In a long-expected move that could have big implications for thewireless industry, the iPhone is finally coming to Verizon.
Verizon announced Tuesday it will begin selling Apple's iPhone 4,the latest version of the device, Feb. 10. Existing Verizoncustomers can start pre-ordering it Feb. 3.
Analysts expect the move to boost sales of the iPhone, Apple'srevenue and Verizon's position in the smartphone market. They alsoexpect it will slow sales at AT&T and curtail the until now fast-paced growth in sales of devices based on Google's Android operatingsystem.
"A lot of people are going to be buying the iPhone," said KenDulaney, a wireless industry analyst at Gartner.
Verizon's version of the iPhone has few differences from the onethat AT&T began selling last summer. The most notable are that itworks on Verizon's network, which is incompatible with AT&T'swireless technology, and that Verizon iPhone users will be able touse the device as a Wi-Fi hot spot to connect up to five othergadgets to the Internet. Also, because of a limitation with thetechnology Verizon uses, users of the Verizon iPhone, unlike usersof the AT&T version, won't be able to talk on the phone and surf theWeb at the same time over Verizon's network.
Verizon will charge $200 for the 16-gigabyte version of theiPhone and $300 for the 32-gigabyte model with a two-year contract.Those are the same prices AT&T charges. Unlike AT&T, though, Verizonapparently won't be carrying the older iPhone 3GS.
The carrier declined to say what data plans it will offer, sayingit would provide those details "at a later date." The company didsay it plans to charge customers an extra $20 a month to use the hotspot feature, which would allow them to transfer up to 2 gigabytesof data.
Verizon's iPhone will connect with its older 3G network, not itsnew, faster 4G one. Verizon launched its 4G network late last year,and at last week's Consumer Electronics Show in Las Vegas, it toutedsome 10 different devices that will run on that network.
Sales of the Verizon iPhone likely won't be affected much by thefact it won't work on Verizon's 4G network, analysts said, because abigger consideration for most consumers will be simply that thepopular phone is available on Verizon.
"I don't think that's going to be an issue," said Will Stofega,an analyst who covers the wireless market for research group IDC.
Plus, 4G is an immature technology and the first 4G devices arelikely to have significant drawbacks, particularly in terms of power-- they likely will offer relatively short usage times before theirbatteries need recharging, analysts said. Apple officials citedsimilar reasons for not supporting 3G technology with the firstversion of the iPhone. Verizon has not specified what battery lifeusers of 4G devices should expect.
Tim Cook, Apple's chief operating officer, indicated that thecompany didn't think the Verizon iPhone's lack of 4G support wouldbe a problem. "Verizon customers have told us they can't wait to gettheir hands on iPhone 4," he said.
The announcement could come as a blow to AT&T, which has been theexclusive U.S. carrier for the iPhone since its launch in 2007. TheiPhone has helped to boost AT&T's subscriber base as well as itsrevenues from selling data plans. But users of the device haveoverloaded AT&T's network and forced the company to spend billionsof dollars to upgrade it.
Some AT&T iPhone users, particularly those in areas such as NewYork and San Francisco that have seen the worst network problems,will likely jump ship to Verizon, said analysts. But most willlikely stay put, whether because they are in still in the middle oftheir contracts, because of the benefits of AT&T's network or simpleinertia, they said.
For customers still under contract to AT&T, switching wouldentail hundreds of dollars in costs, from buying the new phone, topaying AT&T's early cancellation fee to paying Verizon's activationfee, Stofega noted.
AT&T's official reaction to the announcement was muted,emphasizing what it sees as the benefits of its network.
"For iPhone users who want the fastest speeds, the ability totalk and use apps at the same time, and unsurpassed global coverage,the only choice is AT&T," the company said in a statement.
The Verizon iPhone is likely to slow sales of devices the carriersells that are based on Google's Android operating system, analystssaid. Soaring sales of Verizon's Droid line of smartphones havehelped boost overall Android device sales over the last year.
Many of those sales were likely made because the iPhone wasn'tavailable on Verizon, and Droids were the next best thing, analystssaid. Although AT&T offers smartphones based on Android and othersoftware, the iPhone dominates its smartphone sales, they noted.
"We're going to see how strong Android is," said Gartner'sDulaney. At AT&T, "there's a lot of good competition, but everyonewants Apple."
Contact Troy Wolverton at 408-920-5021. Follow him at Twitter.com/troywolv.When available
Feb. 10. Existing Verizon customers can pre-order it startingFeb. 3
Cost
With a two-year contract, $200 for the 16-gigabyte version and$300 for the 32-gigabyte version
What's different-- Verizon iPhone will be compatible with CDMAtechnology, which underlies Verizon's network, but not AT&T's. -- Itwill have the ability to serve as a mobile Wi-Fi hot spot for up tofive other devices, but not be able to make calls and surf the Webat the same time, because of the network's limitations.
Source: Apple, Verizon,
Mercury News research
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