The rumor…again…is that Apple is working on developing a CDMA version of the iPhone and plans to begin distributing the popular smartphone through Verizon in the near future, ending its exclusivity arrangement with AT&T. The move could benefit Apple and Verizon, but will also be an advantage for existing AT&T customers.
Analysts have been predicting that Apple could dramatically increase iPhone sales by ending exclusivity. Of course, that conclusion doesn’t take any extra-sensory perception to arrive at. If you have more or less saturated the market for iPhones at one wireless provider, and you add another–even larger–wireless provider, it makes sense that iPhone sales will increase accordingly.
Verizon has taken some jabs at the iPhone with its campaign for the Android-based Droid smartphone. However, it has directed most of its witty ad campaigns at slamming AT&T’s network issues, and has always left the door open to work out a deal with Apple to market the device.
Being the largest wireless provider–with the most 3G network coverage of any wireless provider–in the United States, and providing customers with a choice between two of the hottest smartphones available–the Droid and the iPhone, would be a coup for Verizon. Existing customers will appreciate having options, and prospective customers will be even more likely to select Verizon.
So, where does that leave AT&T? Its fortunes–good, bad, or indifferent–have been tied to the success of the iPhone since its launch back in 2007. The iPhone has been wildly successful, and that has brought customers into the AT&T fold, but AT&T has also faced intense and repeated criticism over the speed and availability of its 3G data network, and issues with dropped calls. The iPhone has been a double-edged sword for AT&T.
AT&T has expanded its smartphone portfolio as well–adding Android-based devices, and announcing plans to add Palm WebOS smartphones later this year, and it is already investing in improving and expanding its network. News of a Verizon iPhone will drive AT&T to double its efforts and make sure its network is prepared to go head-to-head with Verizon, though–a tremendous benefit for existing iPhone users and AT&T customers in general.
AT&T also recently announced plans to roll out its MicroCell femtocell device nationwide. The MicroCell connects to a broadband Internet connection and basically creates a personal 3G network hotspot in a customer’s home. Customers that have the MicroCell can ensure a maxed out signal even in areas that AT&T’s network doesn’t even reach.
In an ideal world, the competitive nature of wireless service in and of itself would be incentive enough for AT&T to push the envelope and fight to deliver superior service. But, the iPhone exclusivity arrangement created a situation where AT&T had a unique edge already. Removing that exclusivity levels the playing field and will force AT&T to be much more aggressive at improving its network infrastructure to compete with Verizon and other wireless providers.
If your business is a Verizon customer, you may soon (finally) have the option of using the Apple iPhone. If your business relies on AT&T, you are in luck. Hopefully, AT&T will soon offer the MicroCell for business customers as well, but in the meantime you will still benefit from AT&T’s investment in the network.
Even businesses that aren’t Verizon or AT&T wireless customers benefit when the competition is more even and choosing a wireless provider isn’t dictated by device exclusivity.