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How Verizon Talked Steve Jobs Into an LTE iPhone

By Evan Niu, CFA - Apr 10, 2013 at 7:00PM

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Apple was late to the LTE party compared to the Android competition. Verizon CEO Lowell McAdam recalls how he talked Steve Jobs into releasing an LTE iPhone.

The first 4G LTE-enabled smartphone that Verizon (VZ 0.80%) Wireless launched was the HTC Thunderbolt, which was released back in March 2011. Over the next year and a half, the rest of the Google Android army would follow suit with a slew of LTE devices for Big Red's network. While the technology promised incredibly fast speeds, battery life dampened popularity since early LTE phones were prone to running out of juice prematurely.

It wouldn't be until September 2012 that Apple (AAPL 4.08%) would launch the iPhone 5, its first LTE smartphone. Many questioned Apple's competitive prospects in early 2012, saying the iPhone 4S couldn't compete with newer Android flagships due to the lack of LTE. In technologies where Apple isn't the first mover, its strategy is to perfect it. In the case of LTE, Apple's advances in battery engineering allowed the iPhone 5 to maintain respectable battery life.

Speaking at the National Association of Broadcasters conference recently, Verizon CEO Lowell McAdam provided some insight into how he was able to talk Steve Jobs into launching an LTE iPhone, even though the device wouldn't be released until a year after Jobs' death.

You had me at hello
McAdam notes that video content now comprises roughly 50% of all wireless traffic served up over Big Red's network. Verizon estimates that by 2017, that figure will climb to nearly 66%. With such overwhelming consumer demand for video streaming, 3G technologies were bottlenecking the experience since most video clips would need to buffer before properly playing back. With 4G LTE, streaming video could be viable.

The executive recalled how he convinced Jobs:

I was really trying to sell him and he sat there without any reaction. Finally, he said, "Enough. You had me at 10 Mbps. I know you can stream video at 10 Mbps." And Apple's next phone was LTE.

Naturally, knowing how important video streaming is played a factor in Verizon's partnership with Coinstar to launch Redbox Instant to challenge Netflix. Redbox Instant still isn't a match for the dominant video streamer, but it's a start.

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Verizon Communications Inc. Stock Quote
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Apple Inc. Stock Quote
Apple Inc.
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Netflix, Inc. Stock Quote
Netflix, Inc.
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Alphabet Inc.
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Coinstar, LLC Stock Quote
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