July 19th, 2009
Could Apple really dictate iPhone terms to Verizon Wireless?
The bricks just keep being thrown through AT&T’s reputation window.
This time, TechCrunch’s MG Siegler has an entertaining rant on how Apple needs to dump AT&T and put the iPhone on Verizon Wireless. As noted before, the iPhone may be the worst thing that has ever happened to AT&T’s reputation over the long run.
But Siegler reckons that Apple can dictate terms to Verizon Wireless and simply appear. Siegler writes:
Apple no longer needs AT&T. Thanks to its huge success, it can dictate its own terms to other carriers now, and ensure it controls the iPhone ecosystem — its top priority. Verizon, as the nation’s largest carrier, is likely to give it the most resistance. But that resistance is futile. The iPhone will eventually be on Verizon, on Apple’s terms. It’s just a question of when.
The first part of that riff is true. Apple doesn’t need AT&T. The second part of that—Apple dictating terms to anyone—may not apply.
Why? Beyond AT&T Apple doesn’t have that many options. What’s Apple gonna do? Go to T-Mobile? Good luck with that one. Sprint? Possibly, but its network and customer service—both improving by the way—have been lambasted over the years. That leaves Verizon Wireless. Here’s why Verizon Wireless may not be so enamored with Apple:
- Verizon Wireless hasn’t been crippled even though it would happily take the iPhone. The iPhone only has meant that AT&T can sorta, kinda almost tie Verizon. AT&T ended the first quarter with 78.2 million subscribers. Verizon Wireless had 86.6 million, inflated by 13.2 million from the Alltel purchase. AT&T’s retail churn rate has improved to 1.2 percent, still behind Verizon’s 1.14 percent. The mass exodus from Verizon to AT&T just isn’t happening.
- The Apple-AT&T partnership is great marketing—for Verizon. Verizon is smiling every time one of these AT&T sucks tales emerges. Verizon Wireless can mock AT&T as long as the iPhone fans jeer.
- Verizon Wireless already has a bevy of devices that seem to be working. Granted, these devices aren’t the iPhone, but a look at the financials and churn rate indicate that Verizon Wireless can do fine without Apple.
- Perhaps the iPhone is just a network killer. RIM’s co-CEO Jim Balsillie revealed the company’s secret sauce a few quarters back: BlackBerries are easier on wireless networks. Is Verizon Wireless really in a rush to see if the iPhone will kill its network too? Probably not when you can just mock AT&T all day.
Does Verizon Wireless really need Apple? The case isn’t that clear. If Apple really wants great carrier terms it may want to try Sprint.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
For daily updates, follow Larry on Twitter.
Subscribe to Between the Lines via Email alerts or RSS.
