Verizon iPhone: What We Know

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Will Verizon ever get the iPhone? There may be some light at the end of the tunnel for iPhone fans who are frustrated with AT&T, or Verizon customers who would prefer the Apple handset over the Android competitors. Most recently, a report by Bloomberg News Service indicated that Apple may start offering the iPhone to Verizon starting in January of 2011.

There have been many rumors from a variety of sources on this topic, and Bloomberg is citing two unnamed sources for its information, so this is still no guarantee of a move to Verizon. The momentum does seem to be building behind the notion though, and where there’s smoke there’s usually fire.

Here’s what we know, at this point, about the possibility of a Verizon iPhone:

The details of AT&T’s exclusive contract with Apple are unknown. The duration of the contract and the details about whether Apple can bring in other carriers have not been made public, although USA Today reported in 2007 that Apple and AT&T had a five-year contract that would carry into 2012.

AT&T allegedly pays Apple $432 in kickbacks for every iPhone it sells over the course of two years, in exchange for exclusivity. Piper Jaffray analyst Gene Munster calculated that figure back when the original iPhone launched based on financial figures Apple was forced to share with investors, but it’s not clear whether rights to the phone still carry the same price three years later. In either case, any network hoping to lure Apple away from AT&T would need to come to the bargaining table with some major coin.

Apple would have to design an iPhone that works with Verizon’s network, which currently uses CDMA technology, rather than the GSM technology used by AT&T. Another strong possibility: Verizon’s iPhone could be designed to work on Verizon’s upcoming 4G LTE network, which will be launching in up to 25 markets by November.

The Wall Street Journal reported back in March that work was underway on a CDMA iPhone that would begin production in September. That manufacturing timeline would seem to line up well with the January 2011 launch date mentioned in the latest rumor. However, a CDMA iPhone doesn’t necessarily have to be destined for Verizon. It could also potentially end up on Sprint, as well as international carriers like China Telecom or Japan’s KDDI.

Northeast Securities analyst Ashok Kumar claimed back in January that Qualcomm would be responsible for developing the chip for a Verizon-bound iPhone, a claim echoed by another analyst in March. However, Kumar also claimed the phone would come out this summer – contradicting most other accounts, and so far looking unlikely.

Steve Jobs has been vague when asked about releasing the iPhone to other carriers, but has never denied the possibly.

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