Apple iPhone on Verizon: Summer of 2010? | Recorded Future

Apple iPhone on Verizon: Summer of 2010?

January 4, 2010 • Jason Hines

The iPhone has been a huge success for not only Apple, but also AT&T – generating enormous profits, sizzle, excitement, etc. related to an agreement between the two companies for AT&T to be the exclusive distributor of the iPhone in the US.

The agreement is quite significant in its economic value, accordingly we might have expected it to have been disclosed as a significant event through the SEC, but the companies have been able to keep it secret. So accordingly there has been lots of speculation on when the agreement expires and when competitors to AT&T would get access to the iPhone.

Verizon Wireless would make a whole lot of sense since they have such a big network and many subscribers for Apple to dip into, whereas T-Mobile would make sense because of the instantaneous technology match – both AT&T and T-Mobile are UMTS based networks. Verizon Wireless’ partial parent company, Vodaphone, has recently started to distribute the iPhone in the United Kingdom.

Specifically there has been a lot of speculation on if/when the iPhone might be available on Verizon. It has been proposed that it might add 7 million incremental phones sold for Apple in the 12 months trailing such a release – and it would allow Apple to fend of the Android nicely.

For investors this could have impact on many holdings – it certainly impacts directly financial models of Apple (upside), AT&T (downside), RIM (downside), and Verizon (upside) – but also Google (who has a bet on Android on Verizon), T-Mobile, and others.

iPhone on Verizon with Recorded Future

We did an analysis in Recorded Future of the predicted launch date for the iPhone on Verizon – examing dates – not unlike to what we did for predicting the date of the bankruptcy of General Motors. However – unlike the GM case where we had thousands of instances, in this case our predictions were based on <100 ranges/data points – but on the other hand it turns out the data is more conclusive.

The predictions we amalgamated comes from business press, mainstream press, but perhaps most importantly some of the key blogs covering mobile technology. We essentially found two specific prediction ranges – 2011 and summer of 2010.

  • Up until June of 2009 the predictions published conclusively declared that the iPhone wouldn’t be on Verizon until 2011, with no more specifics in time frame specified. Many reasons for 2011 are cited included
    • Contract with AT&T not ending until end of 2010
    • Verizon’s network being incompatible with Apple’s UMTS based phones
    • Complexities of supporting multiple network technologies.
  • From June of 2009, the predictions are all on summer of 2010 – but with less conviction. The actual predictions are all summer of 2010 – but with many caveats around them. Reasons for the shift in predicted date include
    • New information seem to point to that AT&Ts contract actually ends summer of 2010
    • New, lower estimates of the cost for Apple to create a Verizon compatible phone.

The lack of conviction in predictions may stem from the potential complication for Apple to offer phones based on multiple types of cellular technology or perhaps the most simple reason: why not get on the Verizon network in 2011 when Apple is most likely with ship a 4G phone anyway – and Verizon’s new compatible 4G network will be ready? The latter does miss out on the key point that the phone would still have to be able to back up onto a 3G network for several years, for use in places where 4G service is not available or is not functioning.

What does summer of 2010 mean for Apple?

Apple product releases has a history of being tied to big events (MacWorld, etc.) – as we’ve blogged about before. Summer of 2010 can mean a few things looking at historical data – either the WWDC or the early September event – 9/9/09 last year. The one recent comment we’ve detected through a John Gruber Future (we’ve earlier found him to be a reliable source) was “Gruber does seem more confident that his sources say Mac OS X 10.7 is on track for a developer release at WWDC in June.

Now specifically one very interesting point we’ve detected is the following from Apple Insider on a iPhone on Verizon in Q3:

  • A new report citing sources in the Taiwan handset supply chain says Apple has contracted to produce a UMTS/CDMA hybrid iPhone due in the third quarter of next year that will enable the company to sell a single global handset to all carriers, and specifically to Verizon Wireless in the US.

That could mean that it would be too early to launch a iPhone for Verizon in June (WWDC) – and would be more likely for that early September date. The Fone Frenzy blog however suggest that WWDC would be logical launch date “…release the first CDMA iPhone right here in the United States running on Verizon’s new 4G network, with announcement expected in 2010 at Apple’s WWDC…”

What else is around the corner ?

We received a Future Saturday regarding Apple by John Gruber – who for example correctly predicted the iPhone 3Gs product name – as we blogged about in 2009.

  • John Gruber report that a “cone of silence” exists surrounding those developing the tablet and virtually no information comes from those directly involved. Many of the tablet team are reportedly the same as those that developed the Calendar, Mail, and Safari iPhone apps – and those people are used to this. They underwent a similar radio-lockdown in late 2006.

Interestingly enough when we do a simple statistical analysis on future of an Apple Tablet it decisively lands at Jan 26th, 2010 – and which nicely concur with the FT report on that Apple has rented a big stage in San Francisco that day. Also – there has even been rumors that Apple is co-developing a tablet with Verizon!

Finally: we leave it to you to figure out what sorts of financial bets to do with this! And we will back to comment on our accuracy.

As always – we welcome your comments below!


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