Friday, May 28, 2010

Don't count on a Verizon iPhone any time soon

Rumors about the iPhone coming to Verizon are sprouting up. Don't believe it, Verizon fans.

There are some fundamental reasons why a deal isn't imminent.

• Verizon's network runs on a wireless standard called CDMA, which is incompatible with AT&T's GSM network. It's not impossible to offer phones on both networks -- Research in Motion (RIMM) sells BlackBerry phones on every major U.S. network. But it wouldn't necessarily make economic sense for Apple.

• Apple (AAPL, Fortune 500) has proudly advertised that consumers can make calls and surf the Web simultaneously on the iPhone, but Verizon's CDMA network can't support that feature.

• Verizon is set to roll out its 4G network later this year, and AT&T will unveil its 4G network in 2011. Those networks will be on a new universal, global standard called LTE, making a 4G/LTE iPhone much more cost-effective for Apple and easier to sell around the world. That would make next year or even 2012 a more likely timeframe for debuting a Verizon iPhone.

• suppliers haven't given any indication that Apple is building a CDMA phone, according to Jagdish Rebello, principal analyst of communication systems at iSuppli.

• Apple has a five-year exclusivity deal with AT&T (T, Fortune 500), according to court documents, making it unlikely that the iPhone could come to Verizon before 2012.

• AT&T offers unlimited 3G access for the iPad on a contract-free basis for an average of about $22 a month. Because those sales only account for 15% of AT&T's data revenue, according to data tracker Trefis, it may be part of a bigger strategy.

"There is speculation that AT&T is offering attractively priced 3G data plans ... as part of a broader deal with Apple to maintain iPhone exclusivity for longer than the original agreement," Trefis said in a recent analyst note.

Read the full story at CNN Money By David Goldman, staff writer

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