Tuesday, August 17, 2010

The "Verizon" iPhone - If I were Apple

There have been rumors about a Verizon iPhone since the first day it went on sale as an exclusive AT&T phone in the United States 4 and half years ago. Recently, however, even major publications are buzzing with speculation. In common among pretty much all the rumors is that Apple is developing a special version of the iPhone just for Verizon in a bid to increase market share in the US.

I, however, have a different idea.
Apple has been making gangbuster profits on the iPhone. One of the main reasons that this has been possible (at least in the US) is due to the very lucrative exclusivity contract with AT&T -- Apple doesn't sell the iPhone for other networks and gets a kickback in return.

At the same time, the iPhone has grown to be number one in mindshare when it comes to smartphones. Everyone, and I mean everyone, has heard of the iPhone. Android, meanwhile, has enjoyed little brand recognition in the way of the mass public. Standing in the way of mass adoption, however, has been the exclusivity contract.

Most people, including John Gruber of Daring Fireball, posit that Apple is in no hurry to embrace Verizon and Verizon, with Android's recent successes, is in no hurry to embrace the iPhone -- at least not to the point of either side making concessions in their agreements.

Astute as Gruber's arguments may be, I think Apple has a winning hand. They don't need to go with only Verizon. If I were Apple, I'd make a CDMA version of the iPhone and put it on sale carrier free.

Now freed from the binds of specific carriers, customers will be abusing every wireless carrier support center in the US to get one. Armed with this new leverage, Apple can create a standard contract for all interested carriers tilted very much in their favor. Rather than face the support and PR nightmare of being the only carrier without the iPhone, every one of them will fall right into line.

Apple gets the market share and deals just as they want them. Everyone else gets the iPhones they've been waiting for.

For further reading on Verizon iPhone rumors, I highly suggest John Gruber's recent posts on the matter: