For months, we've been hearing rumors that Verizon (NYSE: VZ) is muscling in on AT&T's (NYSE: T) exclusive deal to distribute Apple's (Nasdaq: AAPL) iPhone. Now we know why: Verizon chairman and CEO Ivan Seidenberg covets the iPhone.
"This is a decision that is exclusively in Apple's court," Seidenberg told investors during its last earnings call. "We obviously would be interested [if] at any point in the future they thought it would make sense for them to have us as a partner. And so we will leave it with them on that score."
Sorry, Mr. Seidenberg, but I don't believe you. The ball is in your court, for three reasons.
First, yours is a primarily CDMA network, and the iPhone uses a GSM radio. That's a gulf that neither you nor Apple could overcome with technology changes. The easiest solution, for now, would be for Apple to build an iPhone with a CDMA radio. Trouble is, Apple doesn't have a history of building to others' tech specs; rather, it's known for creating its own. More recent dealings with Intel (Nasdaq: INTC) suggest that Apple is open to change in this area, but "open to change" isn't the same as "willing to change."
Second, Deutsche Telekom's (NYSE: DT) T-Mobile just introduced the first no-contract unlimited plan, which means the days of big subsidies and exclusive partnerships are probably numbered. Make a deal that works for Apple, and the iPhone can be yours.
Third, the iPhone carries 50% of the smartphone traffic in the U.S. today, mobile researcher AdMob reports. Research In Motion (Nasdaq: RIMM), Palm (Nasdaq: PALM), and even the varying Android handsets are laggards, while AT&T is monopolizing the market for high-value data traffic.
You know this isn't a sustainable formula for Verizon Wireless, sir. Posturing won't solve the problem. Do your investors a favor and talk with Apple about a deal.
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