• by Aaron Baar , January 11, 2011

Prepare for another round of the phone wars. Or more specifically, the iPhone wars.

Now that Verizon has officially announced it will carry the iPhone (thus ending AT&T's exclusive agreement with Apple), it will be up to the marketers to either win customers (in Verizon's case) or keep them from leaving (in AT&T's). The two companies, which tussled last year in a dispute over Verizon's "There's a map for that" -- mocking AT&T's publicized network problems caused by heavy iPhone data usage -- will face off again in the coming weeks.

"We are pleased to introduce millions of wireless users to the industry-leading iPhone 4 on the nation's most reliable network," said Lowell McAdam, president and chief operating officer of Verizon, at the company's press event in New York City on Tuesday. "This is an important step for the industry as two great companies join forces to give wireless customers one of the most important technological additions to the mobile landscape this century."

AT&T already made its preemptive strike against Verizon, asserting that its network is ultimately faster than Verizon's. "I'm not sure iPhone users are ready for life in the slow lane," a company representative told The New York Times in a statement. AT&T later issued statements pointing out that its iPhones -- because of technological differences between the competing networks -- would be the only ones to run apps while allowing phone conversations at the same time.

"In the short run, Apple and Verizon are going to benefit," P.K. Kannan, professor of marketing services and chair of the department of marketing at the University of Maryland's Robert H. Smith School of Business, tells Marketing Daily. "If, on the other hand, Verizon is not able to keep its promise of more reliable network quality than AT&T, the downside impact on AT&T will be minimal. While Verizon is likely to pick up more customers following the immediate release of its iPhone version, their network quality performance over time will determine the long-run impact on the competitive landscape."

Meanwhile, the other two major carriers, Sprint and T-Mobile, may find themselves increasingly marginalized. The upcoming war over who has the best iPhone and iPhone service only underscores the point that neither of the other two carriers have the popular device.

The biggest advantage that Sprint and T-Mobile may have is to tout the 4G capabilities of their other phones. T-Mobile has been running a campaign (that, not coincidentally, looks like Apple's Mac vs. PC ads) that points out that Apple's Face Time App for the iPhone 4 only works on Wi-Fi networks, while T-Mobile's can run virtually anywhere.

"I think, initially, both T-Mobile and Sprint will suffer when it comes to new subscribers," Devindra Hardawar, a writer covering telecommunications at Venturebeat.com, tells Marketing Daily . "I suspect T-Mobile will get hit less since its new ads are very effective and it also has newer Android offerings than Sprint."

With very little likelihood that Apple will come out with a 4G-enabled phone anytime soon, touting the products on those networks could be Sprint and T-Mobile's only chance to avoid becoming niche players, Kannan says. But even that may not be enough.

"The iPhone is not 4G. But the functionality that it has far surpasses the other phones. That makes it appealing to users," he says. "That's where the appeal of iPhone is. You've got to have a device that will provide applications for users that take advantage of the 4G speeds."