The Verizon iPhone Report: Taking the Easy Way Out

January 12th, 2011

There were loads of expectations ahead of Tuesday’s announcement that Verizon Wireless would put the iPhone on sale beginning on February 10th. Add all of them up, then consider the simplest and quickest path to availability, and you end up with the latter. Even Steve Jobs didn’t consider the event important enough to show up; he sent along his “First Officer,” COO Tim Cook instead to join Verizon COO Lowell McAdam for the session.

Just the other day, I read a blog suggesting Apple would be offering a specially crafted iPhone 4G model, delivering compatibility with Verizon’s CDMA network, AT&T’s GSM, and the upcoming LTE or 4G protocol. The author of that speculative wet dream didn’t consider that it might cost more to build a “world phone,” and thus the price would be higher.

Another report suggested that Verizon’s iPhone would cost $20 than AT&T’s, because CDMA chips are more expensive, while ignoring competitive considerations that would keep the prices as they are.

In an effort to get the product into the stores as quickly as possible, the product won’t support Verizon’s burgeoning LTE network. Apple says that they opted not to go with LTE because it would require design changes that would delay release of the product. That will likely have to await for the iPhone 5, or whatever it’s called, which is expected this summer.

The end result of the Apple/Verizon deal is an iPhone 4 that’s nearly identical to the current model, except for the CDMA hardware, a minor position change for the Mute switch, and antenna modifications required to support a different network. Whether those changes would reduce or eliminate the so-called “Death Grip” phenomenon, where reception deteriorates if you hold it the wrong way, wasn’t stated. While the definitive answers may not come until the product hits the streets, Ars Technica contributor Chris Foresman, who attended the session and got his hands on one of the Verizon iPhones, said that his attempts to duplicate the signal loss phenomenon failed. A similar experiment by a reporter from managed to reduce signal strength by one bar, but it required gripping the phone with both hands. Since this issue depends on signal strength, it may be that it never dipped low enough to cause a serious impact.

But then Verizon does claim to have better reception than AT&T, particularly in New York City, where the press briefing was held. So that may be the answer, but the jury is still out on that score. Unless, of course, the antenna changes addressed more than the switch to CDMA.

Forgetting any differences in contracts and data plans, there’s a significant limitation in the CDMA version, one touted often by AT&T in their ads. You won’t be able to make a phone call and browse the Internet at the same time. Clearly Verizon was unwilling or unable to modify its network architecture to allow for these simultaneous tasks, but customers who have already bought Android and BlackBerry smartphones from them don’t appear to be complaining too loudly. I’d chafe at this inconvenience, particularly when a caller asks me to look up something. It shouldn’t be necessary to call them back, or look for another device to perform that search.

However, Verizon trumps AT&T in one key respect: You’ll be allowed to use your iPhone as a wireless hot spot, supporting up to five devices. That’s an advantage that AT&T may be forced to offer as well, particularly if there’s a danger of losing lots of customers when they’re contracts are up.

The deal is also reported to be non-exclusive, meaning there’s nothing to stop Apple from offering an iPhone for customers of Sprint and T-Mobile, although media analysts aren’t expecting that to happen right away. Maybe by the time the iPhone 5 arrives, assuming the remaining major carriers in the U.S. are ready to agree to Apple’s requirements. Right now, all you are seeing is the usual corporate spin control.

The impact to AT&T’s bottom line, and that of Verizon Wireless, is also uncertain. Apple didn’t make this deal cheaply, and will grab as much as they can on each phone sold. But income from cell phone contracts are spread out over a two-year period, and Verizon clearly expects to come out way ahead.

While a Verizon iPhone shouldn’t come as a big surprise, since it’s been predicted from the first day AT&T offered the product, Apple’s competitors are suddenly placed in a very disadvantaged position. After all, Verizon didn’t stage special media events to tout the arrival of a new phone from HTC, Motorola or RIM on their network. To them, these handsets are just commodity products, and one is as good as the next so long as customers accept a two-year contract.

As I said in yesterday’s column, none of this tempts me to switch to Verizon when my AT&T contract is up. Service is good in these parts, and being able to host a Wi-Fi hot spot is not sufficient temptation for me to make the jump to a new provider, at least not so far.

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8 Responses to “The Verizon iPhone Report: Taking the Easy Way Out”

  1. […] This post was mentioned on Twitter by stuart001uk. stuart001uk said: RT @technightowl: Here's my latest Tech Night Owl commentary: : The Verizon iPhone Report: Taking the Easy Way Out […]

  2. Randy A says:

    I’ve never had a need to use data and voice at the same time. I’ve had people ask me to look something up for them while on the phone, but I have always just responded by saying “can’t you do it”. Has nothing to do with my phone, just my lazy nature. I think this capability is largely overblown and gets a lot more attention than it deserves. In a pinch having to call someone back is an inconvenience, not a fatal flaw. Aside from that my iPhone using wife makes calls from my Droid all the time because, though she can’t use data while she talks, at least she can talk.

    Now, I’ll confess to owning a second smart phone. I got a Palm Pre instead of a MiFi due to the included tethering plan. Unlimited data for the phone, 5GB for tethering for the iPad all for the low price of $30. As it was half the cost of the MiFi plan I went with that instead. I have that Pre with me every day, everywhere that I go and I still don’t look things up for people. We’re back to that lazy thing. And yes, I do really like WebOS.

    Verizon did not hold a press event aside from CES for this round of Droid phones but they have done it. The two previous rounds of Droid phones that included the original Droid and then last summer for the Droid X and Droid 2. I seem to recall a third event for the Pro/Incredible round but I’m not sure of that one. As Apple doesn’t do CES I would lay odds that this event didn’t happen there because of Apple.

    In the end Apple delivered a phone that is nearly a year old and lacks support for LTE to Verizon. At least the iPhone to Verizon speculative crap can stop.

    • @Randy A, Let’s correct a few things. The iPhone 4 came out last June, so that’s obviously less than a year. Another model (iPhone 5 or whatever) will probably come in the same timeframe this year, and that will likely be the LTE model. It was likely a time to market issue; Tim Cook says the early LTE chips had defects. Did you really expect Apple to produce an all-new iPhone so early? Next.


      • Randy A says:

        @Gene Steinberg, Yeah, I did expect Apple to include LTE in the first Verizon iPhone, just not now. Buy an iPhone in February and you get 3G but if you wait 4 months you get LTE? Seems really, really odd to me that Apple would do this. Leads me to believe that LTE won’t even come to the iPhone until 2012. Quite a handicap for those that buy now regardless.

        Apple waited this long to deliver an iPhone to Verizon so what real difference would a few more months make? I would not buy any 3G device now when LTE phones will be here in what, 2 months? Millions and millions of people will buy this phone, it just doesn’t make sense to me to do so as a user. It’s great for Apple because they will bank a lot cash from the pent up demand but the buyer gets short sheeted on this deal.

        As I originally stated, at least the speculation is over. Now the blogosphere can concentrate on the eternal Android vs iOS discussion.

  3. Andrew says:

    I will preorder my VZW iPhone on February 3. I’ve been waiting since 2007, making do with BlackBerry, a system I actually really like, but which has dubious Mac compatibility and on VZW at least, no OS 6 devices. Had the Torch come to VZW when it came to AT&T I would have bought it and been happy, but as it is, I’ve held out with my Storm2, and am very excited for February 10.

    I could care less about simultaneous data and voice as I’ve never had it before, and could care less about LTE as it doesn’t exist where I live yet anyway.

    Hotspot will be nice, but the main thing is getting iOS on my phone and true integration with my all-Mac business environment. The biggest boost for me is the DayLite Touch app, which will be a much better CRM solution than my current DayLite-iCal-BlackBerry three-way sync mess.

  4. MichaelC says:

    Odd thing about that “Death grip”: I can sometimes get the number of bars to drop slightly on my iPhone when bridging that gap as has been often reported, but, interestingly enough, I can also get MORE bars than when the phone is not being held at all by touching the bottom antenna right over the Dock Connector slot. How come no one has reported the “Grip of Life”?

  5. ronin says:

    Verizon will NOT get the iPhone 5 in June but ATT will. Apple would not go through 2 years and 1000 Verizon iPhone 4 prototypes just to sell it in ONE market for 4 months.

    June 2011 ATT-only iPhone 5 will be an evolutionary not a revolutionary upgrade of the iPhone 4 and the design will be essentially the same. It will have a bunch of minor improvements and additions such as NFC for mobile payments and better battery life.

    Apple doesn’t care if Verizon users get mad that they don’t have the best iPhone. It’s been this way since the iPhone launched. The way Apple sees it they should be happy to have any iPhone.

    The CDMA Verizon iPhone is a joke to Apple. Just a placeholder until all carriers are on LTE. In terms of revenue it will be insignificant. You need to realize that Apple is a GLOBAL company and the world uses GSM.
    Verizon will gain parity only once the iPhone goes to 4G/LTE in June 2012.

    Sorry Verizon fans. Your iPhone 4 will be inferior upon launch (slower, shorter battery life, no simultaneous voice & data) and will fall further behind in June 2011. You’ll also have way fewer cases to choose from because many accessory makers won’t waste time on a one-off, one market design.

  6. Andrew says:

    Europe uses GSM, but Europe is NOT the world. The USA uses both systems, while CDMA is dominant in East Asia. I just returned from Korea and Japan with my BlackBerry world phone (CDMA and GSM) and not once did it switch to GSM.

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