iPhone on Verizon - hope lives

[redman042]

News on Engadget today:

Verizon rolling out visual voicemail in coming months

by Chris Ziegler, posted Jun 17th 2008 at 1:29PM
Jump on the bandwagon much, Verizon? We're just bustin' your chops, guys -- we know it's hard to avoid jumping on the bandwagon when Sprint and AT&T (by way of Apple, of course) are starting to hustle hard with the visual voicemail trend. We've caught wind that VVM is actually shockingly close to launching on a handful of Verizon devices; the current target is late July to early August. That's the good news. The bad news, though, is that it'll run $1.99 on top of your regular plan pricing, which feels like a bit of a rip when the crosstown competitors are doing it at no additional charge. The feature will take the form of a BREW download that can be snagged and provisioned by the customer in the field without any customer service intervention, and will launch on specific devices.

The first four to get hooked up will be the LG Chocolate 3, the "Voyager Refresh" (it's unclear whether this is a hardware or firmware update to the present-day Voyager), and from Motorola, the "Blaze" and "Utopia." We're not sure what those two are, either, but the rugged V750 may be the Utopia, and deductive reasoning suggests that the VU30 could be the Blaze.​

Care to debate whether this means anything beyond what is contained in this announcement?

 

[question fear]

Fair enough.

I'm not sure what the disclosure laws truly require. It makes sense to me that if they told their shareholders 5 years, then they'd have to tell their shareholders if that changed. But they didn't do either. They claimed the info was confidential for competitive reasons. I suppose Sarbanes-Oxley allows something for that, similar to how a company can ask the FCC to keep certain documents confidential. But there are probably strict guidelines for how the confidentiality argument is used. If anyone here is an expert on public company disclosure laws, it would bring interesting perspective to this whole discussion.

I am far from an expert...all I know is what effect it has on disclosures for public companies. Hopefully a lawyer-type will wander through. However, regardless of how long the exclusivity is for, they'll have to report it once it ends. Also, since the whole idea of Sarbanes-Oxley is to put information on public companies out there so that no one can horde info or time it's release (think Enron, WorldCom, etc), so there's probably very little as far as confidentiality protection. Think of it this way: if it's important enough for a shareholder to know about it, they probably have to release it.

As far as the Verizon Visual Voicemail announcement, I wonder about it's timing on the heals of Apple striking a deal with the company that owns the patents. I wonder if they've struck deals with all the major carriers now.

 

[zap2]

T-mobile uses unusual frequencies for their GSM, and I don't believe the new iPhone cell radio utilizes those frequencies.

For 3G yes, but for other GSM stuff its works fines (with both the old and new iPhone)

Also putting in a different radio is very do able, clearly Apple did that when they had a CMDA model ready for Verizon.

 

[yadmonkey]

Agreed... there has to be more to this contract with AT&T than just a simple exclusivity duration. I've never seen a contract that simple. There are always conditions, clauses, and outs.

What if the exit clause is the opposite of what you suggest? Instead of Apple saying they need an out if enough handsets are not sold by a certain date, they did it the opposite way. They said to AT&T: after you gain a certain number of new subscribers through iPhone sales, then we get to peddle to other carriers. After all, Apple is really the hype builder for this particular handset, which is totally opposite from normal handset deals. So if not enough were sold, it would be Apple's fault, not AT&Ts.

That's an interesting perspective and it would help explain the nebulous nature of this deal. Maybe it was something like "x number of subscribers up to five years".

The visual voicemail deal is really tasty. Forgetting the contract with AT&T, there were things holding back the iPhone from going to Verizon and it seems those things are disappearing... Verizon opening their network ("any app, any device") makes room for the iPhone without Verizon branding and allows Apple to compete with Verizon's crappy music stores. Now with visual voicemail around the corner, it does seem like they're setting the stage.

 

[redman042]

Maybe it was something like "x number of subscribers up to five years".

Yes, and the beauty of it being that AT&T gets to leak to the public that it's a 5 year deal, and they wouldn't be lying, just leaving out a few details, plus since it's a leak, they aren't bound to anything anyway. The "multi-year" statement that they've made before would also be true under this scenario. In actuality it's a "mult-year agreement with an exit clause", but let's not split hairs, eh?

It does seem like they're setting the stage.

The sudden change in AT&T's agreement with Apple also could be setting the stage.

 

[Cleverboy]

Apple agreed to be exclusive with AT&T for at least 3 years. They also agreed to NOT produce any CDMA compatible phones for 5 years. So the story went, anyways (look it up).

Apple iPhone on AT&T for five years?
http://www.engadgetmobile.com/2007/05/22/apple-iphone-on-atandt-for-five-years/
http://www.usatoday.com/tech/wireless/2007-05-21-at&t-iphone_N.htm

AT&T has exclusive U.S. distribution rights for five years — an eternity in the go-go cellphone world. And Apple is barred for that time from developing a version of the iPhone for CDMA wireless networks.

That ban is no small thing. AT&T rivals Verizon Wireless and Sprint are both CDMA shops. AT&T uses GSM, a global standard incompatible with CDMA.

Bottom line: If you want an iPhone anytime soon, you'll have to take your business to AT&T.

By the end of 5 years, both AT&T ad Verizon will be headed toward 4G... at which point... Gasp...

Verizon, AT&T To Share 4G Network Technology
http://gizmodo.com/gadgets/cellphones/verizon-att-to-share-4g-network-technology-302460.php

So, any thought that Apple will be in any way interested to move to Verizon is wishful thinking at best. Apple chooses a chipset and rolls with it. Consumers can choose which network they want to be on. Verizon missed its window. Apple has moved on.

~ CB

 

[redman042]

Apple agreed to be exclusive with AT&T for at least 3 years.

Ok, I'm thoroughly confused now. Where the heck did 3 years come from??? I don't see that in the article at all, only 5, and I've never heard anyone say 3 before. And another poster a few years back said 6. Which is it, anyway?

http://www.usatoday.com/tech/wireless/2007-05-21-at&t-iphone_N.htm

I've just reread the article. First, remember this is the ONLY known place in writing where this 5 year term was spelled out. Every other source out there (Engadget included) that has mentioned the term is quoting this USA today article. Talk about chain mail.

Now, does anyone have any idea where Leslie Cauley got the 5 year number?? Even his quote of CEO Stan Stigman doesn't actually say 5 year. It is, like everything else from AT&T, noticeably vague.

Look back a few posts at my theory of how the agreement is probably a 5 year agreement with a clear exit clause, and that part of the intent here was to let AT&T "leak" the 5 year part and grab customers for a year or two before Apple goes to other carriers. The USA Today article is exactly the kind of leak I would expect.

 

[skwoytek]

Now, does anyone have any idea where Leslie Cauley got the 5 year number?? Even his quote of CEO Stan Stigman doesn't actually say 5 year. It is, like everything else from AT&T, noticeably vague.

As far as I can tell Leslie Cauley took the information from Denny Strigl, Verizon's chief operating officer.

Strigl doesn't think the iPhone will be that hard to compete against. Why? Because, he says, for five long years it will be tied to AT&T's wireless network. His point: A phone is only as good as the network it runs on, and he thinks Verizon's is better.

More recently, The Wall Street Journal interviewed Ralph de la Vega, CEO of AT&T Mobility.

WSJ: Why is AT&T subsidizing the new iPhone and how will it impact AT&T's business?

Mr. de la Vega: It seems like $199 is the right kind of price point to get significant mass-market adoption. It's going to impact earnings in 2008 and 2009 in a negative way, but will turn very profitable in the long term.

If AT&T expects to lose money on subsidizing the iPhone through 2009 and finally turn a profit beginning in 2010, I'd guess that the exclusivity agreement run at least through 2010. It probably extends beyond 2010, otherwise there's little payoff for AT&T.

 

[Cleverboy]

redman, you might want to reread it again. Its pretty clear USA Today has its sources straight. Of the news outlets first allowed a review unit of the original iPhone, and a reputable news agency... they not in the business of lying. Also, pay close attention to the details. NO CDMA iPhone for 5 years. Period. At&t also has an exclusive 5 year U.S. distribution deal. You can pretend not to read it in black and white but the words still means the same thing. USAToday isn't a blog. Its a responsible news agency.

~ CB

 

[redman042]

If AT&T expects to lose money on subsidizing the iPhone through 2009 and finally turn a profit beginning in 2010, I'd guess that the exclusivity agreement run at least through 2010. It probably extends beyond 2010, otherwise there's little payoff for AT&T.

I've been trying to figure out whether these recent AT&T statements about expected losses and profitability imply anything about the duration of the exclusivity. I'm just not sure.

Even if they only retain exclusivity for another quarter, they would gain a lot of new customers in the initial rush, and those customers would be retained under 2 year agreements and would be consuming data services that whole time, ultimately offsetting the equipment subsidies.

The longer they retain exclusivity, the more new customers I'd expect them to add, and the higher the initial losses for them.

But I think, regardless of the duration of exclusivity, there's long-term payoff for each customer they add, since every customer must get a data plan.

 

[redman042]

redman, you might want to reread it again. Its pretty clear USA Today has its sources straight. Of the news outlets first allowed a review unit of the original iPhone, and a reputable news agency... they not in the business of lying. Also, pay close attention to the details. NO CDMA iPhone for 5 years. Period. At&t also has an exclusive 5 year U.S. distribution deal. You can pretend not to read it in black and white but the words still means the same thing. USAToday isn't a blog. Its a responsible news agency.
~ CB

Yeah, the media ALWAYS gets the story straight don't they? And they never leave anything important out, huh? I have seen many, many examples in my lifetime to the contrary.

Let me ask you this then. Why is it that AT&T won't tell us ANY specifics? They didn't in the first agreement, and they aren't now with this new agreement? Yet USA Today, in your mind, has completely confirmed information backing up their story? I think not.

My point is that while USA Today is not blatantly lying, they are reporting unconfirmed information from an "inside source", and whether or not they were given the whole story or just part of it is completely open to question. Since AT&T has never taken an official position on the contents of the agreement, other than some vague comments like "multi-year", this is the only conclusion we can come to.

I believe it is entirely possible that the agreement makes AT&T the exclusive carrier of the iPhone, and Apple is barred from producing a CDMA iPhone during that time, for a period of 5 years OR until AT&T gains a certain number of new customers from the deal, whichever comes first.

 

[skwoytek]

I've been trying to figure out whether these recent AT&T statements about expected losses and profitability imply anything about the duration of the exclusivity. I'm just not sure.

Even if they only retain exclusivity for another quarter, they would gain a lot of new customers in the initial rush, and those customers would be retained under 2 year agreements and would be consuming data services that whole time, ultimately offsetting the equipment subsidies.

The longer they retain exclusivity, the more new customers I'd expect them to add, and the higher the initial losses for them.

But I think, regardless of the duration of exclusivity, there's long-term payoff for each customer they add, since every customer must get a data plan.

I'm all for debating conspiracy theories, but when there's a legitimate newspaper, an internal CEO and a competitor's COO talking about five-year agreements, short-term loses and long-term profits; while the only people disagreeing with the 5-year agreement are the people who just don't want it to be true... well.

You're clearly looking for evidence that would allow you to stay with Verizon and have an iPhone - there just isn't any. The only thing left for me to say is, enjoy your thread.

 

[Cleverboy]

You're clearly looking for evidence that would allow you to stay with Verizon and a an iPhone - there just isn't any. The only thing left for me to say is, enjoy your thread.

Agreed. Sometimes tea leaves have absolutely nothing worthwhile to say.

~ CB

 

[yadmonkey]

You're clearly looking for evidence that would allow you to stay with Verizon and have an iPhone - there just isn't any. The only thing left for me to say is, enjoy your thread.

I really think you (and so many others) have taken the spirit of this thread all wrong. I'm not only looking for evidence to allow me to stay with Verizon - I think more scientifically than that. What I'm looking for is any evidence one way or another. A bunch of people chanting "5 years" isn't good enough for me. To blindly accept it without finding a source would be bovine. 6 out of 7 people polled right before we went into Iraq believed that Saddam Hussein was involved in 9/11. I guess I'm just a 1 in 7 kind of guy.

 

[jrbdmb]

I really think you (and so many others) have taken the spirit of this thread all wrong. I'm not only looking for evidence to allow me to stay with Verizon - I think more scientifically than that. What I'm looking for is any evidence one way or another. A bunch of people chanting "5 years" isn't good enough for me. To blindly accept it without finding a source would be bovine. 6 out of 7 people polled right before we went into Iraq believed that Saddam Hussein was involved in 9/11. I guess I'm just a 1 in 7 kind of guy.

Yet there are posters on this thread (I don't think you are included) who are *certain* that there will be a Verizon iPhone "in six months to a year." Claims like that also mandate some proof which has not yet been presented.

Being able to dispute the existence of a long term AT&T-exclusive contract does not prove that a CMDA iPhone is imminent. Too many people in this thread are making that leap.

 

[yadmonkey]

Yet there are posters on this thread (I don't think you are included) who are *certain* that there will be a Verizon iPhone "in six months to a year." Claims like that also mandate some proof which has not yet been presented.

Being able to dispute the existence of a long term AT&T-exclusive contract does not prove that a CMDA iPhone is imminent. Too many people in this thread are making that leap.

I can't argue with that. There seems to be a theme in this topic (not just this thread)... people will come in an espouse with absolute certainty that it will never happen, and leave without offering an explanation or even leave with a mean-spirited comment. This is probably pushing others off balance on the other side of the argument, causing them to react rather than discuss. It's really destructive to good debate, but it seems inevitable.

Regardless, I do feel like there's been some good discussion here and there within this thread and I've certainly learned some things about the industry through picking apart the arguments.

 

[ClassicMac247]

If verizon doesnt hop on the whole iPhone thing, they will be crushed, I'm a verizon customer and their phones absolutely suck, their plans suck and frankly I will never be their customer again if they don't support the iphone.

 

[question fear]

I've been trying to figure out whether these recent AT&T statements about expected losses and profitability imply anything about the duration of the exclusivity. I'm just not sure.

Even if they only retain exclusivity for another quarter, they would gain a lot of new customers in the initial rush, and those customers would be retained under 2 year agreements and would be consuming data services that whole time, ultimately offsetting the equipment subsidies.

The longer they retain exclusivity, the more new customers I'd expect them to add, and the higher the initial losses for them.

But I think, regardless of the duration of exclusivity, there's long-term payoff for each customer they add, since every customer must get a data plan.

Absolutely there's a long-term payoff for them no matter what.

One thing I was thinking is that if AT&T subsidizes iPhones, and then Verizon starts to carry and subsidize iPhones, it won't impact AT&T's potential losses stemming from the subsidy. It doesn't matter if AT&T sells 10 iPhones at 199, and loses 300 up front from each iPhone, or if they sell 10,000. Any iPhones not sold aren't a loss yet. It's when the money changes hands at that value that AT&T takes the hit. Does that make sense?

Finally, here's the wikipedia article on Sarbanes-Oxley, for anyone interested: Sarbanes-Oxley

 

[yadmonkey]

If verizon doesnt hop on the whole iPhone thing, they will be crushed, I'm a verizon customer and their phones absolutely suck, their plans suck and frankly I will never be their customer again if they don't support the iphone.

I feel the same, which to me really speaks for their network. All that other stuff is so bad, but the single most important factor has been the reliability of the Verizon network, something I didn't experience with AT&T.

It's a painful concession one way or the other. In my case, it's the really amazing phone or the really solid network, but not both. If I still lived in NYC or another place where AT&T has better coverage, it'd be a non-issue.

 

[skwoytek]

I'm not only looking for evidence to allow me to stay with Verizon - I think more scientifically than that. What I'm looking for is any evidence one way or another.

We've heard 5-years from a national newspaper (USA Today).
We've heard 5-years from an industry insider (Verizon COO, Denny Strigl.)
We've heard about subsidy losses through 2009* from AT&T. (AT&T Mobility CEO, Ralph de la Vega)
We've heard multi-year from Apple (Steve Jobs)
We've heard multi-year from AT&T.

Still, none of this proves a 5-year agreement without a doubt. On the other hand, I can't find a single piece of evidence which suggests any shorter agreement length - wishful bloggers don't count.

Based on the information above and the current iPhone development cycle, I don't see a Verizon iPhone until 2010. Additionally, I don't see Apple ever building a CDMA iPhone when 4G LTE using W-CDMA (not compatible with CDMA) is the common direction for most major carriers.

That said, as an Apple shareholder, the sooner the iPhone is available on more networks to more subscribers, the better.




*That doesn't mean subsidies or the agreement ends in 2009; it just means that is when AT&T expects the iPhone to start adding to the share value.

 

[grndslm]

Thank you, Mr. Logic.

Now, for those of you continuing to disbelieve Mr. Logic's assertions... look toward someone with that "real evidence" that would actually be able to convince you otherwise (think USA Today, ATT, Verizon, Apple execs), because MacRumors users know just as much as you do and aren't convincing you of jack. So arguing amongst ourselves over the internet is, like I said earlier, retarded.

Wait and see what really happens. If you must have an iPhone & don't like Verizon, their phones/plans/service.... then switch to ATT. If you don't care about iPhone... switch to Sprint. Verizon's service can't be that bad tho, since they and Sprint share the same voice network. Either one of them should have better service than ATT almost everywhere, voice & data.

But if you MUST have an iPhone... buy it next month when it's for sale. If you expect it to be available for another US carrier before 2010, you WILL be disappointed.

I will be sticking with my Treo 755p on Sprint because I haven't had a dropped call in more than a year. I get data access in the boonies, and there's absolutely nothing to complain about. Sometimes their customer service plays dumb by reading thru scripts, but it's not often I actually have to talk to them. The joy about their newer technologies is that I don't even have to talk to reps on the phone anymore to do most anything. Supposedly, I can swap out ESN numbers on my plan over the internet... so, it's virtually the same as swapping SIMs with GSM phones. All I'm saying is that my allegiance is to Sprint. When Sprint gets the iPhone (in 2012), I'll prolly buy it. By sticking with Sprint (if they're still around in 2012), I will have saved $2500 on just one line alone. If I switched both phones on my plan to iPhones on ATT's plan... I would have lost $5000, and that still doesn't include the cost of the iPhones.

I will wait in silence from here on out. I wish the Verizon users would do the same if they like their plans/service, because that's the only way that the "multi-year agreement" will come to an end and CDMA users can get the Jesus phone. When consumers stand their ground with their service providers, either Apple or ATT will throw in the towel and everybody wins.

 

[yadmonkey]

Now, for those of you continuing to disbelieve Mr. Logic's assertions... look toward someone with that "real evidence" that would actually be able to convince you otherwise (think USA Today, ATT, Verizon, Apple execs), because MacRumors users know just as much as you do and aren't convincing you of jack. So arguing amongst ourselves over the internet is, like I said earlier, retarded.

Here's where I disagree. I'm not here for answers because clearly none of us are industry insiders. I'm here for insight and that's something I've gained from people on both sides of this argument.

I wrote the original post in order to put some ideas to the test. Some of them have been laid to rest, as far as I'm concerned, and others still pose interesting questions. I just wish more people took it with the suggested grain of salt instead of being argumentative. Meanwhile, I've learned a thing or two, despite not having the answers. That's not so retarded.

 

[skwoytek]

Verizon's service can't be that bad tho, since they and Sprint share the same voice network.

Not true. Verizon and Sprint use the same technology, cdmaOne. They each have different cell towers, at different locations, uniquely tuned by their respective field techs. If they shared the same network they'd both be adopting WiMax or LTE, not going in their own directions.

Either one of them should have better service than ATT almost everywhere, voice & data.

Again, not true. It all depends on where the cell towers are placed. I have a Sprint phone for business and an iPhone for personal use. I often have to use my personal phone to make many business calls due to the difference in coverage. More toward your first claim, the same wasn't true when I had Verizon for my business carrier - but they're a competitor so we switched to Sprint.

Viewing the coverage maps would show that Verizon and Sprint have different coverage areas. Additionally, an independent testing group will show that call quality is different for different carriers, including between Sprint and Verizon.

If the situation were as you suggest Verizon and Sprint would have equal ratings for call quality - they do not. And Sprint would beat AT&T in call quality in every region, they do not.

I will wait in silence from here on out.

Does that apply to the entire forum?

 

[grndslm]

Not true. Verizon and Sprint use the same technology, cdmaOne. They each have different cell towers, at different locations, uniquely tuned by their respective field techs. If they shared the same network they'd both be adopting WiMax or LTE, not going in their own directions.

They DO share voice and data on cdmaOne. Sprint & Alltel also share EV-DO, but I'm fairly certain Sprint & Verizon do not take their relationship this far. Since Verizon is acquiring Alltel, the Sprint EV-DO agreement with Alltel will prolly only be carried over for so long.

If you have evidence that Sprint & Verizon do not share cdmaOne now, I'd be more than willing to glance at it.

Again, not true. It all depends on where the cell towers are placed. I have a Sprint phone for business and an iPhone for personal use. I often have to use my personal phone to make many business calls due to the difference in coverage. More toward your first claim, the same wasn't true when I had Verizon for my business carrier - but they're a competitor so we switched to Sprint.

If the situation were as you suggest Verizon and Sprint would have equal ratings for call quality - they do not. And Sprint would beat AT&T in call quality in every region, they do not.

I said it a good bit earlier in this thread (I think), that your call quality is more dependent on the radio in your phone than anything else. With my Treo 755p, I had ONE dropped call out in the middle of Oklahoma. I could still receive data at my grandfather's farm, where I couldn't get data at all a few months earlier with my Treo 650. I've been all over, hoping to get another dropped call... so that I can say it's not all in the phone. But it is.

I bet you money that if you upgraded your business phone to a 755p, you'd never need to use your iPhone for business calls.

 

[grndslm]

Here's one example explaining how good the quality of reception is on the 755p: http://www.phonescoop.com/articles/review_treo_755p/index.php?p=a3

Just like all radios receive the same frequencies, some pick up the signal better than others that need a coat hanger sticking out. And the reviewers that you're mentioning comparing networks had crappy phones from years past.