Verizon iPhone arrives Feb. 10

Will take pre-orders Feb. 3, but mum on prices of data, Wi-Fi sharing plans

After more than a year of rumors, Verizon announced it would start selling Apple's iPhone 4 on Feb. 10.

Verizon and Apple will begin taking pre-orders for eligible customers on Feb. 3, with in-store and online sales kicking off a week later.

As expected, the announcement came from a New York press conference, where Lowell McAdam, Verizon's president, said that his company had been talking with Apple since 2008 about bringing the iconic smartphone to the nation's biggest mobile carrier.

"I think this was a non-event event," said Brian Marshall, a Wall Street analyst with Gleacher & Co., who ticked off several revelations that were widely anticipated, including a CDMA-only handset and a February launch. "Let's just say it was consistent with our expectations," Marshall added.

Michael Gartenberg, an analyst with Gartner, agreed. "It's what people were expecting," he said. "But for consumers who make their decision carrier first, phone second, this is the phone that Verizon customers have been waiting for. Now their dream has come true."

What will be interesting, said Gartenberg, is how many people who have been crying for the iPhone on Verizon actually take the carrier's offer.

The iPhone 4 for Verizon is a CDMA-only device -- dispelling speculation that Apple would specially craft a version that supports the carrier's advanced LTE network -- and will be priced identically to the existing iPhone 4 sold to AT&T subscribers: $199.99 for a 16GB device and $299.99 for a 32GB model.

Verizon will require customers to sign up for a two-year service contract to obtain the subsidized prices.

The Verizon iPhone 4 also includes something Apple called "Personal Hotspot," a built-in MiFi capability that provides 3G cellular access to up to five Wi-Fi devices. That capability is currently available on other Verizon-sold smartphones for an additional $20 per month.

Verizon did not discuss iPhone 4 plan prices during the press conference but said in an accompanying FAQ that customers will be able to choose any of the carrier's voice plans. Data package prices -- one if also required for the iPhone -- will be announced later, the company said. Presumably, Personal Hotspot prices for the iPhone 4 will also be released at the same time.

"Obviously, it will be interesting to see what those plan are, and how they differ from other Verizon smartphones, such as the Droid," said Gartenberg, referring to Android-based line that includes the Droid, Droid 2 and Droid Incredible. "Will Verizon try and compete on network pricing with AT&T? Will the iPhone plans cost more than the Droids'? Those are the questions that will determine whether the iPhone on Verizon has an impact on consumers."

Currently, Verizon prices the least-expensive smartphone plans at $40 per month for 450 minutes of talk time and $15 per month for a 150MB data allowance, putting the bare-bones smartphone monthly costs at $55. Verizon's unlimited data plan runs $30 per month, and the carrier offers other voice plans, including a $70 deal with unlimited minutes.

If Verizon sticks with those plans and prices, iPhone 4 owners would pony up $120 per month for unlimited data and voice, and Personal Hotspot. Texting plans are additional, and for other phones range from $5 per month for 250 messages to $20 per month for up to 5,000 texts.

Some analysts, including Marshall, had predicted Monday that Verizon would charge as much as $50 more for a CDMA-only iPhone 4, while others had given the inclusion of LTE support a 50 per cent chance. Neither panned out.

"LTE isn't ready for prime time," said Marshall. Verizon rolled out the faster network in 38 markets last month, and has promised to expand that service to 175 cities by the end of 2011.

Tim Cook, Apple's chief operating officer, joined McAdam in breaking what one analyst yesterday called the "the biggest non-news news" related to Apple since the well-rumored launch of the iPad a year ago.

"All of Apple, is very very excited to bring the iPhone to Verizon's customers," said Cook.

Cook's appearance was one of the markers Marshall used to rank the significance of the move by Apple, if not the importance of the actual announcement.

"Having [CEO] Steve Jobs at a non-Apple event wouldn't have been in Apple's character," Marshall said. "But it's a pretty big deal to send the company's No. 2 to a non-Apple event. That speaks volumes about the deal and the upside, which Apple clearly sees as very impressive."

Marshall has projected that Apple will sell an additional 12 million iPhones during 2011 because of the addition of Verizon to its stable of carriers. In his estimate, the Verizon bump represents about half of the 37 per cent increase in unit sales he expects in 2011.

Today's announcement ends the iPhone exclusivity that rival AT&T has enjoyed since Apple launched the smartphone in mid-2007.

But while U.S. customers now have a carrier choice for the iPhone, Gartenberg pointed out that many will want to stick with AT&T. "Verizon's iPhone will not do Internet and phone simultaneously," Gartenberg said, talking about a limitation of CDMA. "How important that, and other differentiators, will be will depend on the user.

"Remember, Verizon has gained the iPhone, AT&T has not lost the iPhone," said Gartenberg.

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Tags AppleiPhonePhonesconsumer electronicsat&tVerizon Wireless

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Gregg Keizer

Gregg Keizer

Computerworld (US)
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