleep with the windows open. If I were to get an Android electric blanket, I’d make sure I had an insulated liner.

Bosco, the grand soothsayer again and again looks into his turd and gives us another prophesy. Samo samo. His twisted tune sure stinks. Hate and spiel spewing spontaneously is his game, name n’ shame. Nothing new added. Only lame claims and blame.

Rumour has it in his youth he picked his nose, wet his sheets and swung cats into trees. I mean this in the most caring way.

Nemo

My dear Bosco:  The market share trends for April and May of 2010 didn’t survive the introduction of the iPhone 4.  Immediately after its introduction and notwithstanding Consumer Report’s incompetent and scurrilous second review of the iPhone 4, the iPhone 4 tore the markets worldwide up, even in the face of Android phones of all descriptions on every carrier, including AT&T.  (And in China, which is Android land, Apple has had to enact extraordinary measures to restrict excessive purchases and scalping of the iPhone.)  In fact, Android’s performance during that period was so inadequate in halting the iPhone and AT&T’s advance, that Verizon had to meet Apple’s terms, lest Apple turn to Sprint and T-Mobile to get increased distribution for the iPhone, which would have trapped Verizon as the only carrier in the U.S. without the iPhone, a position that Verzion realized was, given the iPhone’s winning performance in the market against Android, completely untenable. 

The only things that hold the iPhone back are the physical limit on Apple’s ability to produce it and the problem of distribution in markets where Apple has only been able to do a deal with a single carrier.  Apple has now dealt with that distribution problem in the U.S., so Eric, Larry, and Sergey strap on your helmets, because here comes the iPhone and the other iOS devices.

And I am afraid that Vasic has you on Apple’s iOS devices being the unquestioned choice of developers everywhere.  In fact, no reasonable person continues to dispute this point.  The lead developer for Angry Birds and nearly every other developer to speak have publicly said that trying to offer an app for sale or subcription on Android is a losing proposition.  They were often, though not always, too polite to state that the three reasons for this, which are:  (1) Android’s DRM model is so weak that apps are very often pirated and, thus, can’t be sold; (2) Google itself is hostile to apps for pay, because it wants to force all apps to use an advertising model, where it provides the ads; and (3) customers on Android have a too high proportion of “I must have my app for free, as in free beer” customers, who won’t pay for quality apps.  The result is that, as the leader of Angry Birds said, only the advertising model works on Android.

On the iOS, however, developers have an effective DRM model, a huge basis of potential customers, and customers who will pay for quality apps.  You also have an advertising model that is second to none and, in some ways, superior in its revenue potential to what’s available on Android.  So, as a developer for iOS devices, you have your choice of a pay, subscription, or advertising model or any combination thereof to make money from your app.  You also have great tools to develop your app.  And the irrefutable evidence of this is how developers have voted with their apps, especially developers who prefer or require a pay or subscription model for their apps, and the superior quality of the apps that are available on the App Store compared to the apps available on the Android Market.

Nemo

Now, now Mhikl:  Let’s have a civil discussion without ad hominem attacks.  Whether Bosco is alone in his views or persuades the majority, he deserves respect as long as he is civil and gives respect.  Even if he is wrong on the merits, as I believe he is here, he deserves a respectful hearing.

mhikl

He’s not civil. That’s the point. If you think you garner any brownie points by sticking up for his ilk, then you have forgotten the offensive polemics he has spat on others, yourself included, the last that I remember was again when you kindly tried to stick up for him.

mhikl

I had actually come back to tell you that you had made some very adroit and clearly presented facts and comments in your previous input but now I’m not going to tell you. So there.

RonMacGuy

I find it interesting that Verizon has already gone public with the fact that the only app they will force-feed Verizon iPhone users is the tethering app.  If this is the case, why force-feed an app that they are going to charge you for?  Maybe it is wishful thinking, but perhaps for iPhone 4 the tethering will be free since the app is going to be there on every Verizon iPhone.  If it is not free and included with the monthly service, then there better be a way to delete it or move it into a folder…

Nemo

Mhikl:  Bosco hasn’t been uncivil today, no matter what his conduct may have been in the past.  So, even if we stoop to mere reciprocity, then today we should all be civil in our discourse.  But reciprocity isn’t enough.  Even if Bosco were uncivil today, in the past, or on any future day, that is no excuse for any of us being uncivil in our discourse, because civility is moral obligation that we owe to each other, a personal moral obligation, and a reflection on each of our characters that is independent of what any one else does.  None of us can constantly live up to that moral obligation, and I know that I’ve have failed far too often for I have a bit of a temper, but let us try to civil here.  And if we fail today, let us try to succeed tomorrow or at least fail better.

RonMacGuy

I tend to agree with mhikl.  Bosco masterfully masks his personal insults well, but they are still insults.  I don’t mind people stating their opinions, but too often Bosco’s support of Android is too full of veiled insults of Apple and people who like Apple.  I truly don’t understand why he doesn’t hang out with his own kind, given his hatred of iPhone and iPad.  But alas, he refuses to answer that question.

mlvezie

Another possibility with the tethering “app” is that it’s just part of the preferences, like tethering is now. It’s also possible that it’s a feature of the new release of iOS, 4.2.5, that will be on the Verizon iPhone 4.

And if I may indulge in further wild speculation, it’s also possible that iOS 4.2.5 will be made available for AT&T iPhones (with the same tethering).

And that fluffy stuff forecasted for tonight might be powdered sugar!

(I’d better stop with the idle speculation)

vasic

Tethering and Mobile HotSpot are two sides of the same coin (internet sharing). They are part of the OS, v 4.3. The Mobile HotSpot is NOT a separate app. It is a feature of the OS that will be available to all iPhone users globally, as long as their carrier supports it (exactly the same as tethering, since two years ago). I would expect v4.3 to be rolled out between now and the day of the Verizon iPhone actual launch.

Verizon will NOT be putting any apps on the iPhone. The phone will apparently be identical in every conceivable respect to all others around the globe (except for the CDMA chipset inside).

vasic

Who would have ever thought that Verizon would stoop so low as to agree to become a dumb pipe for Apple? They must have wanted the iPhone really, really, really badly!

RonMacGuy

Yes, Verizon has stooped so low to carry the father of all smart phones.  How dare them.  A dumb pipe for a guaranteed 10M+ iPhones sales in 2011, all with 2 year commitments and carryon business once an LTE iPhone comes around.  Good business decision, if you ask me.

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