Apple-Verizon Political Calculus, 2010 Edition
daringfireball.net >>Verizon and Apple are both in strong positions they might want each other, but neither yet needs the other.
Being locked to AT&T has greatly reduced Apple's market share and it is the only reason why more US customers are now buying Android phones than iPhones.
Verizon will continue to be the #1 US carrier without the iPhone. However, if Apple continues its exclusive arrangement with AT&T for a very long period, Android will continue to gain new-smartphone market share at Apple's expense. That will also mean that more developers will migrate to Android. All of this will hurt Apple in the long run.
I have always thought this, and its just my opinion, but it makes a lot of sense.
Why would apple just now begin to offer a CDMA iPhone when LTE technology is just around the corner (early next year / kinda right now)?
When the original iPhone came out, there were reports of 100+ field testers testing the iPhone for at least a few months. So it begs to reason that Apple would at least require a few months worth of testing before it had a model that was suitable for production on a CDMA network.
You would think someone would have heard / seen someone with a verizon iphone if it was being tested.
If Apple waits until September (as Gruber guessed), why not wait a few more months and release a CDMA in June 2011 when your not working on the biggest change in operating system to date (iPhone / iPad OS 4)
Because it will take a long time for that technology to be common, throughout the US.
On top of that, creating a CDMA iPhone would be a tiny amount of work, they would be crazy not too.
The only thing stopping them is the huge leverage they have over ATT, which they would not have over at a Verizon. We are not sure what special favors Apple get from ATT, but they are huge. If you look at the numbers, the growth of ATT has pretty much been due to just the iPhone.
And Apple probably employs more than one person, so they can afford to work on different areas at different times (CDMA and iPhone OS 4.0).
Why not wait, because the lose millions of dollars a day that the iPhone is not on Verizon.
CDMA speeds are good enough for most people right now. LTE is exciting but it will probably be years before consumers are making buying choices based on LTE support. Apple did launch the original iPhone without 3G so they have a track record of making some conservative engineering choices. Verizon is doing an LTE overlay on top of their existing CDMA network so any future Verizon iPhone will almost certainly be an LTE/CDMA hybrid. From an RF perspective I would think engineering a handset to operate at 700-850Mhz for CDMA and LTE in the future is easier than even current GSM designs around the world. A future LTE/GSM iPhone is going to need antennas tuned for 850Mhz, 1900Mhz, 2.6Ghz, etc.
I had always been under the impression that LTE would create an ubiquitous network that would finally consolidate all of the extra man-power of cdma / GSM engineering, but I stand corrected.
I do, however, think that 2011 will be when the Verizon iPhone is debuted. The supposed deal Apple has with AT&T is lucrative now, and as time passes, Verizon will offer a sweeter deal since it stands to get more and more wireless "switchers" as the iPhone attracts more users and gains more momentum.
When the original iPhone came out, there were reports of 100+ field testers testing the iPhone for at least a few months. So it begs to reason that Apple would at least require a few months worth of testing before it had a model that was suitable for production on a CDMA network.
Just asking: Did anyone confirm the iPhone Gizmodo found contained a GSM chip aside from Gruber: According to Gizmodo, one of the barcodes attached to the unit read “N90_DVT_GE4X_0493”. According to several sources (of mine) familiar with the project, “N90” is Apple’s codename for the fourth-generation GSM iPhone, slated for release this June or July. http://daringfireball.net/2010/04/gizmodo_prototype_iphone
From what I have read, There are serious technical difficulties getting voice working properly over LTE. So, any near-term rollout is going to likely include CDMA for voice and LTE for data.
As for testing, now that the iPhone is on the market, it would be easy to have testers in the field with CDMA units. There would be nothing to draw attention to the devices because they would look like every other iPhone on the outside.
But imagine a hypothetical world where there was no Android, or where Android was utterly unsuccessful in the market. In that world, Apple would be in a much stronger position against Verizon — in that world, Verizon would need the iPhone.
A strong Apple does Verizon no good, regardless if they’re carrying the iPhone. Verizon’s interests are best served in a market where there are many phone makers — Apple, RIM, HTC, Motorola, Samsung, HP — none of which are in a dominant position.
Those two factors might mean that it's in Apple's best interest to wait, and only deal with Verizon once they are clearly going to win, and can dictate their terms. Whether they should do so hinges on whether or not they can beat the other platforms without access to Verizon's subscribers.
That's assuming Apple is "going to win". That's not a given, and not even likely. Android is here to stay, it's just a question of if it will catch up with the quality of the iPhone.
It seems likely that waiting will only weaken their position for at least 3 reasons:
1) Android is gaining market share (and new features, and more polish, etc) pretty rapidly.
2) MS hasn't even started their "comeback tour" with Windows 7 Phone Edition (or whatever the hell stupid name they settled on). And while it's easy to think you can discount MS (Win Mo sucked right?) they've got great name recognition and it looks like they're willing to pour megabuck into getting back into the mobile game.
3) Blackberry. I don't know why every article about smartphones has to be about Apple vs. Android when RIM still fucking OWNS them both in market share. They've had their thumbs up their collective buts for a while, but if they can get their act together there's no reason they can't remain competitive.
"Verizon’s interests are best served in a market where there are many phone makers"...
A simple application of commoditizing your complements. http://www.joelonsoftware.com/articles/StrategyLetterV.html
By that logic, though, Apple should aggressively be putting iPhones on all the major carriers - failure to do so is the probably the main reason there are more installed Android phones out there right now.
But I'm guessing AT&T is giving them an amazing deal, like a revenue share of the user's monthly subscription.
That's an interesting point, but don't two year wireless contracts and locked phones pretty much kill the commoditizing effect of being on every carrier?
CDMA is so last decade. If you travel the world GSM is the only way.
Yeah, but if you (just) travel the US, it sounds like CDMA is pretty sweet!
Yet, maybe someone can correct me if I'm wrong, CDMA is a key reason Verizon's service is much more reliable than AT&T's.
AFAIK, this isn't because of the underlying GSM vs CDMA technology. Verizon just has more towers around and better backend infrastructure to handle high loads.
Personally, I just wish somebody would start offering the iPhone, or any smartphone, on prepaid. Until then I'm sticking with my twenty-buck LG with the broken front screen.