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Apple May Be Making Verizon-Compatible iPhone

I'm not surprised that, as the Wall Street Journal reports, Apple could go into production on an iPhone that works over Verizon Wireless's network as soon as September 2010. In fact, I would wager that Apple has continuously maintained a working prototype of a CDMA-network version of the iPhone, given how Apple hedged its bets on the Macintosh processor front and Apple's sometimes stormy relationship with AT&T. (The article mentions just Verizon, but Sprint Nextel also has a national CDMA-based network, and has a bilateral roaming relationship with Verizon.)

There's no technology or patent bar that prevents Apple from making a CDMA version of the iPhone separate from the GSM model it sells worldwide. CDMA is used primarily by Verizon Wireless and Sprint in the United States, South Korean carriers, and in smaller markets worldwide. GSM is the dominant standard with as many as eight times the subscribers around the globe.

Rather, as I wrote eight months ago in "Why AT&T Has a Lock on the iPhone (26 June 2009)," Apple didn't then have a close relationship with a chip maker that created CDMA radio silicon. That wasn't insurmountable, but we know Apple's penchant for secrecy, and any new partner would have to keep things just as quiet as Infineon did for its role in the original iPhone and subsequent models.

In that article, I wondered if it would make sense for Apple to pursue CDMA customers, even though Verizon and Sprint have a combined 140 million subscribers, including some using Sprint's old Nextel iDen network standard. The clock is ticking on 2G and 3G CDMA, as both Verizon and Sprint have committed to different 4G standards.

Verizon is going with LTE, the same as AT&T and most carriers worldwide; Sprint chose WiMAX, which it's deploying already via its Clearwire division. Sprint just announced its first 3G/4G phone - an Android model - due in a few months and targeted at heavy video users. LTE-based phones aren't likely until 2011 at earliest.

In five years, LTE will be available nearly everywhere that 3G is now in the United States with far greater bandwidth and reach; WiMAX's future is less certain, but it's highly possible it will also cover the United States. (Sprint and Clearwire's current plans are to pass 120 million people with WiMAX by the end of 2010; Verizon is more aggressive about stating it will have full 3G overlay coverage with LTE in a few years.)

But it has become clear since I wrote that article that 2G and 3G networks will be around for quite a while still, partly because hardware made for them will get cheaper and cheaper, and 4G networks will drain off higher-bandwidth users and usages, even as 3G network capacity is being improved.

It makes more sense to me now that Apple would want a CDMA phone that it could sell for several years, upgrading all the while, rather than sitting out of that market, letting Google's Android and potentially Windows Phone 7 Series dominate the CDMA networks.

If a CDMA-capable iPhone appears later this year, when and how Apple makes it available becomes merely a matter of negotiating the desired details with Verizon or Sprint, rather than requiring a technological miracle or a radical rethinking of its strategy. In several markets, Apple already sells the iPhone to competitive carriers. Wouldn't that be nice in the United States, too?


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Comments about Apple May Be Making Verizon-Compatible iPhone
(Comments are closed.)

Jim Matthews  2010-03-29 16:02
Are there chips that can do CDMA as well as GSM, or would a CDMA iPhone have to be a different hardware model from the GSM one?
Glenn Fleishman  2010-03-29 16:14
As far as I'm aware, there aren't any dual-GSM/CDMA chips. You can get a Verizon/Vodafone phone, I believe, that has two separate technologies built in to roam between Verizon CDMA here and Vodafone GSM everywhere else. (Vodafone is a minority Verizon Wireless owner.)

There's no particular technical reason against it, but the cost of integrating to separate, incompatible technologies that would likely require separate support chips is a lot higher than making a separate model.

From the carrier perspective in the U.S., which is the real customer of most American-oriented phones, it's better to have lock in to a network, anyway.

In other countries, you have more flexible deals about buying and using phones, but in many countries all the carriers use the same standard, so there's a certain amount of portability built right in.
Strider  2010-04-01 09:03
See the Blackberry Tour:

From the article: It supports 3G EV-DO Rev. A networks in North America, as well as 3G UMTS/HSPA (2100Mhz) and quad-band EDGE/GPRS/GSM networks abroad.
Strider  2010-04-01 09:07
Aargh...the comment system ate my link. Here it is again:
Timothy Meade  2010-04-01 10:05
Those world phones mostly use versions of the Qualcomm MSM76xx which do support both GSM and CDMA with a single baseband and RF solution. These are limited to the numbers of bands they can support however.
Glenn Fleishman  2010-04-01 10:10
Sorry, to control spam and other factors, we don't yet allow URLs to be embedded. When we add full accounts to TidBITS, we will likely allow registered users with some history to post URLs. It's irritating, I know, but it avoids a massive amount of trouble!
Incorrect. Qualcomm Gobi chipset supports both.
Steve Hyman  2010-03-29 17:40
That would be wonderful. I want an iPhone so much, but can't bear the thought of going to AT&T
TomSchmidt  2010-03-29 18:04
If Apple makes a CDMA phone & puts it on Virgin Mobile USA (it's on VM in Australia & Canada), I'm all over it like a cheap teenage girl phone (Adam's way of refering to VM USA).
Chris Natale  2010-03-30 04:07
How does Apple get around the five-year exclusivity deal with AT&T? Until that question is answered, it seems to me that all technical discussions are moot
Adam Engst  An apple icon for a TidBITS Staffer 2010-03-30 04:56
I've never seen anything confirming that Apple's deal with AT&T has a five-year exclusivity clause. It's possible the contract is not exclusive in precisely the way that matters, that it's not five years, or something else entirely.
Jeff Carlson  An apple icon for a TidBITS Staffer 2010-03-30 09:09
I'm sure there are out-clauses too. It would be reasonable to assume that if AT&T isn't providing the services that were agreed upon at the outset (like, oh, TETHERING) Apple could cut the exclusivity short. Maybe that's how they got AT&T to do the great iPad data 3G deal.
Ronald J Kimball  2010-03-30 10:24
Five days ago you wrote this in a comment on your AT&T MicroCell article:

"Per other articles written at this site and elsewhere by yours truly, it is extremely probable there will be no Verizon nor Sprint CDMA-based iPhone (although expect an LTE one in 2012). T-Mobile is a candidate, but we haven't heard word one leaked about that."

Now you say you're not surprised that Apple could go into production on a Verizon CDMA iPhone as early as September. What changed?
Glenn Fleishman  2010-03-30 11:00
I had thought that if Apple didn't get into the CDMA game in 2009, it was unlikely that it would jump in this late.

However, with all the specifics in the Journal article about a CDMA phone (a manufacturer and delivery date), it seems like Apple is well along in the process. I expected more leaks because the CDMA world involves fewer players and I didn't think Apple could keep a lid on it.

The issue for me was never whether Apple could make the phone, but whether it was poised to do so. I figured without any leaks in 2009, it wasn't ready in 2010. They may be.

I also didn't think a couple days ago about the issue of Android and Windows Phone 7 Series. Those two platforms, along with the perennial favorite BlackBerry, will dominate CDMA. Apple may not like to give its competitors an edge by letting them own Verizon among them.
Timothy Meade  2010-04-01 10:08
Any speculation on the choice of chipset or why they stayed with Infineon in the iPad (when snapdragon would have supported both technologies and offered an integrated solution)?
Glenn Fleishman  2010-04-01 10:11
I suspect Apple simply liked working with a company that did every last single thing it asked to do, and has managed to avoid leaks in the four years of collaboration.
charlie  2010-04-01 09:13
I could see appple release an "unlocked" CDMA phone. Charge $700 for it. People who really need verizon would pay, and Verizon would be glad to have the outlet for pressure valve. AT&T would continue to be only place where you could get a subsidized iphone for $199 or $299.

The last thing apple wants to do is cut the price of the phones. Competition would do that.
The problem with this is that Apple has made a big deal in their commercials about the simultaneous voice+data capabilities of the iphone. This isn't possible on CDMA.

They would probably have a lot of dissatisfied customers on CDMA who suddenly get mad that the phone doesn't live up to earlier claims.

Apple may not want to risk that bad publicity. It's not like they're having a hard time selling these things as it is...

I think the CDMA rumors are just a way of putting pressure on AT&T.
Timothy Meade  2010-04-01 10:11
But isn't it at&t doing that messaging, not Apple?
Hamranhansenhansen  2010-04-01 16:10
Apple also promotes that. There are a number of iPhone commercials where the user is talking on the phone and using the data service.

One of the biggest problems with a CDMA phone would be the bifurcation of not just the manufacturing, but the marketing, training, and support. Asterisks everywhere.
Strider  2010-04-01 09:15
You write: "But it has become clear since I wrote that article that 2G and 3G networks will be around for quite a while still, ..." Did you mean that it has become clear to YOU? I think that's pretty clear to anyone who follows 2G, 3G, 4G cellular technologies.
(I've seen also make the same error.)
Glenn Fleishman  2010-04-01 10:14
Oh, I don't mean it quite like that. Of course, 2G and 3G will be around for quite a while. I meant, "around and generating substantial revenue" for quite a while.

1G networks were operated for years after they were cost effective to run because of deals carriers had for CDPD (very low speed packet data), rural markets, and some FCC deals. AT&T wasn't able to turn off 1G until 2009, which is how it freed up 850 MHz spectrum to better 3G in-house/building penetration.

What I meant is that I thought the plan last year was for an aggressive move into 4G networks so as to move the money there, and eventually keep 2G/3G running as a legacy system that paid for itself.

Instead, it's become quite clear to me this year that 2G/3G will be cash cows, and carriers will be scrambling to bring users onto 4G networks, partly due to initial minimal coverage, and a lack of viable voice options.
Robert  2010-04-01 09:17
IMO the reason the iPhone is not on Verizon in not CDMA. It's about who controls the phone / software and access to the consumer. Verizon wanted total control like all their other phones but Apple knew this would be a disasters for the iPhone and said no.

Unless Verizon gives Apple this control we'll never see the iPhone on their network.

I have seen nothing that even hints they (Verizon) are willing todo this.

Hamranhansenhansen  2010-04-01 15:48
Verizon has said publicly that they want the iPhone and they said it was entirely in Apple's hands.

With all that Verizon did to market the Droid, it took them 4-5 months to sell as many as iPhone 3GS sold in its first weekend.

If Apple offers them a CDMA iPhone, there would be a lot of pressure on them to take it on Apple's terms.

David Weintraub  2010-04-01 09:18
I have T-Mobile: They're GSM. I want my iPhone dammit!

There are a couple of things at work. Verizon has always insisted on control and squeezing its users for every penny. I can imagine Verizon insisting on Apple having to use its VCast store or to allow Verizon to allow certain features, but not others.

I see two things converging on this: Verizon is realizing that the good ol' days when carriers had the power to decide which phones could use their network and the features these phones would have are long gone. Verizon is probably more flexible than they use to be.

The other is that Verizon's LTE rollout is delayed. Verizon which owns most of Verizon wireless has spent countless billions of dollars rolling out FIOS and the company is in a lot of debt. There isn't the money for a grand LTE rollout, so CDMA will be around for a while. Apple was suppose to be waiting for LTE before granting Verizon the iPhone. Now, with Android and the delay, there isn't time to wait.
Glenn Fleishman  2010-04-01 10:15
You can use an iPhone on T-Mobile -- just at 2G speeds, which T-Mobile charges a small price for. If you could deal with EDGE when not on Wi-Fi, you've got a nice deal there.

LTE has not been delayed per se. It's actually happening faster than most people predicted a couple years ago. Back in 2008, there was little expectation of phones before 2011 or 2012, and now it looks like there may be phones in 2011. I personally thought we'd see mid-2011 for any production deployments (which is more like AT&T's plan).
Hamranhansenhansen  2010-04-01 16:45
Everybody's assuming a CDMA iPhone would be an iPhone with the GSM guts replaced with CDMA guts. But couldn't it just be an accessory for an iPod touch? A case with CDMA hardware in it that turns an iPod touch into a CDMA iPhone? You'd put the case on any iPod touch and the Phone and Text apps would appear and would work over CDMA.

The big problem with a CDMA iPhone is Apple has to build proprietary (and obsolete) hardware and then support it, deal with consumer confusion, multiple SKU's,different bandwidth and battery ratings, and so on. If the Verizon iPhone was just an iPod touch in a case then it doesn't get in the way of the actual iPhone at all. It's just yet another iPod accessory.

Or if you put the iPhone in the CDMA case you'd have a phone that worked on Verizon in the US and GSM internationally, for users who want that.

A lot of Verizon/Sprint subscribers apparently already have iPod touch along with a feature phone and might jump at a way to unite their 2 devices.
Glenn Fleishman  2010-04-01 16:54
I can't see that happening, because it sounds too complex to manage.

Really, Apple just has to engineer a CDMA module into the guts instead of a GSM module. The modules are tiny, just a few chips.

More of concern would be all the firmware/OS stuff to make call handling work identically, and to deal with what commenters have noted here: the lack of simultaneous voice/data access in EVDO.

As to obsolete, as we've talked about here in the comments, the 4G networks that are coming won't be replacements for 2G or 3G any time soon. It might be 10 years or more before you see most voice traffic handled over 4G.

If 2G/3G CDMA is obsolete, then so is 2G/3G GSM, which it's not...