In the years since AT&T became the exclusive seller of the Apple iPhone, the cellular network has thrived. But this reign of power is soon to come to an end, according to Wall Street Journal reporters Shayndi Raice and Yukari Iwatani Kane. This was confirmed by January 11’s press conference, which included a larger than life picture of the Verizon Wireless logo superimposed over an Apple iPhone. Tech blog Engadget covered the event, announcing that, a CDMA (non-LTE) version of the iPhone 4 will be available for sale by Verizon Wireless starting February 10th. 16GB models will cost $199 with a two year contract, with 32GB models running $299. Engadget analysts noted that the Verizon iPhone will include Android phone style five user WiFi hotspot functionality.
While Apple’s iPhone was once the leading “smart phone,” Google’s willingness to let phone manufacturers use its Android platform for free has meant that as recent as the second quarter, Android based phones outsold Apple’s iPhone.
Unexpected, but welcomed by Verizon Wireless subscribers was a simultaneous announcement that Verizon Wireless will see the iPad packaged with its do-it-yourself wi-fi hotspot, the MiFi, beginning in October, 2010. Business Week reported that prices will range for $629.99 to $829.99.
The Wall Street Journal cited analysts’ estimates that AT&T could lose as many as three million subscribers when the iPhone becomes available to Verizon Wireless customers. Verizon Wireless, meanwhile, could net as many as ten million more subscribers from AT&T and other carriers such as Sprint and T-Mobile. Verizon Wireless, with 93 million subscribers, is already widely viewed as the best carrier for service, while AT&T is routinely ranked the worst.
The expansion is sure to be a win for Apple, about which one investor said, “It opens up a huge uninstalled base for them in this country.” But will it be a good decision for Verizon Wireless? The boost in subscribers to their wireless service seems guaranteed, but industry insiders caution that the Verizon Wireless infrastructure may not be equipped to handle the high volume of data that the iPhones will require. Verizon Wireless has been slowly increasing their data capabilities as they have begun to push laptop and netbook data access services.
Seeing how AT&T rallies from this anticipated hit may be even more interesting to investors and industry watchers than whether Verizon Wireless is able to beef up their data capabilities effectively. For their part, AT&T has implemented complicated family plans that are difficult for subscribers to disentangle themselves from, which may help to soften the blow in the short term, but is unlikely to win them any long term growth in their subscriber base.