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Verizon and the Apple iPhone: A Possible Partnership The Apple (AAPL) blogosphere is buzzing with what appears to be sound evidence that Verizon (VZ) will eventually be providing an iphone to run on its network. A variety of prominent Apple bloggers and writers have apparently gotten invites from Verizon to an event on Tuesday. The invitations are nontransferable, which implies that a select audience is desired and, for this reason, that the huge announcement is from the wings. What exactly would an iphone for Verizon actually indicate? Here are 5: Verizon's network is going to be tested. iphone customers are notorious data hogs. Many bloggers have slammed AT&T (T) for failing to provide good information and voice service on its network, even though AT&T has consistently claimed that it is network is the fastest from the country. Both sentiments is possibly true. But Verizon, which everyone agrees has generated an excellent wireless network, will certainly struggle to take care of the massive usage habits of iphone end users. One of the things of Verizon's CDMA-based network will probably work heavily in the favor, though. The network doesn't support simultaneously telephone call and info network operation. So, at least when Verizon customers are talking, the industry relatively data-light application, they won't be also Web surfing. Verizon will likely surpass AT&T in amount of subscribers. This competition is currently neck-and-neck, with Verizon just a million shy of AT&T. But Verizon, which will probably put extensive sales muscle behind the iphone and will feature the handsets in its stores, should gain enough momentum to surpass Ma Bell in total subscribers. That's major because Verizon has struggled to keep up with AT&T as the latter rode the iphone to rapid subscriber growth. Apple should see an additional bump in sales and profits. How could it not? The iphone is highly profitable for Apple -- not quite as profitable since it's computers but more so than every other product in the lineup. In addition, additional iphone users will feed into Apple's fast-growing revenues from the highly popular App Store for that iphone. Those revenues could hit $2 billion in 2011. This is a drop while in the bucket of Apple's total revenues, but it's pure profit, for the most part, since the incremental price of operating the App Store is relatively low at this time. It's also likely that quite a few new iphone users, introduced to Apple by Verizon, will end up buying Apple computers. All told, it's a win-win-win for Apple CEO Steve Jobs. Apple could turn its phones loose on Verizon's superior LTE 4G network. Verizon may be the first mobile carrier to roll out a network using a technology called LTE. While other carriers are running networks they call 4G -- most notably Sprint (S) -- LTE is supposed to become a genuine speed demon and have the capability to handle higher data throughput. Without doubt, Jobs would love to see what happens when Apple's iPhones start running at warp speed, which Google's (GOOG) Android phones happen to be doing on Verizon's LTE network (then one Verizon is hyping big-time using its "Download a Song in 4 Seconds" ad campaign). AT&T is also pursuing an LTE network but at a more stately pace. So, expect Apple to be released with an LTE-ready phone, perhaps this winter or perhaps inside summer. But no doubt, it's coming. Verizon's data plan structure will determine the near future profitability from the mobile info business. The Wall Street Journal is reporting that Verizon will offer you a limitless info intend to iphone customers. AT&T began that way but moved away from unlimited data offerings, partly because many people used a lot info it slowed up the network. AT&T, clearly, is trying to create a more finely grained tiered-pricing structure. But unlimited data is really a powerful advertising tool. With unlimited information, however, comes unlimited risks and, potentially, an unlimited appetite for bandwidth as more rich mobile applications suck up more network time (like TV, streaming apps and music, amongst others). For Verizon, this may be a very smart move. Using its LTE network and perhaps knowing an LTE-ready iphone is from the pipeline, it could use its faster network and unlimited info plan to take subscribers from AT&T. Whatever the case, the next with unlimited information is probably less profitable for mobile carriers.
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