Apple's tablet will use Verizon's 3G network, sources say
Wall Street analyst claims multiple carriers to support device, but ‘definitely Verizon’ — Computerworld - Apple's tablet will use Verizon's wireless data network to connect to the Internet when users are out of range of a Wi-Fi hotspot …
Context & Ripple Effects
This report lands three-plus weeks before an Apple tablet unveiling that people briefed by the company have said is coming this month, and it extends a thread that began when Business Week reported in December 2009 that Verizon was preparing for the iPhone. A Wall Street analyst now says multiple carriers will support the tablet, with Verizon 'definitely' among them — both claims remain unconfirmed, sourced to analysts rather than Apple.
The significance is relational: Apple and Verizon are already reported to be negotiating a summer 2010 CDMA iPhone launch, with the two sides believed to be at odds over pricing. A tablet deal would be a second, separate data-device relationship between the companies, arriving while AT&T still holds iPhone exclusivity.
First-order effects
- If the sources are right, Verizon gains a marquee Apple data device on its 3G network at launch — new subscription revenue and a flagship counterweight to AT&T — without having settled the harder iPhone question.
- Apple's tablet would ship with out-of-Wi-Fi connectivity through a carrier whose coverage map differs from AT&T's, giving buyers a choice of networks rather than a single bundled option.
Second-order effects
- With pricing reportedly the sticking point in CDMA iPhone talks, the tablet could function as a lower-stakes first contract that tests the Apple-Verizon working relationship before handset-level economics get negotiated.
- AT&T's exclusivity position comes under pressure from two directions at once — a Verizon-connected tablet now and a possible Verizon iPhone later — weakening the bundle that has defined its US smartphone advantage.
Third-order effects
- If the pattern holds, single-carrier exclusivity stops being the default structure for marquee US devices: carriers compete on network and terms for the same hardware, shifting bargaining power toward the device maker.
- Carrier-by-carrier hardware variants (the rumored CDMA track) would push Apple toward maintaining multi-radio product lines, a structural cost it has so far avoided by building around GSM carriers.
The trend: US wireless is drifting from exclusive carrier-device lockups toward multi-carrier distribution of flagship hardware, with Apple's scale letting it set terms across rival networks.