iPhone for Verizon Wireless and the Market Impact

Apple’s announcement that they will release a version of the iPhone that supports CDMA (and therefore run on Verizon Wireless’ network) later this year will have immediate impacts on the wireless marketplace.

It will obviously help Apple to expand its market share in the Smartphone market, especially at the expense of Research in Motion. It will fill in a product gap in the Verizon Wireless handset line and allow them to expand their subscriber gap with ATT. It is possible that percentage Verizon customers with Blackberries might switch to iPhones.

For ATT, there is not much good news in this announcement. Now that the iPhone will be sold by their competition, expect to see churn from iPhone customers leaving ATT because of service quality issues. In fact, the Wall Street Journal article on 3/31 reveals that ATT is in the midst of a 100 day plan to improve service quality. (JD Power & associates ranks ATT call quality poorly to Verizon Wireless’ rankings).

It is not clear sailing for Verizon Wireless either. As ATT learned, the customer demographics changes with the iPhone and they had troubles forecasting iPhone network traffic. Verizon Wireless could easily have the same problems. However, Verizon Wireless will benefit ATT’s training of Apple programmers on wireless networking and load balancing . I expect things to go smoother for Verizon.

Note:

Mark Csernica is a wireless data expert with over fifteen years of wireless data experience. Mark has authored a number of papers on wireless communications for Mind Commerce, including one that delves more into the issues raised above. For more details refer to “Touch screen Smartphone comparison with Market Predictions and Business Opportunities”.

i Sheth, Niraj, “ATT Prepares Network for Battle”. Wall Street Journal March 31, 2010, pg B1

ii Ibid.

For more information about Mind Commerce research and opinions, see: www.MindCommerce.com

About Mind Commerce

Analysis of telecom and ICT infrastructure, technologies, and applications.
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