Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

Summary: An analyst suggests that the next wireless carrier to offer Apple's iPhone might be T-Mobile, not Verizon Wireless.

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The speculation has been, if nothing else, consistent.

It goes like this: When the exclusive deal between Apple and AT&T for the iPhone comes to an end, believed to be sometime next year, the maker of the most popular smartphone will likely team up with Verizon Wireless, the carrier that has the most subscribers and the better service. That's pretty much been the buzz for some time now.

Not so fast, though, says Thomas Weisel analyst Doug Reid, who suggests in a note today that a Verizon-Apple deal may not be as much of a slam-dunk as some (myself included) might think - or at least be hoping for. Instead, Reid suggests that T-Mobile is a more likely second carrier for the iPhone, according to a report on TheStreet.com.

For a guy who has iPhone envy but is sticking with Camp Verizon, I have to admit that I'm not thrilled with what Reid is suggesting. But, he makes some valid points. Consider the following:

  • Verizon recently launched a partnership with Google's Android and launched a pretty bold marketing campaign for the Motorola Droid, positioning it as a head-to-head competitor with the iPhone.
  • Apple already sells iPhones through Germany's T-Mobile unit so negotiating a deal in the U.S. with parent company Deutsche Telekom may be easier.
  • Verizon is gearing up for launch of its 4G technology, called Long Term Evolution, or LTE. Why launch an "old" phone on old technology when it could wait to roll out a 4G iPhone on a 4G network, giving AT&T users a reason to jump ship.
  • Apple and Verizon reportedly clashed over control of the device once before. Now that both are holding stronger poker hands - Apple's iPhone is off-the-charts for popularity while Verizon has the largest customer base, as well as 3G network in the U.S. (AT&T says it has the fastest 3G network but doesn't dispute that Verizon's 3G network covers a greater area.)
  • Finally, investors may not react kindly to a deal with T-Mobile over Verizon, largely because it keeps one of Apple's flagship products out of the hands of the nation's largest group of mobile phone customers.

Obviously, the players aren't talking about what the future might hold - so it's still all about speculation. In the meantime, Droid has been getting some strong reviews - I have one now and, while I'm still playing with it, I like what I see so far. The momentum around Google's mobile OS is growing and the number of devices and carriers - as well as apps - on Droid will only continue to grow.

I have been ready to dump the Blackberry for some time now but had been holding out for a Verizon iPhone. The longer I wait, the more I like the Droid. At some point, if Android can offer me just as great of a user experience as the iPhone, maybe that iPhone envy of mine will go away.

After just a couple of weeks with Droid in-hand, I'm already starting to feel some of that envy slip away.

Topics: Mobility, Apple, Hardware, iPhone, Smartphones, Verizon

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42 comments
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  • T-Mobile USA is GSM / T-Mobile needs...

    Both AT&T and T-Mobile USA are GSM, so no iPhone redesign would be necessary.

    T-Mobile USA needs iPhone more than Verizon, so Apple could negotiate a more favorable deal with the former.
    Tom12Tom
    • Art of the deal

      It's not over till parties sign on the dotted line. It will all come down to which company is willing to give Apple what it wants. Apple doesn't need Verizon or T-mobile as they have shown, Apple being very happy sitting on a minority market share while commanding excellent profit margins.
      oncall
      • You're absolutely right,

        but I would think that, between Verizon or T-
        Mobile, the latter would be more willing to give
        Apple what it wants. That, and the Droid is a
        full-on competing device with the iPhone.
        jedidethfreak
        • Plus...

          Plus, Apple wouldn't let them cripple the iPhone as Verizon likes to do with their hardware.
          rag@...
      • "Excellent profit margins"

        OnCall posted:
        [i]Apple doesn't need Verizon or T-mobile as they have shown, Apple being very happy sitting on a minority market share while commanding excellent profit margins.[/i]

        This suggests, perhaps, that Apple's profit margins are a bit too high, as is the case with the big pharmaceutical companies?

        Seriously, though... Apple's AppleCare service (as I've heard first-hand due to my sister's iMac consistently kernel-panicking with no help forthcoming from Apple, despite the machine still being in warranty) is not always as useful as they claim. This, no doubt, helps their margin, as does their refusal to work on smoke-affected Macs. But I digress.

        As a T-Mobile (US) customer myself, I can state that unless they improve the sensitivity of their antennas, other companies will continue to erode their market share. When you can't even get signal past the checkout counters in the front of a store with a T-Mobile phone (or my fianc?e's Verizon phone), yet your US Cellular phone can (at 2 bars or better!) in the back of the same store, it strongly suggests that both companies have a long way to go in some very important areas both have neglected.

        I actually think that Apple should offer the iPhone to both carriers simultaneously. While it won't irritate me if they don't (I am gearing up to become a developer for the Android-based G1) it would be the smart thing, for it would allow the iPhone greater penetration of the market than choosing one or the other.

        One weakness of the iPhone, IMO, is the on-screen keyboard. The thing is lousy for speed, and the G1's slide-out keyboard, while smallish, allows better speed and accuracy. I know, for I've used both in the past.
        Raymond Danner
    • T-Mobile cheaper.

      I'd rather T-Mobile get it than Verizon. They're usually cheaper. I'd buy one if they had an affordable unlimited plan. I'd buy two if they'd give a discount for adding extra lines on such a plan.
      MikeFM
  • RE: Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

    I'm not a patent expert, but I thought Apple had a patent
    on the touch technology (the pinch to zoom and so forth)
    so the user experience would be exclusive to the iPhone
    and the Droid would not be be possible. Obviously that's
    not the case as the Droid is on the the market.

    I think a deal like this gives Apple a wake-up call not to
    rest on its laurels. They are innovators - that Droid you
    have is just a copy - so whatever Apple has up its sleeve -
    deployed on AT&T and T-Mobile (for instance) - I am
    hoping will re-ignite your envy.
    keaura
    • Is Apple an innovator

      or just better opportunists then the rest?

      Seems like a lot of things people take for granted as "Apple innovation" turn out to be ideas that have been seen before.
      John Zern
      • irrelevant

        iPhone is the coolest phone out there. Period. Many people think so.
        These people vote with their dollars. Apple is doing very well with the
        iPhone and they keep improving it. I'll get an iPhone too when Apple
        moves to an acceptable carrier. (By the way, the latest Consumer Reports
        rates carriers. AT&T still sucks... badly.)
        TroutHound
      • The better mouse trap is an innovation

        Don't confuse innovation with invention. Apple didn't invent the mouse
        but certainly applied it to a usable product. Same with the graphical user
        interface and on and on.
        CowLauncher
    • So Apple invented touch screens?

      I remember using touch screens at Epcot Center in Orlando in the mid 80s. It seems to me like Apple copied that technology themselves.

      Please, enough of the idiotic "this company copied Apple" accusations. All these companies are borrowing technologies in some form or another. All that matters is how they apply the technology.
      tikigawd
      • Did you even read keaura's post?

        I didn't think so. Your blood boiled too fast and allowed you not to read
        it.
        Bruizer
  • You forgot the most important one:

    That T-Mobile will probally concede the most to Apple just to have the iPhone on their network.

    Looks like Verizon is doing fine [i]without[/i] the iPhone, so it's really not a "must have" for them, and with Android, BlackBerry, and WinMobile to choose from, will the addition of an iPhone really add anything to the mix in terms of added sales, vs what Apple wants them to give up in exchange for it?
    John Zern
    • I was thinking the same thing...

      [i]That T-Mobile will probally concede the most to Apple just to have the iPhone on their network.[/i]

      What will be left of T-Mobile at the end of their contract?
      mgp3
  • RE: Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

    The Droid doesn't have pinch & zoom - it's not a multi-touch device. With that said, the Palm Pre does have the pinch & zoom controls. I don't know if Palm licensed it, or if those gestures cannot be patented, or what may be involved in their implementation of the features.
    Andy M
    • Blech - wrong button

      Oops - that was supposed to be a reply to keaura's post, not the story. :P
      Andy M
  • RE: Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

    I hope not. tMobile has one of the worst signal coverage in the U.S. This would be a sure sign of desperation for Apple and the iPhone.
    zdnetviewer
    • T-Mobile Apple = Desperation

      @zdnetviewer... Not desperation but clearly less than
      optimum for Apple and prospective customers. Perhaps a
      3-way deal if T-Mobile's coverage augments AT&Ts,
      dunno. Time for some creative deal-making as Verizon +
      Apple mixes like oil + water.
      UnCommonCents
    • Oh, really?

      zdnetviewer posted:
      [i]tMobile has one of the worst signal coverage in the U.S. This would be a sure sign of desperation for Apple and the iPhone.[/i]

      Considering the fact that almost all the carriers have cooperation contracts with each other, I've never once had an outage on my TMobile that wasn't also true on my US Cellular and my fianc?e's Verizon. So that may not be an accurate statement. (In fact, my US Cellular phone is in constant roam here in my home state, since their nearest tower is in Tennessee...yet I get better performance 90% of the time from it, but that has more to do with better antenna tech, I think. While I do have the antenna booster thing, I've yet to put one on any of my TMobile devices (a Nokia 5190 (too old to bother with), a Motorola v3r (otherwise excellent), or my Motorola w490. Still not sure of the actual effectiveness of the things.
      Raymond Danner
  • RE: Analyst: The iPhone's next carrier is likely T-Mobile, not Verizon

    Ouch! Kinda serves up a "facial" to Verizon. From Apple's perspective it makes sense. I guess if you sashay around flaunting an iPhone competitor, you're going to get what you deserve.
    dbgreen53