Apple. plans to begin producing this year a new iPhone that could allow other U.S. phone carriers besides AT&T to sell it.
The new iPhone would work on CDMA, which is used by Verizon, Sprint and a handful of cellular operators in countries including South Korea and Japan. AT&T is on the GSM network. With Apple developing a phone with CDMA capability, its exclusive U.S. arrangement with AT&T dating to 2007 appears set to end.
Apple plans to release a new version of its current iPhone this summer, continuing its practice of annual upgrades at about the same time of year. The model is likely to be thinner and have a faster processor.
To say the iPhone has been a big business factor for AT&T would be a gigantic understatement. Apple alone has helped AT&T grab the leading position smart-phone market sales. AT&T has over 43% of all U.S. smart-phone customers, compared with 23% for Verizon.
For several quarters, AT&T’s growth has come almost single-handedly from the iPhone. In the fourth quarter of 2009, the carrier said it activated 3.1 million new iPhones. In comparison, it counted only a net total of 2.7 million new subscribers as some customers moved from other phones to iPhones.
Verizon has publicly stated its interest in the iPhone, but people familiar with the situation said Apple originally decided against developing a phone for Verizon to keep its development process simple, since the technologies are incompatible.
Verizon also is upgrading its network to a higher-speed technology, so Apple has said it believed CDMA was a short-term technology. Apple later changed its mind as it realized Verizon’s upgrade would take longer than expected.
Making the iPhone available through Verizon, which has over 91 million customers, as well as potentially other CDMA carriers could open up a significant new market.
Published on March 31, 2010