All you need to know about a (possible) Verizon iPhone

If you're hoping for a Verizon iPhone, CNET tells you what you can expect if the device ever becomes a reality.

No, it's not official yet, but after years of rumors and gossip, it appears that a Verizon Wireless iPhone will be a reality early next year. It would be an understatement to say this would be a very big deal--not only to Apple and Verizon, but also to AT&T, which would lose its exclusive hold on Apple's device. We know that CNET readers have a lot of questions about what could happen, so we've prepared this FAQ to lay out what we know and what we don't know, and to give our predictions as to how it will all develop. And please chime in with your own takes in the comments section.

Rumors have been going around about the Verizon iPhone for years. Is it now a sure thing?
We sure hope so, if only so we don't have to continue reporting the same rumors over and over again. But truthfully, the reports that the iPhone is heading to Verizon have been gaining momentum , and though the recent reports come from different sources, they are similar in detail. The Wall Street Journal (a frequent outlet of leaks directly from Apple) has been reporting since earlier this year that Apple would start mass-producing a CDMA phone. Many reports named China as the destination of a CDMA device, but on October 6 the newspaper said it would land at Verizon. The source was a person "briefed by Apple."

More recently, in a Fortune profile of Verizon CEO Ivan Seidenberg came additional confirmation. The report on Friday, October 29 includes direct quotes of discussions between Seidenberg and Steve Jobs about the relationship between Verizon and Apple. Without quoting anyone at Verizon directly, Fortune reports the iPhone coming to the CDMA network early next year is "fait accompli."

Kent German/CNET

There have been other signs, too: AT&T raised its early-termination fees to $325 this spring, perhaps in anticipation of customers leaving it and its unreliable network (in certain areas) for Verizon. Also, the news yesterday that Verizon will sell the iPad (bundled with a 3G hot spot) provides proof that the two companies now have a working business relationship. In contrast, a Wired story earlier this year suggested that there were business and contractual details holding the two up from working together.

And Verizon certainly isn't denying that it will get the iPhone anymore. Though a representative said this spring there were no plans to offer Apple products "any time soon," executives are telling a different story now. Here's what Lowell McAdam, Verizon's president and COO, said to CNET in an interview at the fall CTIA show: "I've been saying for a couple of years now that I feel that Verizon's and Apple's business interests will eventually align."

So when could we see the Verizon iPhone?
Reports point to a January introduction of a Verizon iPhone, but it sounds like it would be the same iPhone 4 model currently available from other carriers, except with CDMA chips inside. Though Apple has for the past four years introduced new iPhone products once a year (June or July), its carrier relationships haven't stuck to the same schedule. China Unicom, for instance, began selling the iPhone last September. So it's entirely possible Apple won't wait until June to introduce a Verizon iPhone if it's the current model. Consider also that Verizon CEO Ivan Seidenberg will give a keynote address at the 2011 Consumer Electronics Show on January 6. Though we'd never expect that Apple CEO Steve Jobs would let someone else get the spotlight for an announcement of this magnitude, it's still an interesting data point.

Do we know when AT&T's exclusivity period ends?
Neither AT&T nor Apple have officially announced when AT&T's exclusivity period ends. But if Verizon is allowed to sell the iPhone, AT&T would no longer be the exclusive carrier in the United States.

Will it have support for Verizon's upcoming 4G network ?
If Apple makes a phone for Verizon, then eventually it will be 4G-compatible. However, that may not be the case at first. But don't panic. Here's why this isn't at all unusual for Apple: Apple doesn't make a habit of testing out bleeding-edge technologies on its customers.

A report surfaced in October that Apple would be skipping 4G in its first Verizon phone next year as well as in the expected fifth-generation phone delivered to AT&T (and other international carriers) sometime next summer. Few industry observers were surprised.

This exact scenario played out with the original iPhone in 2007. Despite the growing availability of 3G networks at the time, Apple stuck with AT&T's 2G EDGE network for the first year of the iPhone's life. Only in mid-2008, after much hue and cry from the geek set, did Apple offer the iPhone 3G.

Will I be able to take my AT&T iPhone and use it on Verizon?
No. Verizon and AT&T use incompatible cellular technologies (CDMA and GSM, respectively). Even if the Verizon handset uses both (see below), you'd still need to buy a new phone.

How would the Verizon iPhone differ from AT&T's handset?
The biggest difference, of course, is that it would be CDMA. That means a couple of things for users, mainly no SIM card (CDMA handsets don't use them) and limited overseas roaming (CDMA is used in few places outside the United States). It's entirely probable, however, that Verizon would get a dual-mode handset that would run on the carrier's CDMA network in the United States and then roam on GSM networks abroad.

Yet, CDMA also comes with an important disadvantage. Unlike GSM, CDMA technology won't allow for simultaneous transmission of voice and data. So in other words, those iPhone commercials that show the guy browsing restaurant recommendations while staying on the phone with his friend won't apply to a CDMA iPhone. According to the CDMA Development Group (CDG), however, that reality will change. On October 9, CDG spokesman Brad Shewmake told The Wall Street Journal that simultaneous voice and data will become commercially available in the first half of next year. In case you're wondering, that's a huge development. Battery life also could be an issue, since CDMA phones tend to use more juice than GSM devices. We'll have to see if that holds up.

We don't expect that a Verizon iPhone would look any different. A conspiracy theory suggests that Apple is saving the elusive white iPhone for Verizon. That could be true, but we can't imagine that Apple would do a complete redesign for just one carrier. Inside, we're not looking for any changes, either. Though Verizon could stock its iPhone with some of its signature services like V Cast, we think that's unlikely. Apple will keep tight control over a Verizon iPhone, just as it's done with AT&T. Apple will decide how the phone looks and what apps and features it will have.

But isn't Apple's desire to control the relationship with customers one of the reasons Verizon initially turned down the phone?
Yes, from what we understand. A Verizon exec told USA Today in 2007 that Big Red wasn't happy about Apple "stepping in between us and our customers to the point where we would have almost had to take a back seat...on hardware and service support."

Three years later, we can't imagine that Apple would want it any other way. But given the incredible success of the iPhone on Verizon's biggest competitor, we expect that the carrier is willing to cede control so it can have a piece of a lucrative pie.

I'm an AT&T customer still on contract. Would I pay a penalty if I switched?
Absolutely. Though in its public statements AT&T may be upbeat about losing its iPhone exclusivity, you can bet that the company is running scared. AT&T will use early-termination fees to squeeze every penny it can out of customers who jump to Verizon before their contract is up.

What would this mean for Verizon's Android lineup?
Verizon has invested heavily in Android phones and it has used handsets like the Motorola Droid to distinguish itself from AT&T. The carrier hasn't been shy about slamming AT&T for its network problems. If you need an example, just consider those Verizon television commercials from last year that depicted the iPhone as being a misfit toy.

On the other hand, there's no question that Verizon's Android lineup would take a hit if the carrier partners with Apple. Just how much of a hit remains to be seen. Some people will switch, but there are plenty Droid 2, Droid X, and Samsung Fascinate owners who love their handsets and won't change allegiances. And while we're on the subject, don't underestimate Windows Phone 7 once it arrives at Verizon. That OS will alter the landscape as well.

Would network experience really be better? Is Verizon better prepared?
This remains the great question. And the answer probably isn't what you want to hear.

Many people believe that the Verizon iPhone experience will be better, simply because it's on Verizon. But only time will tell if that's really the case. True, Verizon does have a couple of things going for it. First off, there's no question that Verizon has benefited from AT&T's troubles and the perception that its network couldn't possibly be any worse. And to a certain extent, that's true. Not only does its network continually win awards from outlets like J.D. Power and Associates, but also Verizon's 3G coverage has a larger footprint. True, AT&T's HSPA 3G network technically is faster than Verizon's EV-DO technology, but that doesn't always translate to a better real-world experience for users.

Rather, the real test of the Verizon iPhone experience will be if the carrier has the capacity to handle a huge increase of data-hungry users (some estimates say that Big Red could add up to 13 million new customers in two years). Even if you have a strong signal with great penetration, you need enough back haul, which transmits traffic from the cell tower to the wired network.

Capacity has been largely to blame for AT&T's troubles over the past three years. If you remove iPhone users, for example, the carrier's network wouldn't be getting nearly as much bad press. Indeed, when we test other AT&T 3G handsets we can have a great experience, both in call quality and data reception. iPhones, however, use much more data than your average AT&T handset. And because there are so many of them, they put a greater strain on the network than a basic handset that makes calls. So even though AT&T may have strong signal penetration in an area, it may not have the capacity to support so many iPhone users at one time. The same will be true for Verizon. Just because you have a great experience right now on a Verizon phone, doesn't mean you'll be pleased with an iPhone.

To its credit, Verizon has been boosting capacity, and there are signs that it may be better prepared to deal with the data load. In fact, The Wall Street Journal report reported in October that the carrier has used Android as a test run for increased data use. According to a report from an independent research firm, the average Verizon Android customer uses more data each month than the average AT&T iPhone user (485MB versus 344MB). True, AT&T is handling a much heavier load--it has about 16.5 million iPhone users compared with Verizon's 9 million Android customers--but Verizon has no doubt taken some lessons from AT&T and has not underestimated the capacity it will need.

Of course, we also have to consider the hardware in question. A carrier's network is only one part of the reception equation, and the iPhone's radio and antenna should take some of the blame. Just ask CNET UK's Flora Graham what she thinks of the iPhone's reception across the pond.

At the end of the day, your experience will depend on a variety of factors, including location, urban density, geography, and how many users are on the network at one time. If you live in a location where you currently have great Verizon coverage, you may have a great experience. But then again, you may not.

If enough AT&T customers switched to Verizon, would AT&T suddenly have more capacity?
Yes, there's a chance that AT&T customers could see positive changes if enough people leave. But if that does happen, it won't occur for a while.

Updated October 31, 2010. CNET News reporter Marguerite Reardon contributed to this report.

 

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