Apple Ready to Rock on Verizon This Summer?

Is Apple ready to branch out from its exclusive relationship with carrier AT&T in the U.S. and offer the iPhone on Verizon's network? Such a move has been rumored for at least a year, but is now heating up.

A Wall Street Journal article Tuesday said Apple (NASDAQ: AAPL) is working on a new iPhone that will work on the CDMA wireless network used by Verizon Wireless. CDMA (define) is also used by Sprint and a handful of carriers outside the U.S., notably in Japan and South Korea. The iPhone uses the GSM (define) network favored by AT&T and most carriers worldwide.

Apple is widely expected to bring out a new iPhone model later this summer as it has the past three years. The Journal, citing sources it said have been briefed on the matter, said one of the new iPhone models will be made for Verizon.

"We're not commenting on rumors and speculation," Apple spokesperson Natalie Kerris told InternetNews.com. Apple has had an exclusive contract with AT&T (NYSE: T) since the iPhone debuted in 2007. It's not clear how long the contract runs or how long any exclusivity provisions are for.

"We have a great relationship with AT&T," Kerris added.

The Reuters news service also fed fuel to the Verizon rumor fire Tuesday when it reported that a subsidiary of Taiwan netbook maker Asustek, called Pegatron, has won orders to manufacture an iPhone that will run on the CDMA standard. However, the report, quoting a source "close to Pegatron" said the company won't be shipping the phones until next year and could not confirm if the phones are being built for Verizon's network.

Analyst Roger Kay said Apple could want to cement a relationship with the No. 1 U.S. carrier now, even if it's using CDMA, if it has an eye toward transitioning to Verizon's faster 4G LTE network when it becomes available.

"Apple could retread the iPhone as the new 4G technology becomes available," said Kay, president of < a href="http://www.NDPTA.com">Endpoint Technology Associates. "I do think Apple is going to do some kind of deal with Verizon and the details will probably leak out soon. Apple's become too big a colossus and there are too many players in the supply chain for it to keep its plans as much under wraps as it would like."

Raven Zachary, who runs iPhone and iPad developer conferences, said that while he doesn't have any inside knowledge of whether Apple will go with Verizon, anything that expands the number of iPhone users is great news for developers.

"I fully expect Apple to introduce a new iPhone this summer because that's been their pattern," Zachary told InternetNews.com. "They could also add T-Mobile with a lot less complexity than Verizon, and Apple already has a partnership with T-Mobile in Europe. I'm a fan of whatever it takes Apple to put the iPhone in as many hands as possible.

"Developers have a population to market to that's north of 75 million users of the iPhone OS, and with < a href="http://www.enterprisemobiletoday.com/features/otherapps/article.php/3873556/iPad-Mobile-Apps-Store-Big-Launch-Big-Prices.htm">the iPad coming, I see that number passing 100 million in the not too distant future. The more devices that support the iPhone OS increases the opportunity for developers."

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.


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