Amazing how much stir was caused by the WSJ report that Apple (NASDAQ:AAPL) "may" launch a CDMA phone on Verizon. A few things to keep in mind about what a "CDMA" phone could mean:
- There are both Japanese and more importantly a Chinese version of CDMA that is not the same thing as the U.S. version of CDMA that works on Verizon (NYSE:VZ) and Sprint (NYSE:S). Totally different air interfaces and they don't work together.
- The Chinese version of the technology is inbred and proprietary to China. The Chinese have been lobbying Apple pretty hard to come out with a second version of the phone using this air interface. Most technology vendors don't really like making products for Chinese CDMA because it's crap. If they did, it wouldn't work in the United States. China could be trying to use Apple against Google (NASDAQ:GOOG), and Steve Jobs is probably a relatively willing partner.
- I saw rumors as much as two months ago that Apple may be getting a chip from QualComm (NASDAQ:QCOM) that would allow it to run both GSM and U.S. CDMA in the same device. I am pretty skeptical on this, however, given Apple's own system on a chip plans and the problems here are somewhat complicated.
- The share gains by Android are pretty dramatic and despite patent litigation by Apple, don't appear to be slowing. As Google works around the Apple patents, Android will continue to grow share.
- AT&T (NYSE:T) has slow rolled LTE, and as discussed over the last year it's in their interest to make sure LTE comes as late as possible. As AT&T continues to update its network, it will probably be better than the earliest versions of LTE for some time. Verizon on the other hand, wants LTE to come as soon as possible to short circuit handset disadvantages.
- If market share leadership is Apple's goal, then it needs to drop exclusivity. That doesn't mean Apple will do that, however. The company has a long history of doing the exact opposite of what everyone expects it to. Sometimes that works out--sometimes it doesn't (see the PC wars with Apple vs MSFT).
The net is, Android is coming a lot faster on board than LTE is, and as a result Apple needs to do a CDMA phone for both Verizon (VZ) and Sprint (S) to stay in the game. A lot of people are taking that WSJ report as a sign that exclusivity for AT&T is over, but there are many other possibilities and potential misinterpretations of what "CDMA" means.
In short, don't count your CDMA iPhones until it's hatched.
For the disclosure gods: Long AAPL.