Whither Verizon?
Speculation over the iPhone coming to Verizon Wireless will continue until it actually happens. Loyal Verizon customers want iPhones, and AT&T continues to take it on the chin. The promise of a huge untapped market is enough to keep analysts and investors buzzing indefinitely.
Context & Ripple Effects
The Verizon-iPhone question has been building since December 2009, when Business Week reported that Verizon was preparing its network for the iPhone, and gained official weight in April when the Verizon CEO told Apple directly of his company's interest. What remains is pure rumor — no announcement, no timeline — yet the story refuses to die because both halves have an incentive to keep it alive.
On the other side of the ledger sits AT&T, whose exclusivity is simultaneously its crown jewel and its biggest liability. The carrier has spent May shoring up defenses: the 3G MicroCell went nationwide on May 16, the Palm Pre Plus launched on AT&T the same day with handsets subsidized below retail on two-year contracts, all while AT&T's Q1 results showed 1.9 million wireless additions driven by iPhone activations. The pattern reads as a carrier monetizing a hit phone while trying to blunt the network complaints that make customers defect.
First-order effects
- AT&T keeps booking iPhone-driven subscriber growth (1.9 million adds last quarter) but absorbs ongoing brand damage from service complaints, so it is spending on stopgaps — the nationwide MicroCell rollout and below-retail handset subsidies — to retain the very customers grumbling loudest.
- Loyal Verizon customers who want iPhones sit out upgrade cycles or defect, keeping pressure on Verizon to convert its stated interest into an actual agreement with Apple.
Second-order effects
- AT&T's defensive moves force competitors to respond in kind: Verizon must show it can match the iPhone experience without the device (its own smartphone lineup), while handset makers like Palm get distribution windows at AT&T precisely because the carrier needs alternatives to showcase.
- Analysts and investors keep valuing both carriers on an event that hasn't happened, meaning any genuine signal — a network test, an executive comment — moves expectations before any contract exists.
Third-order effects
- If the rumored deal lands, it would end the era of single-carrier exclusivity for marquee smartphones, pushing Apple toward multi-carrier distribution and forcing carriers to compete on network quality rather than device lockups — a structural shift in how US carriers differentiate.
- The longer pattern points to device makers gaining leverage over carriers: when one handset generates enough demand to dominate a rival carrier's growth, exclusivity stops being protection and starts being a hostage situation.
The trend: US smartphone distribution is moving away from single-carrier exclusivity as device demand grows large enough that carriers can no longer lock up marquee hardware.