Analyst: Verizon, Apple May Not Come to Terms

On Thursday, at a Goldman Sachs conference, from Verizon Communications CEO Ivan Seidenberg made comments that implied the rumors of a soon-to-launch Verizon iPhone were vaporware. On Friday, a Wall Street analyst said the two companies may never come to terms.

Seidenberg said the following on Thursday, making those clamoring for a Verizon iPhone blanch, "We don't feel like we have an iPhone deficit. We would love to carry it when we get there, but we have to earn it. I think 4G will accelerate the process, and any other decisions Apple makes would be fine with us. Hopefully, at some point Apple will get with the program." That was hardly the sort of talk that makes one think a Verizon iPhone is coming in Q1.

On Friday, in a research note, Mike Abramsky with RBC Capital Markets said "Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network. And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone. This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."

 It's widely believed that Verizon was the first choice for Apple's iPhone, but the carrier turned down the arrangement as it could not come to terms with Apple. Since then, AT&T has taken advantage of its arrangement with Apple to close in on Verizon's subscriber numbers, while at the same time Android has become a hit based on its relationship with Verizon, as well as other carriers.

As far as reports of a possible 3 million CDMA iPhones to be manufactured in December, Abramsky believes they may be destined for other carriers, not Verizon. There are plenty of other CDMA carriers, including KDDI in Japan, China Telecom, Mexico's Telefonica, and Sprint and U.S. Cellular in the U.S. Still, when one thinks CDMA, at least in the U.S., one thinks Verizon.

Rumors of a Verizon iPhone in Q1 of 2011 continue to circulate. One clue that we noted was just how "generous" AT&T was in giving early upgrades to some customers, so they could get the iPhone 4, additionally locking them into AT&T for two more years. Abramsky believes that if a Verizon deal cannot be made, Apple may turn to Sprint and T-Mobile instead.
Tags:  Apple, iPhone, ATT, Verizon