Verizon in Talks with Apple!

Just reported on ZDNet is that Apple is talking to Verizon about …(wait for it, though you already know!) producing an iPhone!

Is this some great news or what! A truly nice phone on the very best network. Sounds like a marriage made in bean counter heaven to me. The stock price is rising as I write (for both Verizon and Apple).

image (now incontestably the largest cellular provider)

Apple is apparently talking to Verizon about a potential deal to build a CDMA version of the iPhone that would run on the Verizon Wireless network in the U.S. USA Today reports:

The New York-based telecom entered into “high-level” discussions with Apple management a few months ago, when CEO Steve Jobs was overseeing day-to-day business

It would only make sense that Apple would explore its options as it enters the last 12 months of its deal with AT&T. You’d expect Apple to approach other carriers (like VZW) as the iPhone market becomes saturated and sales begin to plateau. Especially given that its exclusivity to AT&T is often listed as one of the primary reasons why people won’t buy an iPhone.

You’ll remember that Verizon was Apple’s first choice to carry the iPhone in 2007, but VZW rebuffed Apple’s offer which required a cut of every customer’s monthly bill. AT&T was rumored to be second in line as was willing to agree to Apple’s financial terms and secured the deal. Was it worth it for AT&T? For certain.

AT&T added 4.3 million iPhone subscribers in the second half of 2008, 40 percent of whom were new to the carrier. AT&T Wireless CEO Randall Stephenson know this and recognizes the impact that the iPhone has had on his company. AT&T’s exclusive contract with Apple to carry the iPhone in the U.S. expires some time in 2010 and Stephenson has been openly groveling with Apple for an extension into 2011.

The problem is that CDMA and GSM phones are completely different beasts defined more by geography than technical superiority. Apple would need to completely re-engineer the iPhone hardware for CDMA, but I’ve heard that CDMA iPhones have lived in Apple’s labs for a while now.

Though I disagree about the technical differences with CDMA vs. GSM, I know that many times it is a simple matter of coverage, including the number of towers,  and Verizon certainly has the towers. With the acquisition of AllTel, there is no question of who is the big dog in cell coverage in the United States. The AllTel purchase also gave the entire network the “Friends and Family” promo, which is another nail in AT&Ts coffin, and a still greater reason to drop the home phone line.

It will be very nice to have more choices when looking for my phone replacement, and I’ll probably put the choice off until the iPhone shows up. I wonder how that this will affect the sales of the Blackberry Storm.

If you are a Verizon customer, it might be a good time to put off the bi-annual phone selection, waiting to see if another player, and great pricing plan, might enter the game.

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