Verizon Wireless will finally announce an iPhone tomorrow, ending AT&T Mobility’s exclusive hold on Apple’s iconic device in the United States, according to a report from The Wall Street Journal.
Verizon will announce the impending launch of the iPhone at a press event in New York City, according to the report that cites a source familiar with the matter. The carrier reportedly will offer a service plan that includes unlimited data use, something AT&T did away with last year.
The announcement could mean a big shake-up in the wireless industry. AT&T has long received criticism for leaning too heavily on the iPhone, as well as failing to support the data traffic it creates. AT&T is expected to sell 14 million iPhones in 2011, accounting for 12 percent of the company’s total revenue.
Dan Hays, director of telecommunication practice for PRTM, says that Verizon Wireless’ acquisition of the iPhone is a big deal but probably won’t mean as many sales of the phone as many are suggesting.
“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.
PRTM believes that the new iPhone will prompt selected, existing high-end subscribers from competitors like AT&T, Sprint Nextel and T-Mobile USA to switch to Verizon, enticing them with Verizon’s network strength and differentiated services such as device tethering and unlimited data.
Hays also says Verizon will do everything it can to get people on the iPhone and expects Verizon to convert a small portion of existing Verizon subscribers to iPhone users by extending their contracts, which would enable them to switch devices. He believes the iPhone will indirectly accelerate adoption of devices that run on Verizon’s LTE network, enabling Verizon to lure new customers into stores and up-sell them on LTE devices from competitors like Samsung, Motorola and HTC.
Still, Hays says this isn’t going to mean the kinds of iPhone sales analysts are predicting. Hayes says predictions of as many as 13 million Verizon iPhone sales in 2011 are unlikely to be fulfilled. More likely, 2011 will see Verizon iPhone sales in the range of 5 million to 7 million, slowed by the high cost of subscribers breaking existing contracts, limitations of Verizon’s CDMA technology for multi-tasking and global roaming and an attractive portfolio of competing 3G and LTE devices in Verizon’s arsenal.
AT&T can’t rest on its laurels as its main competitor begins selling its coveted device. The company recently announced that it has deployed HSPA+ across its entire 3G footprint and will complete its LTE rollout by 2013.
“The Verizon iPhone and their competitive 4G portfolio are likely the main drivers behind AT&T’s acceleration of its LTE network. AT&T’s challenge will be to keep Verizon in its sights now that the playing field is leveling with the iPhone,” Hays said.
Apple developed the original iPhone through a collaboration with Cingular Wireless, which later became AT&T Mobility. Cingular gave Apple complete control over development of the iPhone, which was unheard of at the time. Apple first unveiled the iPhone to the public on Jan. 9, 2007, at Macworld 2007. The iPhone launched on June 29, 2007. Since that time, AT&T has maintained its exclusivity as the only carrier to sell the iPhone in the United States.