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Verizon and the iPhone: Nothing to report...yet

USA Today says Apple is in high-level talks about bringing the iPhone to Verizon Wireless. The subtext largely boils down to two words: network and negotiation.

2 min read

This was originally posted at ZDNet's Between the Lines.

Apple is reportedly talking to Verizon Wireless about bringing the iPhone to the carrier, according to USA Today. And Verizon executives aren't exactly pooh-poohing the reports.

On a conference call to discuss first-quarter earnings, Verizon operating chief Dennis Strigl said the company is always talking to device makers, but had "no announcements to make relative to Apple today."

USA Today reported that Apple is in high-level talks about bringing the iPhone to Verizon Wireless. The news comes just a few days after AT&T CEO Randall Stephenson said that the company was looking to extend its exclusive pact with Apple. Following Verizon's strong first-quarter earnings, Strigl said the following:

We're always open to discussions with any supplier. We have no announcements to make relative to Apple today. Historically we haven't been dependent on any one device.

The message: Verizon Wireless could very well be talking to Apple--not that Strigl would say so directly. And Verizon is in a strong position since AT&T had its iPhone bump and the wireless carrier is still performing well. Reading between the lines, it could be that Apple needs Verizon Wireless' 86.6 million customers more than the wireless carrier needs the iPhone. Apple has an exclusive deal with AT&T, which has 78.2 million subscribers, but the iPhone's addressable U.S. market could more than double with a Verizon deal.

A move to Verizon would be notable because the iPhone would be available on a CDMA wireless network compared to AT&T's GSM technology, according to USA Today. But is this a really big deal? Other phones work on both technologies.

Larry Dignan/ZDNet

This Verizon-Apple story largely boils down to two words: network and negotiation.

First, Apple is likely to want to expand iPhone distribution to other networks. And Verizon Wireless is the second half of a U.S. wireless potential duopoly. Why wouldn't Apple want to lock down the U.S. wireless market by having the two largest carriers in the fold?

And then there's network reliability. Verizon Wireless' coverage is just better than AT&T's. And as Om Malik notes, Verizon Wireless could give Apple an LTE network to play with. The iPhone with better coverage and 4G could be interesting. Verizon executives talked up their LTE buildout.

But this Apple-Verizon story probably comes down to negotiation. AT&T put its cards on the table. It really wants to extend its deal with Apple. Apple obviously wants to explore other options. The game: Squeeze AT&T into a better deal. Verizon is more than happy to play along.

Larry Dignan/ZDNet