The wait is over.
Verizon Wireless, the nation’s largest wireless mobile provider, announced Tuesday that it will offer Apple’s wildly popular iPhone to its nearly 100 million customers, breaking four years of exclusivity by arch-rival AT&T.
Verizon’s iPhone launch will intensify the already ferocious competition raging in the mobile phone market between the iPhone, Research in Motion’s Blackberry line of devices, and handsets powered by Google’s Android mobile operating system.
For Apple, the Verizon deal opens up a vast swath of the market for its signature product, the iPhone, certainly one of the most iconic mobile devices of the last decade.
“This will be the first iPhone for millions of Verizon subscribers who have not had the ability to access Apple’s hardware or the App Store,” said Rana Sobhany, an expert on Apple’s mobile products and the author of Mobilize: Strategies for Success from the Frontlines of the App Revolution.
“Verizon’s customer base will immediately scramble to download millions of apps within the first 30 days,” Sobhany added.
Verizon president Lowell McAdam made the announcement at an event in New York City on Tuesday morning. He said the iPhone 4 would be available for pre-order to existing Verizon customers beginning February 3rd, and then to new customers on February 10th.
Verizon will offer two versions of the device: a 16-GB model for $200 and a 32-GB model for $300, both with a two-year contract. Verizon did not disclose the cost of its iPhone-related data plans but a spokesman said the company would do so before the iPhone goes on sale. There were rumors of the elusive white iPhone, but a Verizon representative told CNET that it would not be forthcoming next month.
Verizon said the iPhone will include a new “Personal Hotspot” allowing customers to use the device to connect up to five Wi-Fi enabled devices, a feature commonly known as tethering.
But like all of Verizon’s CDMA-based phones, the device will not support simultaneous voice and data usage, which means if you get a voice call, you lose your data connection. Verizon’s iPhone will also not be compatible with the wireless giant’s new LTE network, which promises faster data speeds than the company’s existing 3G network.
Apple chief operating officer Tim Cook preferred to focus on the big picture. “We’re incredibly pleased to give Verizon customers the choice they’ve been waiting for,” he said.
Verizon Wireless CEO Dan Mead and Apple COO Tim Cook at Verizon iPhone launch, New York. Photo by Sam Gustin, Wired.com
The Verizon iPhone launch follows years of speculation about how long AT&T’s exclusive contract to sell the device would last.
“It just goes to show that if the press writes about something long and hard enough, it will come true,” McAdam quipped.
Investors pushed AT&T shares down 1.8 percent Monday ahead of the Verizon announcement.
The two giant wireless rivals have already commenced bickering about the iPhone. In a statement, AT&T spokesman Mark Siegel said the company’s GSM technology is faster than Verizon’s CDMA technology, and warned Verizon customers to get “ready for life in the slow lane.”
“AT&T is known for a lot of things, but network quality is not one of them,” shot back Jeffrey Nelson, a spokesman for Verizon Wireless.
Wall Street Apple analyst Gene Munster predicts that Verizon will sell as many as 9 million iPhones in 2011. Other analysts forecast sales of as many as 13 million units.
But Dan Hays, an analyst at consulting firm PRTM, thinks those estimates are high, and is calling for 5 to 7 million handsets to be sold.
“While the launch of the Apple iPhone on Verizon’s CDMA network marks a turning point for the U.S. wireless market and shifts the competitive landscape for high-end wireless subscribers, we believe that current estimates of its potential sales are overblown and fail to contemplate the likely benefits to Verizon’s other smartphone devices,” Hays said in a research note.
AT&T is moving to diversify its product line after several years in which the iPhone anchored the company’s stable of devices. This year, AT&T plans to introduce 20 new phones, including 12 powered by Google’s Android operating system, in addition to Blackberry devices and phones running Microsoft’s WindowsPhone7 software.
“AT&T is clearly reducing its dependence on Apple,” Gleacher and Co. analyst Mark McKechnie observed.
For its part, Verizon will likely pay a steep price for the privilege of selling the iPhone, according to Bloomberg. The company could spend as much as $5 billion in 2011 subsidizing customers’ purchase of the phones, which it will sell at a discount in order to induce new subscribers to sign up for a two-year contract.
Apple shares opened trading Tuesday at over $340 per share, up more than 50 percent in the last year.
Photos: Sam Gustin/Wired.com
