Verizon iPhone: End of AT&T Monopoly?

by Gaurav Kheterpal on March 30, 2010

New iPhone: End of AT&T Monopoly?

New iPhone: End of AT&T Monopoly?

The WSJ has reported that the AT&T iPhone Monopoly in the US might soon be coming to an end. The report says that Apple  plans to start producing a new iPhone that could be sold by phone carriers other than AT&T. Though Apple is committed to releasing a new iPhone on the AT&T network this summer, it is ending the AT&T iPhone in the United States. Given the plight of iPhone’s performance on AT&T’s 3G network, this is welcome news for people who have been staying away from the iPhone because of AT&T’s network issues.

It has been reported that Apple will develop a new CDMA variant for iPhone, presumably for Verizon. It is interesting to note that CDMA is also used by Sprint Nextel Corp and many operators in India, Japan and South Korea. Though, GSM is the worldwide global standard for cellular networks, CDMA deployments have increased steadily over the last couple of years. Therefore, a CDMA iPhone opens up a stream of new revenue opportunities for Apple. Apple and Verizon have declined to comment on these speculations.

Further, the two new iPhones (one for AT&T and the other, a CDMA variant for Verizon) will be developed by different companies.  Hon Hai Precision Industry Company (now a part of FoxConn Technology Group), the company that manufactured the previous versions of iPhone, is reported to to be manufacturing the new AT&T iPhone.  Pegatron, a Taiwan based leading DMS Company, is reported to be the front runner to develop the CDMA iPhone for Verizon.

So, how will the Verizon iPhone deal affect AT&T? AT&T has made the most of it’s iPhone exclusivity and has emerged as the leader in U.S smartphone market. While Verizon is the largest US provider with a subscriber base of nearly 91 million, AT&T leads the smartphone segment. A recent comScore report indicated that AT&T has over 43% of all U.S smartphone customers, compared with a paltry 23% for Verizon. While the Verizon iPhone deal would be a win-win situation for both Verizon and Apple, it could have fatal consequences for AT&T. Analysts believe that Verizon could help Apple nearly double the number of iPhone users in United States.

Given a choice, would you switch to the Verizon iPhone or would you rather continue to use the AT&T iPhone? What do you think?

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitter,Identi.ca, or Friendfeed

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