A Verizon/Apple Phone: More likely, if not soon

Speculation of a Verizon/Apple deal for a phone spiked again this week, with some new information emerging via a host of reports. The upshot: Such a deal is more alluring than ever to consumers, and may happen sooner than was once thought—though no sooner than next year, at the earliest.

Here's a roundup of what's creating buzz and a growing sense of tangibility about a Verizon/Apple cell phone:

• Consumers like Verizon. The proof is not just the company's perennial high standings in our Ratings of cellphone service (available to subscribers). In spite of a recession, the company this week announced it had snagged 1.3 million new customers in the first quarter of the year. That's more than AT&T, a middling performer in our Ratings, who said they added 1.2 million customers, most of whom got iPhones (AT&T having exclusivity over the Apple smart phone).

• AT&T's deal reportedly expires in 2010. The iPhone launched in late 2006, with a supposed five-year exclusivity for AT&T—a factor raised in a number of comments to our blog of a few months ago on an Verizon/Apple phone. But several sources, including the New York Times, this week reported that the deal actually appears to expires in 2010, and that AT&T is now negotiating with Apple for a one-year extension of the deal into 2011.


• Any deal will likely wait for new, faster LTE networks. It might appear that Apple, which rarely comments in advance on possible new products, seemed to squelch the idea of a Verizon-Apple phone last week, when a spokesman said it was unlikely Apple would build a phone that works on a CDMA network, like that used by Verizon (AT&T's network uses a competing technology, GSM). But Verizon and other carriers, including AT&T, plan to replace so-called third-generation (or 3G) networks with faster so-called Long Term Evolution, or LTE, networks. And Verizon's president and CEO, Denny Strigl, this week told the Wall Street Journal that Apple "should consider an LTE arrangement, and my guess is they would."

In February, Verizon announced it planned to become the first wireless carrier to offer LTE service, starting in 2010. But many analysts we've talked to think that's an optimistic date for the first LTE networks. They say launches in 2012 or later are more likely, with limited coverage, and that CDMA networks will likely remain in place alongside LTE ones for years to come.

The best guess? For at least the next year-and-a-half or so, any Apple phone is overwhelmingly likely to remain an iPhone, and from AT&T. That exclusivity might even continue over to 2011, if Apple extends the iPhone's exclusivity to AT&T through that year—and if Verizon has not yet built out its LTE network sufficiently to support a splashy new product launch like an Apple phone. And when that launch does come, it may not be a shift of the iPhone across the street to Verizon but a distinct and different product, with both Verizon and AT&T selling Apple phones.

What do you think? Are you eager to see a Verizon/Apple phone? Bummed if AT&T retains its exclusivity into 2011? —Paul Reynolds