This fall is looming as AT&T's Waterloo, Armageddon, pick your end-of-the-world metaphor, with a Verizon iPhone reportedly arriving later this year that would end AT&T's exclusive deal for the Apple device going back to 2007.
The iPhone, of course, has been's the carrier's growth engine, driving new contract wireless sign-ups and giving it the lead in U.S. smartphone market share. In the fourth quarter of 2009 alone, AT&T reported 3.1 million iPhone activations, with more than one-third of those coming on as new subscribers.
So what's AT&T to do without a monopoly on its high-tech meal ticket? On the upside, sharing the iPhone to Verizon or any other operator would relieve AT&T of some of the data traffic that's overwhelmed its network and led to well-documented complaints by iPhone customers in New York and San Francisco.
What's more, handing the data-gulping Apple device to Verizon will finally put the carrier's vaunted network coverage to the test. Can it handle the iPhone's network demands without triggering a similar backlash from subscribers dealing with dropped calls and balky Web access? If not, AT&T could then unleash a new round of attack ads highlighting the problems and trying to puncture Verizon's reputation for reliability. Hopefully, no one would notice the hypocrisy.
Beyond that, AT&T still has its arrangement to be the U.S. 3G network provider for the iPad to fall back on (for customers that don't choose the Wi-Fi-only version of the Apple tablet). AT&T CEO Randall Stephenson has said he doesn't expect the iPad to bring in many new subscriptions because most iPad users will opt to use Wi-Fi instead.
But if the added network demand from the iPad proves more of a strain than expected, any lessening of iPhone traffic because of Verizon also getting the device would clear up more bandwidth for the iPad -- sure to be a data hog in its own right with a larger screen for game-playing and watching video.
Any new iPad subscriptions would also help make up for a decline in new iPhone customers. Analyst estimates for 2010 sales of the iPad range from nearly 3 million up to 10 million. So it's time for AT&T to stop worrying and learn to love the prospect of a Verizon iPhone.