iPhone for Verizon: Should AT&T Be Worried?
in Strategy & Trends | by Admin
Verizon customers with iPhone envy may finally get a chance to own one of these famous devices. The Wall Street Journal reports that Apple is developing a Verizon-compatible version of the iPhone, rumored to debut as early as this summer. If the news is true, AT&T will lose the exclusivity contract it has held with Apple for three years – a fact that won’t help in the fight between AT&T and Verizon. If Verizon does start carrying its own iPhone model, will AT&T be able to compete, or is the move to Verizon a sign that AT&T can no longer sustain the iPhone on its own?
Verizon boasts an impressive network, with nearly 6 million more customers than AT&T, even without the iPhone. Over the past year, it’s been no secret that AT&T’s network has become overloaded, coming to a head when Apple briefly paused iPhone sales in New York City. When a compatible model is finally available, Verizon will have a reliable network and some of the most popular smartphones around – RIM’s BlackBerry devices and the iPhone make up 68 percent of the U.S. smartphone market – making it hard for AT&T or any other carrier to compete.
A big concern over Verizon’s adoption is user experience — an area where Verizon could be inferior to AT&T. Verizon operates on a CDMA network, while AT&T uses a wireless technology called GSM, which allows for AT&T’s biggest selling point – the ability to surf the web and talk on the phone at the same time. For Verizon to offer the same feature, all CDMA technology would need to be overhauled, and it doesn’t look like that will happen anytime soon. Although customers may overlook this missing feature, AT&T will still have Verizon beat with their other smartphones.
Even without GSM and talk-and-text features, Verizon’s popular and dedicated network may help them retain their current customers and acquire even more from AT&T and other carriers. Back in 2007 when the iPhone was first released, 25 percent of iPhone buyers switched to AT&T from another network, writes CrunchGear. Who’s to say those 25 percent – and everyone who has switched since then – won’t switch again, this time to Verizon? “There is undoubtedly enormous pent-up demand for the iPhone on Verizon’s superior network,” a Bernstein Research analyst told MarketWatch. “iPhone availability will therefore mean an immediate acceleration for Verizon’s subscriber growth and, conversely, immediate share losses for AT&T.”
“…Regardless of how many customers either side gains or loses, the real winner will be Apple,” writes WSJ’s Martin Peers. With competition heating up with the Droid, Nexus One, and the coming HTC Evo, Apple’s expansion to Verizon will continue to give it a healthy advantage in the wireless market. With the iPhone’s Verizon debut, could the iPad come next? As long as Verizon continues to maintain a reliable network with the data-hungry iPhone and plays its cards right with Apple, it can certainly hold its number one spot for many years to come.