Verizon Launching IPhone Next month; RCA Urges Access
Verizon Wireless confirmed long-time rumors that the iPhone 4 will be available for use on its network in early February. The device will be priced similarly to AT&T’s at $199 for a 16 GB phone and $299.99 for 32 GB with a two-year contract. The Rural Cellular Association praised the non-exclusive agreement, urging Verizon’s support in making popular devices like iPhone available to all RCA members within six months of their release.
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The Verizon iPhone includes a five-megapixel camera with LED flash, HD video recording, Apple’s A4 chip, and a 3-axis gyro. IPhone 4 also comes with the iOS 4 mobile operating system, which includes multitasking, folders, Game Center, AirPlay and AirPrint wireless printing. The device also includes new Personal Hotspot capabilities allowing customers to use it to connect up to five Wi-Fi enabled devices. The device will be available for preorder Feb. 3 for existing Verizon customers and for others beginning Feb. 10. No data pricing plans were announced.
"I am pleased to see that Verizon has broken the exclusive arrangement between AT&T and Apple, and I am delighted that other carriers will have access to the CDMA iPhone, and it will not be an exclusive Verizon offer,” said RCA President Steve Berry. RCA hopes Verizon will reaffirm its previous commitment to allow smaller and regional carriers to obtain access to popular smartphone and other next generation devices six months after their launch, he said. RCA is seeking Verizon’s support in encouraging Apple to make the iPhone and iPad available to all RCA members within six months of their release, he said.
Analysts were divided on the effect of iPhone on Verizon and its competitors. John Hodulik at UBS expects that 77 percent of his estimate of 13 million Verizon iPhones this year will go to current Verizon subscribers, rather than new customers. That would be a concern as Verizon would have to subsidize the cost of each iPhone, he said. As a result, even with the iPhone’s revenue boost, subsidies would reduce Verizon earnings this year by about $425 million, he forecast. AT&T might actually benefit in the short term from paying fewer subsidies, saving about $590 million this year, he said.
Other analysts varied widely in their estimates of how many AT&T iPhone users would jump ship. Barclay’s James Ratcliffe said some one million would go to Verizon over two years, while Hudson Square’s Todd Rethemeier expects AT&T to lose 3.5 million contract subscribers this year. But AT&T’s early termination fees might prevent some customers from fleeing, some analysts said.