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Sign No. 1 of the Apocalypse: Verizon iPhones?

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The AT&T (NYSE: T  ) stranglehold on Apple (Nasdaq: AAPL  ) iPhone users is about to end. In other news of the apocalypse, keep an eye out for four mysterious horsemen, three unbroken winters, and the sudden appearance of dwarf planet Nibiru.

All right, so maybe it's not a sign of the end if Apple ends its AT&T exclusivity in the U.S. market. After all, the iPhone is available from multiple carriers in other markets such as France, Sweden, and Australia -- and the multicarrier approach appears to boost the iPhone's market shares in those countries. This American strategy shift is long overdue, in my opinion. Maybe Steve Jobs simply wanted to cement the cut-rate data plan for the soon-to-launch iPad before dropping this bombshell on AT&T?

According to The Wall Street Journal, Apple is working up an iPhone model that's compatible with the wireless 3G standards deployed by Sprint Nextel (NYSE: S  ) and Verizon Wireless, a joint venture between Verizon (NYSE: VZ  ) and Vodafone (NYSE: VOD  ) . Of those two options, the Verizon network would make more sense because it already reaches more than 90 million customers and broadens the iPhone's reach considerably.

Don't discount the Vodafone component, either. That multinational giant already sells iPhones in many markets worldwide, so there's a working relationship in place already.

There is also an outside chance that the next iPhone model might move to LTE 4G technology. That would be another way to hook up with Verizon, which is rolling out a 4G network in a generous handful of U.S. markets this year, with a wider reach planned for 2011. The rumor mill is sending mixed messages about both LTE iPhones and new models that could accommodate Verizon's 3G network standards, so nothing is set in stone yet on that point.

Offloading a few million iPhone users to Verizon would lighten the load on AT&T's overburdened data network while putting Verizon's to a whole new test. Verizon's current crop of smartphones from Research In Motion (Nasdaq: RIMM  ) and multiple Google (Nasdaq: GOOG  ) Android partners have yet to seriously challenge Verizon's data capacity. Though the iPhone represents most of AT&T's growth opportunity today, introducing Verizon into the mix might be paradoxically good for AT&T.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You cannot convince him that the world will end in 2012. Sprint Nextel is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (6) | Recommend This Article (7)

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  • Report this Comment On March 30, 2010, at 12:55 PM, conradsands wrote:

    Verizon and AT&T = The Most Expensive Wireless Calling Plans in America

    Wireless Profit Margins:

    Verizon Wireless = 45 percent

    AT&T = 39 percent

    Sprint = 18.2 percent

    Now we know where Verizon and AT&T get all that money to run commercials 24x7, pay out huge executive bonuses and hire armies of lawyers and lobbyists -- the American consumer.

    Not all pricing claims are the same. The advantages consumers get with Sprint’s $69.99 Everything Data plan include nationwide unlimited text and picture messaging, unlimited Web, unlimited GPS navigation and unlimited calling to any mobile in America, compared to AT&T and Verizon’s $69.99 pricing plans, which are good for unlimited talk only. And Sprint’s $69.99 plans are available with any phone while AT&T and Verizon’s are limited to lower-end phones.

    AT&T and Verizon have attempted to confuse the marketplace by lowering their pricing to $69.99, but theirs are for calling only. In today’s economic environment customers are interested in more than just voice pricing. They also want the best value for all the other things they rely on their wireless phone for and Sprint delivers. Sprint's Everything Data plans start at $69.99 per month and include Any Mobile, Anytime for unlimited calling with any U.S. wireless user, plus unlimited text, picture and video messaging, e-mail, Web browsing, social networking and more.

    4G wireless--which operates at speeds up to 10 times greater than today's 3G networks--could become a reality for many businesses and consumers over the coming year. Sprint, the current 4G leader, says it will introduce its first 4G smartphone before mid-year.

    Sprint’s fourth-generation phone -- the HTC EVO 4G -- will be available this summer and run Google's Android software.

    The phone also will be able to act as a mobile hotspot, allowing customers to connect up to eight Wi-Fi enabled devices. As a result, people could use the phone for their Internet connection for a laptop or desktop computer.

    Where 4G isn't available, the phone will use Sprint's 3G network. It will be available through all the usual Sprint channels and RadioShack, Best Buy and Wal-Mart.

  • Report this Comment On March 30, 2010, at 1:00 PM, gslusher wrote:

    Wow! Thanks, conradsands, for the info. You're worth every penny that Sprint pays you!

  • Report this Comment On March 30, 2010, at 1:00 PM, gslusher wrote:

    Wow! Thanks, conradsands, for the info. You're worth every penny that Sprint pays you!

  • Report this Comment On March 30, 2010, at 5:22 PM, plange01 wrote:

    for all the endless apple talk it never budged att's stock price...

  • Report this Comment On March 30, 2010, at 5:25 PM, plange01 wrote:

    sprint is a great stock to own but getting involved with android? is a is nothing more than a online phone directory not a software maker for cell phones or anything else for that matter....

  • Report this Comment On April 01, 2010, at 11:28 AM, patronanejo wrote:

    What the hell is AT&T complaining about? I'm on Verizon but this is a no-win situation for Big Red. Expectations for AT&T are already low, but if the inevitable comparisons somehow favor AT&T--which has been installing an order of magnitude more buildout than VZW as of late--Verizon is due for weeks of horrible publicity, subscriber defections, spiraling stock prices, and corporate shakeups. I'm going to hold on to VZW stock until the guaranteed iPhone bump happens. The ensuing bear-mauling is purely theoretical, but there's not much immediate upside after the day or so of bull bump anyways, so I'm gonna sell right after. Verizon has a history of rushing into hardware releases (I'm looking at you, Storm); they really need to do a limited release somewhere (fully subsidized of course--can I recommend Atlanta?) before they jump in with both feet. I assure you this scenario is going to start playing out in a lot of peoples' heads eventually--if Vodafone is on the ball, they will have started thinking about a buyback plan to inoculate their shares against a strong headwind of trading volume. If you're willing to bet on them being that smart, that would make now a pretty good time to buy. Verizon had better have a lot of cash on hand if people start catching on.

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