by Tom Kaneshige

Verizon’s Apple Pressure Cooker

Oct 26, 2009
MobileSmall and Medium Business

Will Verizon carry the iPhone? It's up to Apple.

Verizon is turning up the heat for Apple to cut a deal and release the iPhone from AT&T’s grasp.

Will Verizon carry the iPhone in the near future? “This is a decision that is exclusively in Apple’s court,” said Verizon CEO Ivan Seidenberg during an earnings call this week.

Seidenberg’s words surely appeal to the growing base of iPhone owners and wannabe owners frustrated over AT&T’s poor 3G coverage. Many told me they will hold Apple accountable if AT&T receives a contract extension. The original exclusive contract runs out in the middle of next year.

Verizon has launched an aggressive ad campaign comparing its 3G network with AT&T’s 3G network, which no doubt grates on iPhone owners’ already frayed nerves. But rest assured, AT&T needs Apple more than Verizon does.

Verizon’s wireless portion of its business had a solid third quarter. Verizon added a net 1.2 million customers to bring its total to 89 million, up 25.7 percent from the third quarter last year. Its revenue increased nearly 25 percent. (Verizon’s overall operating revenue grew 10.2 percent to $27.3 billion.)

Moreover, Verizon is launching the BlackBerry Storm2 later this week and has plans to launch the Droid from Motorola in November. These additions, Seidenberg said, “will broaden the base of choice for customers and hopefully Apple and others will join the bandwagon.”

AT&T’s strong earnings last week, on the other hand, rode record 3.2 million iPhone activation sales for the quarter. Forty-percent were for new customers. “If that 40 percent metric is accurate, then Apple’s iPhone single-handedly generated an astonishing 92 percent of AT&T’s post-paid subscriber growth,” writes John Paczkowski of All Things Digital.

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