The most interesting aspect of the deal, besides the fact that it would bring the iPhone to another carrier besides AT&T, is that it would mark the first time Apple has produced a version of the iPhone for a CDMA wireless network (AT&T's network is GSM).
According to USA Today, Verizon's "high-level" discussions with Apple management occurred a few months ago; that may indicate that the deal has developed or even been finalized since then. (If it hasn't, expect it to soon: Apple CEO Steve Jobs' medical leave ends in June).
AT&T has exclusive U.S. distribution rights to the iPhone into 2010. That deal was struck in 2006, before the iPhone was the ubiquitous device it is now. AT&T has presumably made a pretty penny from the deal -- AT&T signed up 1.6 million iPhone customers during the last quarter, 40 percent of them new to AT&T.
However, the company's network is generally seen as less reliable and having less coverage than that of Verizon -- so it would be in AT&T's best interest to keep the monopoly on iPhone fanatics, especially in light of an upcoming hardware and software refresh of the iPhone product line.
Or put it this way: is AT&T a compelling choice without iPhone exclusivity?
(I'd say no. ZDNet editor in chief Larry Dignan says the deal is a tool to leverage negotiation with AT&T.)
Even more interesting is that this puts the iPhone and the RIM BlackBerry Storm, which is also expecting an upcoming update, on the same network. That means Apple is bringing the fight directly to RIM, excising the service provider aspect from the head-to-head comparison of the devices.
Would you buy an iPhone on Verizon? Or would you stick with BlackBerry?