The Most Disruptive iPhone Yet

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Remember when I said Verizon (NYSE: VZ  ) isn't ready for the iPhone? Forget it.

Citing an anonymous source in direct contact with Apple (Nasdaq: AAPL  ) , The New York Times on Friday confirmed that the two companies plan to introduce an iPhone 4 for Verizon's network "early next year."

Crow, meet mouth. Mouth, crow. (Nom nom nom.)

So far, we don't have any of the details of the arrangements between Apple and Verizon. What we do know is that Verizon plans to roll out an initial version of its 4G network, built on a technology known as Long-Term Evolution (LTE), in 38 cities before the end of the year. Denver, where I live and work, is one of those cities.

We also know that AT&T (NYSE: T  ) , demonstrating its affection for open relationships, plans to carry Microsoft's (Nasdaq: MSFT  ) new Windows Phone 7. The former Ms. Bell has been carrying handsets based on Google's (Nasdaq: GOOG  ) Android OS for months.

Timing is where this deal gets really interesting. The new iPhone should be out weeks after Verizon officially lights up its LTE network. Apple, in a coup, could have the first smartphone built for that network.

To be fair, it wouldn't be the first 4G smartphone. Samsung and HTC already have smartphones designed for Sprint's (NYSE: S  ) 4G WiMAX network, built in concert with Clearwire (Nasdaq: CLWR  ) . But neither Samsung nor HTC has the brand allure of Apple, and neither of its smartphones is built for an LTE network.

We also know from surveys that iPhone users and wannabe buyers crave the opportunity to choose a carrier other than AT&T -- one that lacks a history of dropped calls. Unfair? No doubt. AT&T has made huge improvements, but as often happens in business, perception has become reality. For Apple and Verizon, that's a huge opportunity they'll soon be able to take advantage of.

Now it's your turn to weigh in. Would you pay a premium for an LTE iPhone? Please vote in the poll below, and then leave a comment to explain your thinking.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Apple, Google, and Microsoft and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy worked up a good sweat today. Well done, lads.

Read/Post Comments (10) | Recommend This Article (16)

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 October 10, 2010, at 12:39 PM, kevinj46 wrote:

    For those of you who are dying to get on Verizon..I think you will be is NOT AT&T's network that is the is the Iphone..

    Lets see..the same dropped calls..but not being able to use data and voice at the same time...hmmmmmmm....tough decision...

  • Report this Comment On October 10, 2010, at 1:13 PM, kramsigenak wrote:

    @kevin. Your first point is invalid... iPhone does not drop calls significantly more than any other phone. In fact, it is highly reliable compared to any smart phone. In every other way, the iPhone is light years ahead of its peers.

    Your second point about data and voice at the same time may be valid... but I doubt for long.

  • Report this Comment On October 10, 2010, at 1:21 PM, gerrard36 wrote:

    Kevin - you're wrong here. My wife and I are on the ATT family plan, I have an iphone, she has a Blackberry, we both have the same issues, same dropped calls.

    And, I took my iphone to various countries abroad, England, Denmark, Italy, Switzerland.... running it on a different network: no dropped calls, improved sound quality, immensely better experience all across the board.

    The problem is ATT, seriously. Can't wait for Verizon to come in.

  • Report this Comment On October 10, 2010, at 1:39 PM, DefunctAcct wrote:

    Kevin likely does not own an iPhone and specifically does not have an iPhone 4.

    I just took mine on a business trip through Hong Kong, Shang-Hai, Singapore and Malaysia. The phone just worked.

    When we are back state-side, the only time we have intermittent dropped calls was when camping on the remote beaches of Oregon. Even then, out of about 15 trials, only 4 lost signals.

    iPhone 4 is thus far the best iPhone of the lot. I was not so taken by iPhone 3G nor the 3GS.

    Verizon is not the only company deploying LTE. T-Mobile is very actively doing this as well. If Apple cannot work with Verizon, T-Mobile is certainly a good candidate.

  • Report this Comment On October 10, 2010, at 1:47 PM, Putty12 wrote:

    reception varies by geopraphic location and time of day. Having a choice is a good thing for the consumer. I'm on AT&T now and doubt I'll switch to Verizon because I don't have many dropped calls and most of the people I call are on AT&T so the minutes are free.

  • Report this Comment On October 10, 2010, at 5:15 PM, conradsands wrote:

    Beware of Verizon ... not only expensive but it has other issues ...

    From ABC News …

    Verizon Wireless to Pay Back Customers for Accidental Data Fees

    More than a year ago, Teresa Dixon Murray says she started to feel something wasn't right about her family's Verizon Wireless cell phone bill.

    "I was getting $1.99 charges on usually two out of my three accounts," said Murray, a reporter with the Cleveland Plain Dealer and the mother of two teenagers with cell phones.

    She said that her family was being charged for Internet use but no one was using the Internet. The mystery charge even appeared, she said, when one of her sons' phones was locked away after he'd lost phone privileges.

    "I knew absolutely, positively for sure. No accidents. No excuses, that this was wrong," she said. "And I was absolutely livid.”

    After months of complaining to Verizon, Murray wrote a newspaper column. After that, she got the company's red carpet treatment and her money back. Her situation was settled -- but thousands wrote to her saying that they'd had the same problem.

    Now thanks to a Federal Communications Commission investigation into Verizon Wireless, some of those customers could see credits of $2 to $6 on their October or November bills.

    Last year, the FCC questioned Verizon Wireless about a $1.99-a-megabyte data access fee that had appeared on the bills of customers who didn't have data plans but who had accidentally initiated data or Web access by pressing a button on their phones.

    Verizon Wireless said that it had stopped charging such fees when a customer started using a data service and then shut it off quickly. It blamed the continued overcharging on a software glitch and has agreed to pay up to $90 million in refunds to affected consumers.

    The FCC said Sunday that it had been examining the charges after consumers' complaints.

    "We're gratified to see Verizon agree to finally repay its customers," FCC Enforcement Bureau Chief Michele Ellison said in a statement.

    "The carriers have 50 [million], 60 [million] or 90 million customers and they charge everybody every month a few extra bucks," said Ed Finegold, Validas' chief analytics officer. "That adds up to billions in profits for them, so they have every incentive in the world to do it."

  • Report this Comment On October 10, 2010, at 5:16 PM, conradsands wrote:

    In a poll that asked 4,040 smartphone users in March how many dropped calls they had experienced in the past three months, AT&T — the exclusive U.S. carrier of Apple's iPhone and iPad mobile devices — came in dead last among the country's four largest carriers.

  • Report this Comment On October 10, 2010, at 5:16 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

    Now we know where Verizon (the 10th leading U.S. lobbyist) and AT&T (the 12th leading U.S. lobbyist) get all that money to run commercials 24x7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists -- the American consumer.

  • Report this Comment On October 10, 2010, at 8:07 PM, SteveTheInvestor wrote:

    You are absolutely correct Conrad....

    Thus the reason I refuse to use a smart-phone. My wife and I have phones that allow talk and text and it costs about $30/month TOTAL.... for both phones. We got a great deal years ago and just stuck with it. I have to ask why I can't get even one smart phone for less than $80/month. I suppose the answer is that this is the price that the market will bear. I know several people that pay in excess of $120/month for their iPhone. That just seems absurd, but it does clarify where the carriers are making all their money.

  • Report this Comment On October 11, 2010, at 10:31 AM, spokanimal wrote:

    Right now, I'm getting wireless downloads at 8 Mbps with no monthly limits with Sprint...

    ... if someone can give me a good reason why I would wait around all winter for Verizon to offer me the same thing with "tiered pricing", please humor me.


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