The Verizon iPhone rumor is as old as the iPhone itself. So whenever anyone trots it out, you take it with a grain of salt. It’s like The Beatles coming to iTunes. It will happen eventually, but who knows when. That said, today’s Wall Street Journal report about Verizon readying to launch the iPhone in early 2011 has all the makings of a good old Apple-controlled leak once again. And so it may be time to really believe.
Now, I of course don’t know for sure that Apple fed WSJ this story — but let’s look at the recent history. In January, as rumors were swirling about the iPad, the WSJ had a story suggesting the tablet computer could run around $1,000. At the time, I pointed out why this reeked of Apple setting expectations low so they could blow them out of the water. A few days later, a former Marketing Manager at Apple backed this up. The result? Steve Jobs on stage announcing the iPad would start at just $499. Boom.
This past July, rumors were swirling that Apple would have to recall the iPhone 4 due to its antenna. When Apple called a surprise press conference, these rumors only intensified. But one day before the event, there was the WSJ again with the story that Apple would not be recalling the device. Again, this seemed to be all about setting expectations. The next day, did Apple recall the device? Nope. But no one panicked because everyone knew they weren’t going to.
If you go back to last year, on June 19, Apple had their most successful product launch ever (at the time) with the iPhone 3GS. That night, after the stock market had closed, WSJ broke the news that Apple CEO Steve Jobs had undergone a liver transplant months earlier while on his medical leave of absence. The timing of such a scoop was curious at best — and there’s no denying that the timing was advantageous to Apple. Jobs was said to be fine, and returning to work shortly.
What did all of those stories have in common? Each was authored or co-authored by WSJ reporter Yukari Iwatani Kane. And guess who co-authored today’s Verizon iPhone story as well? Yep.
So why would Apple want to leak such news? Well that’s obvious. News of a Verizon iPhone would quickly quiet all the talk of Android’s momentum against the iPhone in the U.S. marketplace. That talk, backed up by report after report after report, is louder than it has ever been. Android is clearly outpacing the iPhone in terms of sales in this country. And the media is latching on to that story big time.
Considering the disproportionate amount of money Apple makes from the iPhone (billions) versus what Google makes so far from Android (next to nothing), you might think Apple wouldn’t care about this. But indications are that they do. Jobs takes thinly veiled shots at Android all the time (often in response to not-so-thinly veiled shots from Google). And his leaked talk with employees at the beginning of the year makes it clear that he feels threatened by Android.
And today marks a particularly interesting day because there is a tidal wave of new Android devices that have been announced at or around CTIA here in San Francisco. In the mobile world right now, it’s Android, Android, Android. And it’s not just consumers that are sensing this — it’s the all-important developers too. And considering that Apple only puts out new phones once a year, in the Summer, they have nothing to counter with. Except the Verizon iPhone.
The WSJ story also notes that a fifth generation iPhone is in the works as well. But that’s obvious. That’s on the same schedule as all of the previous iPhones. In fact, this fifth generation iPhone has probably been in the works for two years now. The key to the story is that Pegatron will be mass-producing a CDMA iPhone by the end of the year, and Verizon will be selling it.
This is actually the second Verizon iPhone rumor Kane has reported in recent months. But the first one, in March, was careful not to specifically say that Verizon would be getting the iPhone — just that Apple was working on a CDMA version of the device. All indications are that this is true, and has been true for some time — we’ve heard the same thing. But that story may have just been to whet people’s appetite with the hint of Verizon. Today’s is the meat.
And interestingly enough, the original version of today’s story said the exact same thing: just that a CDMA version of the iPhone was coming. It was later changed to specifically name Verizon as the provider it would appear on. Some people weren’t getting the message clearly enough, it seems.
Some of the Verizon-specific additions:
Apple Inc. is making a version of its iPhone that Verizon Wireless will sell early next year
Verizon Wireless has been meeting with Apple, adding capacity and testing its networks to prepare for the heavy data load by iPhone users, according to one person familiar with the matter. The carrier is seeking to avoid the kind of public-relations hit that AT&T took when the boom in data-hungry iPhones overtaxed its network, especially in New York and San Francisco.
Apple originally decided against developing a phone for Verizon to focus on a version based on GSM, a more prevalent mobile technology used by AT&T and most mobile operators in the world, people familiar with the decisions have said.
Verizon, in those earlier discussions, balked at Apple’s requirement that Verizon not allow its retail partners to sell the phone, people familiar with the discussion said at the time. Verizon also declined to give up its ability to sell content like music and videos through its proprietary service, these people said.
That last part in particular scares me. While I will absolutely be the first person in line to buy an iPhone that runs on Verizon’s network. There’s a difference between that and a Verizon iPhone. The iPhone that Verizon wants to sell undoubtedly is loaded up with the same crap they now load on their Android phones. Since Verizon has leverage now with Android’s popularity, will Apple have to give in to some of Verizon’s demands? I hope not, but I’m worried.
If Apple really does care about U.S. market share — and again, indications are that they actually do — they need Verizon more than Verizon needs them. And that’s a bad place to be in — and one Apple isn’t used to in recent years.
Is it possible that if this is a leak, Apple is simply using it as a negotiating ploy once again? Maybe. But it seems like there’s too much smoke — all the CDMA reports, AT&T saying dumb things about how they’re not scared to lose the iPhone, and the fact that Apple really does need another carrier if it wants to continue growing in the U.S. — for there not to be truth to the rumors this time.
Update: Here’s the WSJ comment on the matter:
The notion that the Journal only relies on Apple’s strategic leaks is risible.
I’m honestly not sure how to read that. Did they misread what I wrote and think I said WSJ only relies on the leaks? Or are they implying that they do get leaks but that those aren’t the only thing they rely on?
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