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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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