Tuesday, January 11, 2011
Verizon to start selling iPhone on Feb. 10
Verizon Wireless made the long-awaited announcement Tuesday that it will start selling a version of the iPhone 4 on Feb. 10, giving U.S. iPhone buyers a choice of carriers for the first time.
New Yorker Wes Moe can't wait. He has wanted one to accompany his iPad and Mac, but held back because he shares a Verizon plan with his wife, a BlackBerry user.
"I'm super happy with all those other Apple devices, and I want that phone in my hands," said Moe, 32.
In the U.S., the iPhone has been exclusive to AT&T Inc. since it launched in 2007, frustrating many people who for one reason or another haven't wanted an AT&T phone.
"I can't tell you the number of times I've been asked and my colleagues have been asked ... When will the iPhone work on the Verizon network?" said Apple's chief operating officer, Tim Cook, at Tuesday's launch event.
Pre-orders for existing Verizon customers will start Feb. 3. The price will be $200 or $300 with a two-year contract, about the same as the iPhone through AT&T.
Verizon has wider domestic network coverage than AT&T does, particularly for the older "3G" wireless broadband. In the interior of the country, it covers vast areas that AT&T doesn't. In the big cities of the coasts, iPhone service can be spotty because of crowding on AT&T's network.
Nonetheless, it's not clear how many people will flee from AT&T and other carriers.
Unless Verizon's service plans are radically different from AT&T's, Beth Henriksen, 31, said she won't dump her AT&T iPhone 4 any time soon. Verizon did not reveal its service plan pricing on Tuesday. Nor did it say whether it would offer the same unlimited data-use plans it offers for other smart phones. Last year, AT&T stopped offering unlimited data plans to new customers.
She said she has big service problems with AT&T in and around Washington, D.C., but she's hesitant to switch because unlike the AT&T version, the Verizon phone won't be able to surf the Web or use other data connections while a phone call is in progress. Henriksen, a sign-language interpreter, often looks up directions and other online aides while talking to customers.
AT&T activated 11.1 million iPhones in the first nine months of 2010. Analysts now expect Verizon to sell anywhere from 5 million to 13 million this year. Some buyers will be former AT&T customers, but the impact will likely be muted because most iPhone users have two-year contracts, and many are on family and employer plans, which are more difficult to switch from.
Verizon's iPhone version will work only on the carrier's current "3G" network even though the carrier has fired up a super-fast "4G" network in many cities.
Cook said the first generation of "4G" phone chips would have forced some design compromises, which Apple wasn't willing to make. It wasn't waiting for the second generation, either.
"Verizon customers have told us they want the iPhone now," Cook said.
The lack of 4G means the Verizon iPhone will have much lower data speeds than AT&T's, at least in the areas where AT&T has upgraded its 3G to higher speeds. AT&T spokesman Mark Siegel also said international roaming through Verizon will be very limited compared with AT&T.
This summer, AT&T could get another competitive advantage, when Apple is expected to debut a new iPhone model. Cook wouldn't say if Verizon would get it right away.
Though Verizon Wireless is the largest wireless carrier in the country, with 93.2 million subscribers, it has been losing out to AT&T in the battle to sign up high-paying smart-phone subscribers because of AT&T's iPhone exclusivity. In the last few years, Verizon has promoted phones with Google Inc.'s Android operating system as its alternative to the iPhone.
Verizon's iPhone 4 is identical in form and function to AT&T's but has one feature AT&T's does not: It can act as a portable Wi-Fi "hot spot," connecting up to five laptops or other devices to Verizon's 3G network through Wi-Fi. It's a feature that's been offered on other smart phones, usually for an added monthly fee.
The Verizon iPhone is the first one that works on so-called "CDMA" networks, a standard also employed by Sprint Nextel Corp. and carriers in China and South Korea. Cook said the phone wouldn't be exclusive to Verizon, but he didn't say what other carriers might get it. Analysts don't expect Sprint to sell it.
Verizon Wireless is a joint venture of New York-based Verizon Communications Inc. and Vodafone Group PLC.
Shares of Verizon Communications fell 56 cents, or 1.6 percent, to close Tuesday at $35.36. The shares are still close to a two-year high of $37.70, set last week. Apple shares lost 81 cent to $341.64, while AT&T lost 43 cents, or 1.5 percent, to $27.91.
Verizon issued its press release at 11:11 a.m. on Jan. 11, 2011, or 1/11/11.