Why Apple Should Start Wooing Verizon Like Google

Google’s (GOOG) Android phone technology is going where no iPhone has gone before–to the Verizon (VZ) network.

The two companies have announced a strategic partnership that will see more Android phones coming to market–some within the next few weeks.

Integral to this agreement is a commitment by the companies to devote substantial resources to accelerate delivery of leading-edge innovation that will put unique applications in the hands of consumers quickly…Verizon Wireless and Google plan to co-develop several Android-based devices that will be pre-loaded with innovative applications from both parties as well as third-party developers.

This is a big win for Google. While the iPhone has seen impressive market gains, there’s no doubt that it won’t realize its full potential until it can break free from its current AT&T (T) bonds. While consumers are left waiting for the iPhone to become available on Verizon’s arguably better 3G network, Google gets to sweep in and try to make as many of them as possible convert to Android.

I’ve spoken to many Verizon Wireless customers that feel left out of the smart phone race because their desire for a reliable network outweighs their desire for an iPhone. If Apple (AAPL) doesn’t cozy up to Verizon soon, it could find it misses the boat. All of the hundreds of thousands of patiently waiting Verizon customers might decide the Android is good enough–locking them in for another two years and locking out Apple in the process.

Comments

[Uncle Miltie:]

The title of this article should read "Verizon needs to roll out LTE ASAP so it can get iPhone". Until the big V gets it done (like Bell did in Canada), no iPhone. It's as simple as that.

Oct 07 08:02 AM

[drbob:]

I think this marriage is a joke. Verizon is the most closed, controlling company in the world. Don't expect to see much here personally.

Oct 07 08:16 AM

[NW Tech:]

Verizon has the very worst customer service since Google.

Oct 07 08:23 AM

[buoy:]

Sounds like negotiations between AAPL and VZ are on the down.

Oct 07 09:23 AM

[modelportfo...:]

LTE not happening for V until 2011 so I would not expect to see any deal between Verizon and Apple until then. That is a long time for a Verizon user to wait for an iphone and I suppose that Android will be filling any void and then some in this two year waiting period. I believe V is serious about openness, esp with the FCC breathing down carriers necks about net neutrality rules being introduced this month. V and T are both being forced to accept this new world introduced by Google. Consumers will be the winners thanks to Google.

Oct 07 10:35 AM

[jack dee:]

There is a limit to customers willing to pay $70 a month for a phone.

The vast majority , simply have no interest in paying out big cash for small improvments.

99% of the value of a cell phone is gained in a cheap prepaid.

cheap prepaids now offer a slew of services once seen only on high end phones.

weather data, calls, texting, payments, money tranfers, its all there ,and being provided for less than10% of the cost of smart phones.

SO what am I saying?


Margins, on smart phones are going to erode like a methhead's teeth.

Oct 07 12:42 PM

[Wisdom vs. ...:]

VZ looked at the iphone and took a pass, smart now that T is getting all the bad pub from being too early; VZ's network is not arguably better than T's (yet), that is just silly; and, Euro and Japan carriers that have been too early have had the same problems. please, collect some actual facts before you write another article.

Oct 07 02:51 PM

[never going...:]

What prepaids allow you to do what I do on my iPhone?? I have seen every other phone up close on the market (US) and NOTHING comes close to the iPhone's interface/design/quality. I have no problem with T's service/coverage but do know there are issues out there (in big US metro areas for sure) Lets be honest here the iPhone user is a network hog and I really wish VZ would introduce it soon on their network. I also feel very strongly that the awesome VZ network would be taken down and out much like T's did once the iPhone spreads out and VZ users plug in!! Still AAPL needs to get iPhone on another carrier in the US big time for 2010-2011!!!

Oct 07 02:53 PM

[GSlusher:]

"While consumers are left waiting for the iPhone to become available on Verizon’s arguably better 3G network ..."

Better, in some ways, perhaps, but there is a reason that most of the rest of the world does NOT use the CDMA technology that Verizon and Sprint do but DOES use the GSM/HPDA technology that ATT does. Ask a Pre owner if, while she/he is engaged in a phone call, she/he can check the internet or receive or send email. The answer will probably be a wistful, "No." (The only Pre owner I know is considering ditching the Pre for this reason.) Their 3G networks cannot handle data and voice at the same time. As Uncle Miltie said, until Verizon does a major (read: $$billions) upgrade to its network, they won't get the iPhone.

Oct 07 03:33 PM

[jack dee:]

Already there are apps and services available on super low end phones, it is only a matter of before the average punter worldwide can buy a smartphone with great apps and great interface for peanuts and low per month costs.

THe question is how do companies expand market for high end phones while maintaining high margins?

Oct 07 05:57 PM

[User 131476:]

"The question is how do companies expand the market for high-end phones while maintaining margins?" was the question posed in the earlier post. The answer? Simply by doing exactly what Apple has done with the Mac and the iPod. Provide a really innovative product; great customer service; cool marketing. The Mac doesn't have the market share that Windows has, but Apple has NEVER competed on price. It competes on the "user experience" and the WOW factor - and there will always be a segment of the market willing to pay a premium price for a premium experience. Look at the customer satisfaction numbers on the iPhone - they are through the roof! The only limiting factor for the iPhone is AT&T, and eventually even that will pass. Ask Verizon, Sprint, TMobile and other carriers how many customers they have lost to iPhone - a bunch!

Apple is not and will never be a "me too" product company, and as long as customers enjoy the "Apple experience", Apple will continue to generate the margins. That's why the stock hit $190 this week in a down economy. Go to an Apple store and see for yourself. Apple is the #1 retailer for $$ per square foot in the country, and Apple stores have only been in business for a short while.

Oct 07 10:01 PM

[rich168:]

Apple choose GSM platform... because of worldwide market.
Think GLOBAL first... not just the USA market....
Vodafone which partly owns VZ also uses GSM.

Until VZ moves to LTE which is GSM.... I don't think apple will lift a finger...

Oct 08 02:19 AM

[jack dee:]

>>>Look at the customer satisfaction numbers on the iPhone - they are through the roof! <<<

in relation to what?

The new JD Powers stats put iphone rating at 81% and LG at 77% with all others listed coming in above 70%.

So with about 4% higher rating than the next best , what makes you think the ratings are "through the roof"

the diff in ratings is barely there ate all, the fact that JD uses charts designed for the dull minded is most likely the reason you think the ratings are so good....

www.jdpower.com/corpor...

Oct 09 03:03 PM