After years of speculation, waiting, false starts, and rumors around the country, it has finally happened– AT&T has lost its hegemony on the Apple iPhone. On Tuesday, January 11, Verizon Wireless will announce when it will begin selling the Apple iPhone in its stores and online. Most likely, this date will be February 3, according to some inside reports.
Finally, for the first time since the original iPhone was released on June 29, 2007 customers will have a choice as to which carrier they can go to and subscribe. In traditional capitalistic stance, this will open up two advantages:
1. A price war between the two carriers should see prices for monthly voice and data services drop.
2. Competition is healthy for innovation. Verizon should be able to up the ante in terms of the types of offers and services offered, forcing AT&T to improve their own services as well.
The main difference will be in the type of network each carrier will be on. AT&T uses the GSM (Global System for Mobile Communication) standard, which is the primary one used around the world and is used by roughly 80% of the world’s mobile phones. Verizon Wireless, on the other hand, uses the CDMA (Code Division Multiple Access) standard. However, these standards don’t really make much of a difference to the end user, except if one wants to remove a SIM card and throw it into another phone.
This moves comes at a pivotal time for Apple. While the iPhone is still a hot selling commodity, it is facing pressure from the Google Android mobile operating system. Unlike Apple, Google gives away its software for free to various handset manufacturers and then collects money from the back end with advertising revenue. Over the past year, the Android enabled phones have made huge gains in the US market and have helped companies such as Motorola come back from the brink of irrelevancy with smart phones such as the Droid.
I’m looking forward to seeing how AT&T will be responding to this news. I’m sure it’s no surprise to them. They must have been anticipating it for some time now. Perhaps I’ll buy some Put options on AT&T’s stock come Monday morning.