Verizon to Sell Apple IPad That Connects Directly to Its Network
Jan. 11 (Bloomberg) — Verizon Wireless will sell a version of Apple Inc.'s iPad tablet computer that can connect directly to its network, posing another challenge to AT&T Inc. as the carrier's exclusive hold on the iPhone draws to a close.
Context & Ripple Effects
The move closes a loop that has been running for over a year: sources reported back in January 2010 that Apple's tablet would run on Verizon's 3G network, TechCrunch argued in October that the Verizon iPad was a leading indicator for a Verizon iPhone, and Business Week documented Verizon's year-long iPhone preparation. With the confirmed iPhone 4 deal announced alongside this, the iPad is arriving first.
Why it matters: AT&T's exclusive grip on Apple devices in the U.S. is ending device by device. Verizon has spent recent months building the case for itself — switching on 4G in 38 cities, claiming its upgraded network can absorb iPhone-scale traffic loads, and planning a Motorola 4G smartphone under COO John Stratton — while drawing criticism over Samsung Galaxy Tab pricing along the way.
First-order effects
- Apple's iPad gains a second U.S. carrier distribution channel immediately, giving buyers a choice between AT&T and Verizon connectivity for the first time since launch.
- Verizon gets an Apple flagship device on shelves just as its confirmed iPhone 4 deal breaks AT&T's exclusivity, letting it market both devices against AT&T in the same quarter.
Second-order effects
- AT&T now faces Verizon selling both the iPad and the iPhone, forcing it to defend on pricing and network capacity rather than relying on exclusivity to hold subscribers.
- Verizon will push the iPad into its new data-plan bundles and its freshly launched 4G network story, pressuring rivals' tablet offers — where its own Galaxy Tab pricing has already drawn public criticism.
Third-order effects
- If Apple keeps widening device availability across carriers, U.S. wireless competition shifts from who locks up exclusive handsets to whose network carries the traffic — favoring carriers that invested early in capacity upgrades like Verizon's 38-city 4G rollout.
- Carrier-exclusive distribution economics weaken structurally: once marquee devices are multi-carrier, subscriber churn decisions hinge on network quality and plan design rather than device access.
The trend: U.S. carrier exclusivity over marquee smartphones and tablets is eroding, pushing competition from device lockups onto network capacity and pricing.