No iPhone For You, Verizon!

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So Motorola (NYSE: MOT  ) and Verizon (NYSE: VZ  ) posted a full-page ad for the upcoming Droid X smartphone in recent issues of The New York Times.

Ho-hum, business as usual. The ad touts phone features like the fast processor, the coming update to Google's (Nasdaq: GOOG  ) Android version 2.2, and the amply equipped camera. The Droid X has a "gigantic" screen and "huge capacity," making it "the ultimate smart phone." So far, so trite. You would expect nothing less from a phone so new and cutting-edge that it's not even hitting stores for another two weeks.

But when you read the whole thing, you'll see something unexpected: "And most importantly, it comes with a double antenna design. The kind that allows you to hold the phone any way you like and use it just about anywhere to make crystal clear calls."

For those who have been living under a boulder since Apple (Nasdaq: AAPL  ) released the iPhone 4, let me spell out what that means: the Droid X won't lose reception if you hold it the wrong way, unlike Apple's latest and greatest.


All is fair in love and marketing,at least until the courts tell us otherwise, but there's an important subtext here. While it looks like Motorola designed the ad, explaining the veiled vitriol, Verizon must have vetted it before letting the thing go to print. After all, there's a prominent Verizon logo on the ad and the two have worked closely together marketing the Droid series. And that's not the kind of jab you would throw (or in this case allow to be thrown) at a prospective partner. To me, this is a clear sign that Verizon won't get iPhones in inventory anytime soon.

I still believe that Apple's best bet for beating Android in the American market is to expand to networks beyond just AT&T (NYSE: T  ) . Not only is Ma Bell's service often criticized, but simply giving your customers a choice would expand the addressable market right away.

But it looks like Verizon is not on deck. This makes sense for technical reasons, which also remove Sprint Nextel (NYSE: S  ) from the equation. The only other mobile network operating an iPhone-compatible 3G network over here is T-Mobile, by Deutsche Telekom (NYSE: DT  ) . If you want more than two choices, you'd have to go to Canada.

So if Apple is expanding its iPhone reach in the States anytime soon, T-Mobile would pretty much be it. Verizon would probably tell you the same thing itself.

Where do you see the iPhone going next? Discuss in the comments below.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Sprint Nextel is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Google. Try any of our Foolish newsletters today, 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 (16) | Recommend This Article (31)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 01, 2010, at 3:41 PM, RRGY2K wrote:

    Verizon wants to control all access to the apps. Apple isn't about to let them get away. The problem is, we need open systems, so that we can choose, buy and install the things that work best for us. Neither of these vendors is on our side.

  • Report this Comment On July 01, 2010, at 3:42 PM, kitikatism wrote:

    As soon as the At&t contract is up with Apple, the iPhone will go to all other networks. I don't think Apple is gonna do another exclusive contract. What would be the point?

  • Report this Comment On July 01, 2010, at 4:02 PM, NoSalt wrote:

    On July 01, 2010, at 3:42 PM, kitikatism wrote:

    As soon as the At&t contract is up with Apple, the iPhone will go to all other networks. I don't think Apple is gonna do another exclusive contract. What would be the point?


    Exclusive contracts = more money. That's one of the reasons Apple went with AT&T -- they agreed to give Apple a higher percentage in exchange for exclusive rights. The other reasons were purely technical (GSM vs CDMA) and time-line driven.

    It will be interesting to see if Verizon completely embraces Android and goes for a full-out war against Apple. Android and iOS are the future of mobile computing. Both are good and have the potential to be great, especially paired with a reliable cloud computing solution and dependable, fast, and secure wireless network (4G and beyond).

  • Report this Comment On July 01, 2010, at 4:08 PM, Henry3Dogg wrote:

    So watch for the Droid 3 which you will find has an antenna just like the iPhone 4's, by which time it will be the best thing ever and there will be a new hyped up nonsense to attack Apple about.

    The iPhone 4 has the best 3G reception in poor signal areas bar none, because of that antenna.

  • Report this Comment On July 01, 2010, at 5:11 PM, kitikatism wrote:

    Exclusive contracts may be more money for that contract but selling more phones on all networks should be much much more. Samsungs new phone on all networks (GSM and CDMA) should prove to be the smarter move. Why would Apple want to limit their customer base again? Its like if Ford only sold vehicles to left handed people.

  • Report this Comment On July 01, 2010, at 6:11 PM, rlhoman wrote:

    I would hope that Verizon would decide this on a purely financial basis. No use letting ego get in the way of being one of 4 networks to offer iPhone if it makes them money. But also no point in offering it if they can make more money by sticking to Android phones. I would suspect Apple will push them as close to the line as they can. But Android's apparent success gives them a large push back.

  • Report this Comment On July 01, 2010, at 6:27 PM, carolinblueheron wrote:

    I was in NYC recently and my iPhone failed to function the entire week I was there. I don't know whether it was AT&T's unreliable "cloud" or the phone---I can not wait to switch!

  • Report this Comment On July 02, 2010, at 12:01 PM, beernose wrote:

    You folks are forgetting another key piece of the puzzle: simultaneous voice and data. Verizon can't do it. All those AT&T and iPhone ads which tout talking on the phone and then looking up a restaurant while on the phone, or surfing the web while talking to your mom, etc......Verizon can't do it with their 3G technology. They must wait until 4G before they can do it.

    In theory, a handset vendor can build two phones inside a single handset in order to mimic the ability to do both simultaneously. But that burns up a lot of battery power and real-estate inside the phone (and twice as many antennas to worry about!)

    And truth be told, Apple hasn't held back from making ads which highlight Verizon's weaknesses, so I dont think there's any love lost there.

  • Report this Comment On July 09, 2010, at 11:44 AM, tbarth42 wrote:

    As far as I am concerned, having switched from ATT a few years ago, ATT is the quickest way to change your iPhone into an overly expensive iPod. As much as i would like an iPhone I can't handle ATT's poor service. Besides, I already own an iPod.

    I have friends in both Europe and China. In both places, you buy your phone and you (separately) buy your phone service. When will America wake up and realize these things do NOT have to be paired? I was hoping that Apple would partner with Verizon. It would have radically increased their sales of iPhones but i grew tired of waiting. I needed a new phone so I ordered the new Droid Incredible (HTC). I'll let you know how it is in August...

  • Report this Comment On July 09, 2010, at 12:35 PM, StevePalmo wrote:

    Yet, Bloomberg news reported last week that Verizon will get the iPhone as of January 2011 due to the upgraded faster-than-4g-network technology called LTE. So I assume Bloomberg is not reporting inaccurate information. In the meantime I will use my free Palm Pre Plus from Verizon and connect to the free mobile hotspot on my Pre via my iPad. I will definitely be getting the iPhone on Verzon but will wait until the initial bigs are worked out on the new iPhone for at least 1.5 years when my Palm Pre contract ends.

  • Report this Comment On July 09, 2010, at 2:11 PM, dlchase24 wrote:

    As I understand it, T-Mobile's 3G network operates on a different frequency that AT&T's 3G network, meaning there would be just as much necessity for technical changes in a T-Mobile handset as a Verizon one, although T-Mobile does use GSM (like AT&T). Additionally, doesn't Japan use a CDMA based cellular network? Meaning the knowledge base for releasing a CDMA (aka Verizon) iPhone 4 could already be present without additional research or development.

    In my opinion, the reason we won't see a Verizon iPhone is because it's just not Apple's way of handling things. They have a long history of sticking to one path to provide a consistent experience on their devices and to provide an iPhone on two networks could mean different experiences (or better translated, different problems). In fact, if Apple does release an iPhone for Verizon, I'd expect them to stop releasing iPhones for AT&T and go exclusively Verizon.

    It's also worth noting, Apple went to Verizon first and was shot down. Wouldn't surprise me to see Apple deny everyone a Verizon iPhone out of spite. Before you take exception with that comment, keep in mind this is the same company who told their owners they hold the phone the wrong way.

  • Report this Comment On July 09, 2010, at 3:18 PM, weihou258 wrote:

    From dictionary, "Phone" is An instrument that converts voice and other sound signals into a form that can be transmitted to remote locations and that receives and reconverts waves into sound signals.

    "i" means "in-" = No/not. iPhone = "not a phone". What is next, iTV, iCar,..... Apple needs to pay share holders divident.

  • Report this Comment On July 10, 2010, at 4:34 PM, rumicro wrote:

    What does "t" in divident mean?

  • Report this Comment On July 10, 2010, at 11:16 PM, LazyOldMan wrote:

    Geez, Verizon doesn't want the iPhone. Said has it publicly enough times... Jobs is all about the deal with AT&T and they just did it again with the iPad. Get the message, Steve Jobs and Randall Stephenson act like a couple of lovers, totally infatuated with each other... and unable to see any fault in the other. If Steve wanted to have a great CDMA iPhone he'd make a Sprint phone with WiMax 4G. But, he is going to wait for AT&T to come out with wide spread LTE sometime in the next decade. AT&T makes big bucks on the wireless business but spends it's capital on the wireline, trying to get U-Verse up for instance. And while it is true you have to have the back-haul service to make it all work you can cannibalize the wireless customers forever.... There is another choice in Android.... not quite as polished as the iPhone yet, but getting there... fast.

  • Report this Comment On July 10, 2010, at 11:19 PM, LazyOldMan wrote:

    Sorry about the wording... I got interrupted and should have reread what I typed before posting...

  • Report this Comment On July 11, 2010, at 6:30 PM, ddagostino wrote:

    What doesn't make sense is that you can't find an iPhone user that is having problems with their phone's reception (in the Midwest). Verizon is clearly a control fanatic and that will not work with Apple (who also has some major control issues...). Don't be on an iPhone with Verizon for the foreseeable future.

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