Verizon may pay Apple to keep iPhone off of Sprint/T-Mobile

At this point, it's assumed that Verizon will get the iPhone in 2011. With all the speculation recently, the rumors are becoming more specific as each week goes on, which means that a launch is probably coming sooner rather than later. The latest round of information suggests that Verizon may pay Apple a hefty sum to keep the iPhone off of Sprint and T-Mobile in the United States.

The rumor, according to Investorplace.com, states that "the telecom [Verizon] is rumored to be paying Apple a hefty fee to bring the device to its network and to keep Sprint Nextel and T-Mobile USA from getting their own iPhones. Kaufman Bros. analyst Shaw Wu told investors in a note today that sources from inside Verizon claim that the company is not only accepting Apple’s terms to bring the phone to its network — it’s been rumored in the past that Apple was reticent to offer the iPhone on Verizon’s network because the iTunes and iPhone App Store would be forced to compete with Verizon’s VCast mobile storefront."

This type of engagement would represent a huge win for Apple, as it was rumored to have been initially turned down by Verizon before Apple went to AT&T when trying to sell its iPhone. If this turns out to be true, this could be a massive blow for Sprint who has been struggling to keep subscribers despite having some of the lowest prices on the market.  

Apple knows that it is in the drivers seat when it comes to negations with Verizon. Because of this, Investorplace states that Verizon gave in to Apple's demands to help make the deal possible. No date has been given, but it is widely speculated that Apple will announce the iPhone is coming to Verizon in January.

Report a problem with article
Previous Story

Ubuntu One now supports iOS-based AirPlay music streaming

Next Story

Tumblr now back online after being offline 24 hours

25 Comments

Commenting is disabled on this article.

I have Sprint service right now but I wouldnt get an iPhone if it came over.... Although I am tired of my BlackBerry...

Why can't it be easy like it is for the U.K, have it on multiple networks unlocked. And just swap sims and your on a new carrier.

TechDudeGeorge said,
Why can't it be easy like it is for the U.K, have it on multiple networks unlocked. And just swap sims and your on a new carrier.

What you wanted to say was rest of the world... I think US is the only place where most phones are bought directly from carriers and and many are exclusive to one carrier...

Leonick said,

What you wanted to say was rest of the world... I think US is the only place where most phones are bought directly from carriers and and many are exclusive to one carrier...

You still see it a bit over here in Canada too. Rogers had the iPhone exclusively for a bit and they're the only one that has the Focus too.

Sprint should shift its focus on WP7 and Android those two are eventually going to be #1 & 2. I can't see anything coming from Apple in the next iPhone being attractive enough to bring everyone back again. It's getting old where WP7 is new and exciting and Android is always adapting to what people want. Advertising should reflect a change in the air and a move to the other two OS's.

dogmai79 said,

You still see it a bit over here in Canada too. Rogers had the iPhone exclusively for a bit and they're the only one that has the Focus too.

Sprint should shift its focus on WP7 and Android those two are eventually going to be #1 & 2. I can't see anything coming from Apple in the next iPhone being attractive enough to bring everyone back again. It's getting old where WP7 is new and exciting and Android is always adapting to what people want. Advertising should reflect a change in the air and a move to the other two OS's.

Sure, when it comes to mobile OS Android and WP7 are likely to take the #1 and #2 spots. But not because what you said. It will be because of the vast number of handsets across multiple providers. If you compare sales of smartphone handsets, the iPhone spanks the competition (at least they did with the 3G, 3GS, and 4). No other smartphone handset came close to the sale numbers iPhone pushed and this trend will likely continue for the next couple of years.

I can't see any business sense in this for two reasons: Regarding T-Mobile and Verizon, they run on two separate technologies. Due to my location (rural area), I can't use a GSM phone, it must be CDMA because that's all that's offered here. So they would pay to keep someone off who can't use one anyway. 2nd, they would lose a lot of money in that deal since users could just go to AT&T anyway, or get an Android anywhere else.

I wonder if it does come to Verizon and if what the article says that Verizon paid off Apple how much will the phone cost us, will they change their rates just because of this phone?

Why would Verizon alone pay Apple to keep the iPhone off the two smaller companies and do nothing about getting iPhone OFF AT&T, Verizon's biggest competitor?

One would think that would be extremely anti-competitive. But just like AT&T, Verizon can sign an exclusive for CDMA and that would lock it down for a while. I like Sprint and think they would do well with their plans. I use Android and WP7 so its no skin off my nose but I think Apple should just go ahead and release it to both network and modify the bands for the GSM and call it a day.

Xenosion said,
This sounds a bit like anti-competitive practice doesn't it? Isn't that illegal?

Doubt it...carriers in America have been doing it for a long long time. Hell I'm pretty sure AT&T paid Apple a hefty sum to sell the iPhone only on their network, since other countries have the iPhone on multiple carriers.

Im not really sure how it works, i thought about that too but it will be available on two providers, AT&T paid Apple to keep it only on one carrier.

Xenosion said,
This sounds a bit like anti-competitive practice doesn't it? Isn't that illegal?

It shouldn't be a problem since the iPhone isn't the only phone on the market. If people don't want to use ATT or Verizon, they don't have to get an iPhone ya know?

/- Razorfold said,

Doubt it...carriers in America have been doing it for a long long time. Hell I'm pretty sure AT&T paid Apple a hefty sum to sell the iPhone only on their network, since other countries have the iPhone on multiple carriers.

And AT&T paid Samsung to be the only Carrier offering the Focus; on the other hand T-Mobile did something similar with HTC. The main issue is that here in the US carriers block the sale of SIM free phones while in Europe this is illegal...... as Apple found out when they tried to do it.

Someone can still buy the iPhone from Verizon and use it on Sprint...just takes a bit of knowhow and extra work as opposed to just swapping the SIMs.

**** carrier exclusivity...

asuh said,
FYI, Verizon and Sprint do not use SIM cards.

I never said they did...I said changing networks on Verizon / Sprint phones require more effort than just swapping out a SIM card.

Basically you have to find a bunch of settings (EPST / DST and your phones programming code), and change them from Verizon's to Sprint's. This will most probably require a jailbreak.

On GSM phones all you do is swap out the SIM card, provided your phone is unlocked.

bdsams said,

Incorrect, with LTE Verizon is converting to SIM cards.

Correct but Verizon, At&t, T-mobile will be using the same spectrum which is LTE (4G). Spirits 4G is using a different spectrum called Wimax.

/- Razorfold said,
Someone can still buy the iPhone from Verizon and use it on Sprint...just takes a bit of knowhow and extra work as opposed to just swapping the SIMs.

**** carrier exclusivity...

Without carrier exclusivity, you would be paying upwards of $700 - $900 for your phone.

RichardK said,
Without carrier exclusivity, you would be paying upwards of $700 - $900 for your phone.
Um no you wouldn't...the cost of the phone doesn't suddenly magically increase if it isn't carrier exclusive.

What makes a phone cheaper is the on contract price, you pay back the money you saved by over the length of your contract. You can still get contracts without carrier exclusivity.

Unkoil said,

Correct but Verizon, At&t, T-mobile will be using the same spectrum which is LTE (4G). Spirits 4G is using a different spectrum called Wimax.

That doesn't mean they will be using the same frequencies, sort of like how AT&T and T-mobile don't use the same 3G frequencies.