We've heard this one before, but Bloomberg has it on good authority
that Verizon Wireless will start selling iPhones by January. But, beyond fewer dropped calls, what are the implications of such a deal?
First and foremost, Apple will increase its
dominance in smartphones, UBS AG analyst John Hodulik tells Bloomberg. Indeed, adding Verizon Wireless to the mix -- in addition to AT&T, which has had an exclusive carrier deal with Apple since the
iPhone debuted in mid-2007 -- "is going to dramatically increase the number of devices [Apple] sells in the U.S., Hodulik says. "It's hard to ignore the quality issues that AT&T has faced."
As a result, "Adding a second U.S. carrier would blunt the competitive threat from Google's Android platform, which Verizon has been promoting heavily as its answer to the iPhone," reports
, referencing a new client report from Oppenheimer analyst Yair Reiner.
Getting down to brass tacks, Reiner writes: "In terms of the P&L ... an additional 12M units would
translate into $7B-plus in revenue" for Apple.
"It's clear that if Apple does actually want to compete with Android in terms of numbers (which it's not yet clear that they do -- they
may prefer to make more revenue per device sold instead), they're going to need to move beyond AT&T," writes TechCrunch. "The network is quite simply its biggest inhibitor to growth at this point."
Verizon Wireless finally getting its hands on the iPhone could also redirect the carrier's marketing efforts, which, by default, have gone towards iPhone rivals. "To combat iPhone envy,"
The Los Angeles Times writes
, "Verizon has been throwing its marketing might behind smartphones made by Motorola
and HTC running Google's Android software, under the Droid brand."
"Still," sounding a precautionary note
, MobileBeat writes, "iPhone owners and potential iPhone
owners who are unhappy with AT&T's mediocre service (especially in iPhone-dense cities like Manhattan and San Francisco) have had their hopes dashed before."
And even if the deal does
go down in January, a spike in iPhone sales could be dulled by AT&T's clever decision to make its subscribers eligible for an iPhone 4 a year before their contracts expired, according to All Things
Digital, citing comments from RBC
analyst Mike Abramsky.
Watch as ATT begins to lose customers while the sales curve for iPhones goes into a steeper rally (as will Apple stock).
So Apple's only problem (besides hardware issues) will be its isolationist attitude in a walled garden.
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I find some irony in the potential availability of better reception at the same time Apple brings out an iPhone model that has a design flaw that inhibits reception.