November 27th, 2007
When Apple launched the iPhone exclusively on AT&T’s crumby edge network — and I refused to buy one for that reason — I predicted that Apple’s real endgame was to break the wireless carriers’ stranglehold on handsets, so that Apple could sell iPhones on any network. Sure enough, Verizon just announced that next year it would allow any phone — and any application on any phone — to be used on its network.
I held my ground with Verizon, but many people eagerly switched over to AT&T to get an iPhone — many of those probably abandoned their Verizon accounts and gladly paid the termination fee. You can be sure Verizon was keeping count. And you can be sure this is what Apple told Verizon would happen when Apple refused to accept Verizon’s terms for the iPhone launch. AT&T was just a pawn.
This also puts into perspective Apple’s cracking down on open iPhones — it’s not that Apple doesn’t want iPhones used on every cell network — it’s just that they needed to break the back of the industry first, using consumer demand as a blunt instrument.
Steve Jobs always has a plan.
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At Silicon Alley Insider, Dan Frommer observed:
But if you’re a Verizon subscriber drooling for one of Apple’s iPhones, don’t get your hopes up: the iPhone — and its exclusive U.S. carrier, AT&T (T) — use a different kind of cellphone network, called “GSM.” Apple (AAPL) would have to design a new phone to work on Verizon’s (VZ, VOD) “CDMA” network.
What makes you think they aren’t already working on one?
Of course Verizon’s move isn’t just about the iPhone — Om details the other factors (and is rightly skeptical — there’s probably a lot more drama to unfold). But this unprecedented move by Verizon a mere five months after the launch of the iPhone is unlikely to be a coincidence.
To quote Om once more, open carrier networks means “Bye-bye subsidies” for handsets — you can see Steve Jobs smiling.