Verizon to start selling iPhone
Tuesday, January 11, 2011; 10:38 PM
NEW YORK - You can stop asking, "When will Verizon get the iPhone?"
One of the longest lock-ins in the technology business ended shortly after 11 a.m. Tuesday, when Verizon Chief Operating Officer Lowell McAdam told a crowd of invited journalists and analysts that Verizon Wireless would begin selling its version of Apple's iPhone 4 on Feb. 10.
Wireless users had been hoping for the news since not long after the iPhone's debut as an AT&T exclusive in the summer of 2007. Few gadgets have been tied to a single service provider in one market for that long, and few have been as coveted as Apple's smartphone.
Apple's move breaks open a monopoly that had drawn criticism among consumer advocates, terminates AT&T's most-favored-carrier status with the Cupertino, Calif., company and elevates Verizon as a new long-term partner for the maker of the iPhone, iPad, iPod and Mac computers.
"Today, two industry innovators are coming together to deliver something that consumers have been hungry for for years," McAdam said as he opened the event.
Apple Chief Operating Officer Tim Cook returned the compliment a few minutes later. "We have enormous respect for the company this team has built and the hard-won loyalty they've won from their customers," he said. "This is just the beginning of a great relationship between Apple and Verizon."
AT&T has a great deal to lose, with published estimates putting its potential subscriber losses to Verizon as high as 5 million to 6 million over the next two years. Its spokesman put out a consistent message Tuesday: "For iPhone users who want the fastest speeds, the ability to talk and use apps at the same time, and unsurpassed global coverage, the only choice is AT&T."
The arrival of the iPhone 4 on Verizon also resets the competitive equation between Apple's mobile devices and their biggest competitor, smartphones running Google's Android operating system.
Users who wanted a Web-capable device with access to thousands of add-on applications but did not want to sign up with AT&T have often gone with Android phones. Verizon pushed Google's software especially hard - NPD Group analyst Ross Rubin estimated that 70 percent of the carrier's third-quarter smartphone sales consisted of Android models.
But Rubin noted that Verizon is leaning on Android phones to launch its 4G - short for "fourth generation" - LTE mobile broadband service, while the iPhone 4 will only be able to connect to its much larger but slower 3G network. (Apple's Cook said during the news conference that LTE support would "force some design compromises that we wouldn't make" and would have delayed the iPhone's arrival on Verizon.)
Rubin also suggested that Android could get more support from an unexpected quarter: "AT&T will dive into Android as they lose their iPhone exclusivity."
Verizon Wireless, based in Basking Ridge, N.J., will start selling its version of the iPhone 4 on Feb. 10, although its current customers can pre-order it as of Feb. 3. A version with 16 gigabytes of storage will sell for $199.99 with a two-year service contract, and a 32 GB model will cost $299.99, almost exactly the same prices AT&T charges.
Would-be iPhone users on Verizon will need to sign up for a voice plan, starting at $39.99 a month, and data service, though the carrier isn't saying what that will cost. Most of its smartphone users now pay $29.99 a month for unlimited data access.
AT&T's voice plans cost about the same, but it stopped selling unlimited data service last summer and instead charges $25 a month for a maximum of 2 GB. Neither carrier includes text messaging in those plans.
Verizon is throwing in an extra wrinkle: a "Personal Hotspot" feature that lets you tether up to five devices to an iPhone 4's mobile-broadband service over WiFi, Bluetooth or USB connections.
Besides seeing "Verizon" next to the iPhone 4's signal-strength meter, there isn't much obvious sign of Verizon on this device. The demonstration phones made available to the media here had no Verizon applications added - a distinct difference from how Verizon has packaged its software on some Android phones.
Switching to a Verizon iPhone may not be as automatic or easy as ads may suggest. Disgruntled AT&T subscribers who haven't finished up their service contracts will have to pay early-termination fees if they want to switch. They also won't be able to bring their old iPhones to Verizon, since the two carriers use incompatible wireless technologies. In addition, they'll lose the ability to browse the Web over a mobile-broadband signal during a phone call, and the Verizon phone, unlike AT&T's, won't work in most foreign countries.
People who run out to buy a Verizon iPhone 4 on Feb. 10 will also be stuck in the front end of a two-year contract when the next version makes its usual appearance in the summer.
There's also the risk that Verizon's network will crumple under a stampede of new iPhone users, just as AT&T's did. That carrier's recurring network-capacity issues - and its failure to support such new iPhone features as multimedia messaging when Apple added them - helped lower its standing in the eyes of iPhone users.
Verizon's McAdam alluded to this in his remarks, saying, "We've made network quality the hallmark of the Verizon brand."
Spokeswoman Brenda Rainey made a similar point after the news conference. "We put over $6 billion in our network annually to upgrade and maintain it," she said. "We're very confident that our network is prepared."
The Verizon-Apple news left open the possibility of the iPhone appearing on other carriers. Although Cook described the arrangement as "strategic" and running multiple years, he added that it's non-exclusive. That doesn't mean we'll see a Sprint or a T-Mobile iPhone anytime soon, but it does raise the odds that customers of those carriers will start wishing for such a thing.
AT&T and Verizon customers, meanwhile, can find common ground in waiting for what now stands as the most elusive iPhone ever: the white version that Apple introduced alongside the black model last summer, and which remains mysteriously unavailable.