After seemingly endless speculation, Verizon announced today that it will begin selling the newest version of Apple's iPhone early next month, marking the end of the exclusive agreement that AT&T had with Apple to sell the phone on its network.
"We are bringing to market the fruit of our strategic partnership with a giant in the market, and that is Apple," affirmed Lowell McAdam, the president and chief operating officer of Verizon, at a news conference at Jazz at Lincoln Center in Manhattan.
Apple created a new version of its iPhone to comply with Verizon's network that uses CDMA technology. Verizon has priced the phones the same way as AT&T – $199 for a 16-gigabyte version and $299 for the 32-gigabyte model – and says that the iPhone will be available for preoder February 3 for existing customers and February 10 for non-customers.
The move will reverberate through the markets and could both double Apple's smart phone market share and potentially slow the pace of smart phones sold that use Google's Android software. A new report from Javelin Strategy & Research showed that Android's market share jumped from only 4 percent in July of 2009 to 27 percent in September of 2010; moreover, Javelin predicted that Android will overtake Research in Motion's Blackberry as the most popular smart phone on the market in 2011 – even when taking into account the Verizon iPhone availability.
The CDMA technology employed by Verizon, ranked at the top in customer satisfaction by Consumer Reports, will prohibit users from making calls and surfing the web simultaneously, something that AT&T permits on its network. However, Tim Cook, Apple's chief operating officer, asserted that it shouldn't be a problem as "people place emphasis on different things." Furthermore, the phone will run on Verizon's third-generation wireless network, rather than its new 4G LTE network.
Nonetheless, Javelin's report today avers that Android phones will experience stellar growth this year because of myriad factors: "The Android has many phone models price significantly lower than the iPhone or Blackberry, has an open development platform, and is supported by multiple carriers. These factors will continue to contribute to its rapid propulsion to superstar status in the smart phone market."
Ultimately, the question on the minds of both consumers and analysts is whether the iPhone will place the same strains on Verizon's network as it did on AT&T's. Gene Munster, an analyst at Piper Jaffray, contends that "it's a wild card," noting that "there is no case study because we don't know how it will behave." Dan Mead, the chief executive of Verizon Wireless, though, says that it should have no problems going forward: "We're ready for this launch. We have more than enough capacity on our network."
AT&T doesn't see it that way, however. A spokeswoman from the first company to carry the game-changing iPhone shot back with this retort: "For iPhone users who want the fastest speeds, the ability to talk and use apps at the same time, and unsurpassed global coverage, the only choice is AT&T."