Verizon may pay Apple for iPhone semi-exclusive

A Wall Street analyst is reporting that Verizon may be willing to pay Apple to keep the iPhone off T-Mobile USA and Sprint Nextel networks.

Verizon Wireless may be willing to pay Apple to keep the iPhone off competitors' networks when the carrier eventually gets the device in 2011, one Wall Street analyst says.

On Monday Kaufman Bros. analyst Shaw Wu published a note to investors in which he cited unnamed sources who indicated that Verizon is willing to pay Apple to keep the iPhone partially exclusive. Since its launch in 2007, the iPhone has been exclusive to AT&T in the U.S. Rumors have floated around for months that Verizon will get a version of the device in early 2011 .

According to Wu, Verizon "does not want the iPhone, the hottest selling smartphone, available on T-Mobile USA and/or Sprint and may be willing to pay for exclusivity to itself and AT&T."

The iPhone 4, Apple's latest iteration of the iPhone, is still one of the best -selling smartphones on the market. Apple sold about 14.1 million last quarter . Wu also notes in his research report that sales of Google Android phones on Verizon's network have begun to "lose some of its luster." Wu also noted that sources at Verizon indicate that Verizon doesn't have much faith in new BlackBerry devices from Research In Motion either, which will have the company's new BlackBerry 6 OS.

It's easy to see why Verizon would want a semi-exclusive on the iPhone. The exclusivity has been a boon for AT&T, which has racked up millions of new subscribers because it has the exclusive contract to sell it.

What's not so clear is why Apple would consider limiting sales once its deal with AT&T is finished. That said, AT&T and Verizon control the bulk of the wireless market in the U.S. Verizon Wireless is the largest U.S. carrier with 93 million subscribers. AT&T has 92.8 million subscribers. Meanwhile, Sprint only has about 49 million subscribers and T-Mobile USA has 34 million subscribers.

Verizon declined to comment on the most recent speculation. The company has also not officially commented on when the iPhone will come to its network. But many in the industry see the companies' iPad deal as a sign a Verizon iPhone is imminent. In October, Verizon struck a deal with Apple to sell the iPad and to bundle its MiFi 2200 Intelligent Mobile Hotspot. Verizon cannot offer a 3G compatible iPad on its own network. So the company sells the Wi-Fi service bundled with the 3G MiFi modem .

 

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