How Apple's iPhone Changed Verizon Wireless

Verizon Wireless (VZ) is reportedly talking to Google (GOOG) about using its upcoming mobile operating system. It has unveiled a bevy of phones for the holiday season and generally seems more hip overall–at least for Verizon. So why the change?

Two words: Apple (AAPL)’s iPhone.

There is no way Verizon, which arguably has the best network but a lackluster phone lineup, would be this aggressive if it weren’t for a potential AT&T (T)/Apple iPhone threat (which by the way hasn’t materialized for Verizon Wireless yet). The iPhone means rivals have to generate some kind of cool factor. Verizon Wireless is so aware of this that it’s even chatting with Google, which may be bidding for 700 Mhz wireless spectrum.

To wit:

• The Wall Street Journal reports that Verizon Wireless is in advanced talks with Google about using the search giant’s mobile operating system for its handsets. The move is notable because Google would get a huge win with Verizon Wireless on board. Verizon would get cheaper handsets–Google’s mobile OS would be open source–and Google gets to dent Microsoft’s Windows Mobile and more ads of course.
• Verizon Wireless has dropped its complaints about the FCC’s rules over the upcoming 700 Mhz auction. The Journal tried to link the Google talks with the FCC developments but they may not be related. It could be that Verizon figures its better to play ball than fight the inevitable freeing of wireless phones.
• Verizon Wireless’ new phone lineup is pretty sharp. Verizon Wireless is notorious for having a weak phone lineup. Want a snazzy handset? Wait a year–or more–for it to appear at Verizon Wireless. Meanwhile, Sprint (S) and AT&T already have it. That’s changing and as a Verizon Wireless customer (with a clunky Motorola Q) it’s a welcome development.

These developments are quite a sea change for Verizon Wireless. Among wireless carriers, the innovators on phones and new technology have been T-Mobile and Sprint. There’s a good reason for that: Both are smaller than AT&T and Verizon Wireless and need to roll the dice to get bigger.

Here’s to hoping Verizon Wireless’ newfound edge benefits wireless customers.

Comments

[King Kang:]

T-Mobile, Sprint, and Verizon are all being mentioned for this deal www.newsvisual.com/new... . I admit that Verizon will definitely try to seal this deal with Google and the GPhone. However, I also think that if Verizon needs this deal really bad, Sprint needs it even worse. Their CEO was forced out due to poor performance, their customer satisfaction ratings can't get any lower, and they keep losing customers to AT&T and Verizon. Sprint has been in a slump ever since the disasterous Nextel deal. They are hoping a deal with Google will help them pull out of their slump.

2007 Oct 31 02:46 PM

[Tom B:]

Google would be insane to make a handset; as a GOOG holder, I hope they don't. I hope Verizon starts to make an increasing number of mistakes. As a Verizon CUSTOMER, I'd like nothing better than to see them tank to the point where they could be acquired by ATT.

2007 Oct 31 10:14 PM

[Jon T:]

Maybe it was a shame on Verizon that they were so short sighted that didn't see the opportunities they might have had by supporting Apple with the iPhone.

2007 Nov 01 09:34 AM

[squawk:]

Disagree. Deal AT&T struck with Apple is not a deal that any other carrier would have struck. AT&T was desperate & had to make a move to offset a declining subscriber base.

The iPhone definitely provided AT&T Wireless with the jump start it needed. Verizon Wireless, in contrast, was not & never was in such a desperate situation to "give the farm away" as what AT&T did with Apple.

2007 Nov 01 04:15 PM