What's the Future for Verizon's IPhone? It's All Over the Map

Ad Age Handicaps Winners and Losers -- and the Results Might Come as a Surprise

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NEW YORK (AdAge.com) -- Apple is set to drop AT&T as the exclusive carrier of its high-selling iPhone and introduce a new version of the handset for Verizon, which would ship next fall, according to the Wall Street Journal, ending the three-year lock AT&T has had on the iPhone in the U.S. (abroad, the iPhone is usually available on multiple carriers). So what will it mean if the iPhone is added to the nation's largest mobile network -- and one of its biggest advertisers? Expect a ripple effect for other handset makers, the app economy and mobile advertising that plays out something like this:


Apple adds 90 million potential Verizon subscribers, doubling the market for its phone. Apple gets a shot at Verizon loyalists, as well as those who wanted an iPhone but not AT&T's spotty network performance.

Both paid and ad-supported iPhone apps are about to get a lot more scale, which means a bigger addressable market and more revenue. With 140,000 apps in the store, and more coming for the iPad, it's a market Apple will dominate for awhile.

The iPhone is the most attractive platform for advertisers; the only strike against it? It's limited to a single carrier's subscribers. Scratch that and watch for more creative for Apple's so-called iAd platform.


But it won't be as bad as you might think. First, AT&T retains a key competitive advantage: its network supports simultaneous voice and data use, a key iPhone feature, and Verizon's doesn't. Sure, some iPhone users will defect, but iPhone complainers will have a whole new network to hate.

After a poor start last summer, the Palm Pre has failed to catch on, despite a host of features that make it a decent iPhone competitor and a BlackBerry-like keyboard. More iPhones on more networks won't help.


Verizon has spent the past year and $100 million tearing down iPhone with its Droid ads; now it has to do an about-face. Verizon will be only slightly better-prepared for the onslaught of data demand. How long before #VerizonFail starts trending on Twitter?

With an expanding list of carriers and handset-makers, Android is going to grow fast in 2010. But now, users that opted for the Android flagship Droid on Verizon have another option. With more handsets on more carriers, iPhone may slow Android down, but won't stop it.

Oddly, the iPhone hasn't hurt BlackBerry, which still has 42% of the smartphone market and what it had back in 2007 -- a loyal, corporate user base not looking to switch.

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