Friday, October 02, 2009

If Apple Wanted Verizon They Would HAVE Verizon.

Macsimum News posted a "new facts/same argument" post called:

Apple has got to be considering an iPhone for Verizon

In this post, Dennis Sellers says,

Apple surely must be considering signing up other US carriers for the iPhone besides AT&T (that singularity is why I don’t own an Apple phone). If they’re not, they should reconsider.

The main reason for this suggestion is: the number one complaint of iPhone users, in a recent analyst report, is AT&T - not the iPhone itself. The article goes on to hash this figure out a half dozen ways.

But this factoid from the article deserves a further look:

The most logical next choice for a US carrier is Verizon. But for that to happen, Apple must be willing to build an iPhone just for Verizon’s CDMA network. The other alternative is simply too expensive. About $1.78 billion to be exact.

That’s according to a report looking at the capital expenditures needed to deploy 4G, or LTE (Long Term Evolution) networks, issued Wednesday by Aircom International, a U.K.-based network consulting group. And that’s just for the first year.

Will Apple make an iPhone for Verizon’s network? I think it will, at least eventually. Until then, it will have the world’s most loved smartphone on a carrier that a lot of folks would like to ditch.

1) It won't happen on CDMA - the next gen LTE network is already starting to be built out with a good penetration in effect by the end of next year. I doubt seriously that Verizon is playing the AT&T game of "coming soon".

2) No one seems to have considered that $1.78 Billion is chump change to Apple's $34 Billion in the bank. What few grasp is that Apple's $34 Billion is with NO DEBT obligations and growing at a rate of $1 Billion + per fiscal quarter. If Apple were displeased enough with AT&T, which I think they might be, they would go halvers with Verizon and give them their money next summer. For a controlling stake, Apple would probably be willing to spend $2 Billion and make the network even better than planned.

3) Apple has done this with investments for both NAND memory and small hard drive manufacturing for iPod/iPhone use and for LCD production. Apple has also cooperated and invested in Intel for production of custom chips for production in the MacBook Air. I can't see why an investment in a data network (maybe that could be enhanced by their new North Carolina data center) isn't along these same lines.

To sum up ... if Apple wanted Verizon ... they would invest in Verizon's network and deployment and would do so with just 3 or 4 months profit. That time may certainly come next summer when AT&T's agreement comes up for renewal.

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