Mobile

Verizon iPhone: No Exclusive Content

1/11/2011 12:20 PM Eastern

Verizon finally pried the iPhone out of AT&T's grip -- with the former emphasizing its network's reliability and performance at the official launch here Tuesday -- but for now Verizon Wireless will not be offering any exclusive video programming or other content through the Apple smartphone.

In an announcement eagerly anticipated by tech bloggers -- as well as consumers fed up with AT&T's reportedly spotty 3G service -- Verizon Wireless and Apple announced that the iPhone 4 will be available on the wireless carrier's 3G CDMA network beginning on Thursday, Feb. 10. Qualified Verizon Wireless customers will have the exclusive opportunity to preorder iPhone 4 online on Feb. 3.

Verizon iPhoneThe iPhone on Verizon is "something consumers have been hungry for for years," Verizon president and chief operating officer Lowell McAdam said.

Verizon Wireless will sell two iPhone 4 models: one with 16 GBytes of storage for $199.99 and a 32-GByte version for $299.99 with a new two-year customer agreement. The carrier did not announce pricing for the iPhone data plans, saying that information will be made available later. AT&T has been the exclusive provider of the iPhone since its initial June 2007 launch.

But while Verizon Wireless iPhone 4 customers will be able to download more than 300,000 apps from Apple's App Store, none of the content will be exclusive, Verizon Wireless spokeswoman Brenda Boyd Raney said.

Meanwhile, even as Verizon has been touting its launch of 4G LTE, which offers download speeds up to 12 Mbps, in 38 U.S. markets, the iPhone will initially run only on 3G CDMA.

Apple chief operating officer Tim Cook, who spoke at the event, said the first generation of LTE chipsets would have forced some "design compromises" in the iPhone. Moreover, he said, "Verizon customers have told us they want the iPhone now... The most popular question has been, ‘When will the iPhone be able to run on the Verizon network?'"

Dan Mead, CEO of Verizon Wireless, asserted that the carrier's 3G network is "the best in the country" -- a claim hotly disputed by AT&T, which is expected to crank up the marketing volume in the months ahead to counter the loss of its iPhone exclusivity.

One feature exclusive to Verizon Wireless is that its version of the iPhone 4 will include a new "personal hotspot" capability, letting customers use the iPhone to connect up to five Wi-Fi enabled devices. But again, the company didn't divulge pricing information.

"We're not commenting on any pricing or pricing strategy changes today," Mead said. "But let me say this: We are going to have a very strong offer to attract customers to our network, and to drive the right mix in our business."

Verizon Wireless is expected to offer an unlimited-data plan with the iPhone, the Wall Street Journal reported Monday. That would be in contrast to AT&T Mobility, which moved to usage-based pricing plans for all smartphones in June 2010. AT&T charges $15 per month for a 200-MByte plan (with $15 for each additional 200 MB) or $25 per month for 2 GByte of data (with $10 for each additional gigabyte).

Cook said the multiyear agreement between Apple and Verizon Wireless for the CDMA iPhone 4 model is "not exclusive," but that may mean that Apple will supply the device to international carriers as well. Analysts expect Verizon Wireless and AT&T to be the two exclusive providers of the iPhone in the U.S. through the end of 2011, shutting out competitors including Cox Communications, Sprint and T-Mobile.

In a statement responding to Verizon's announcement, AT&T said, "For iPhone users who want the fastest speeds, the ability to talk and use apps at the same time, and unsurpassed global coverage, the only choice is AT&T."

AT&T pointed out that CDMA does not allow a user to talk and surf the Internet at the same time, whereas the GSM-based high-speed wireless data technology used by AT&T does. In addition, CDMA technology is not used by most wireless carriers in Europe and Asia.

Verizon Wireless, the largest wireless provider in the U.S. with more than 93 million customers, is a joint venture of Verizon Communications and Vodafone.

McAdam said the carrier began to have technical discussions with Apple in 2008 about bringing the iPhone to the CDMA network. The duo then spent a year in collaborative design and testing. Late in 2010, Verizon Wireless began offering the iPad, which helped the carrier's employees get familiar with Apple and its products, he said.

The Verizon Wireless press conference was held at the Time Warner Center, in the Frederick P. Rose Hall, Home of Jazz at the Lincoln Center. The standing-room-only event followed several days of speculation about the iPhone launch that had the digerati atwitter.

At the start of the event, McAdam quipped, "If the press writes something long enough and hard enough, eventually it comes true."

Verizon did not, as some observers expected, make the iPhone announcement at the Consumer Electronics Show last week. Industry analysts speculated that was because the company was focusing on LTE at CES -- and at least initially the iPhone will be a 3G-only device -- and also because of Apple's preference to make major announcements at standalone events.

Wall Street analysts forecast that Verizon Wireless could sign up between 9 million and 10 million iPhone customers this year. As many as 6.5 million of those could be subscribers leaving AT&T, according to Piper Jaffray analyst Gene Munster.

Research firm iSuppli forecast that Apple will ship 12.1 million CDMA iPhones through Verizon Wireless and other global CDMA wireless carriers in 2011. That will increase global iPhone shipments to 61.2 million units for the year, up 24.5% from the 49.1 million high-speed downlink packet access (HSPDA) and high-speed uplink packet access (HSUPA) phones offered by AT&T in the U.S. and other carriers worldwide.

 

 

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