NEW YORK – In an announcement that was widely expected and highly anticipated, Verizon Wireless announced at its New York press conference on Tuesday that it will begin selling Apple's iPhone in early February, ending AT&T's four-year run as the phone's exclusive carrier.
"If the press writes something long enough and hard enough, it eventually comes true," Verizon President Lowell McAdam said at a press conference in New York City. "We're bringing the fruit of our labor with a giant partner, and that's Apple."
The Verizon iPhone is a modified version of Apple's iPhone 4 that has been adapted to run on Verizon's 3G CDMA network instead of Verizon’s just announced, faster 4G LTE (Long-Term Evolution) network. The early LTE chip sets just weren't ready yet, Apple COO Tim Cook said at Verizon's event. This means customers wouldn't be able to chat on the phone and surf the Web simultaneously, as they can on AT&T's iPhone though the Verizon iPhone will offer the ability to use the iPhone 4 as a personal wireless hotspot for up to five Wi-Fi enabled devices, something the AT&T iPhone does not offer.
"The first-generation LTE chip sets force some design compromises, some of which we would not make," Cook said. "Secondly -- and most importantly -- Verizon Wireless customers have told us they want the iPhone now."
Asked when an LTE Verizon iPhone might be available, Apple's Cook said he was "not going to comment on any unannounced products." Verizon launched 10 new 4G LTE capable devices last week at CES in Las Vegas including Googla Android-powered smartphones and tablets from Motorola, LG, Samsung and HTC. The Motorola Atrix 4G smartphone and Xoom tablet won “Best of Show” at CES. Cook did let slip that the Verizon deal is not exclusive meaning the CDMA iPhone could eventually come to other carriers who also rely on CDMA networks, such as Sprint.
The Verizon iPhone will be $199 for a 16 GB device and $299 for the 32 GB version with a two-year contract, in-line with AT&T’s pricing. Existing Verizon customers will be able to pre-order the phone beginning Feb. 3. The phone will launch in Apple and Verizon stores and online starting Feb. 10 and Verizon customers eligible for "new every two" upgrades will be able to use those upgrade credits toward an iPhone. In an attempt to prevent defections, existing AT&T customers with iPhones who want to switch carriers will have to pay early termination fees of up to $325 to break an ongoing contract if they are still their two year term and they will need to purchase a new device from Verizon.
Verizon did not discuss pricing for the data portion of its iPhone plans. Verizon currently sells its smartphone customers unlimited data access for $30 a month but that could change for the Verizon iPhone. AT&T had unlimited data plans early on but eliminated their unlimited data plan last year in favor of tiered data plans because iPhone data usage had overwhelmed AT&T’s network. AT&T was ranked the worst carrier in terms of customer satisfaction according to Consumer Reporters. Of those surveyed, many of them were iPhone users. AT&T current data plans are $15 for 200 MB a month or $25 for 2 GB a month. According to Nielsen, 88% of current iPhone users use the Internet on their iPhones, which is four times more than an average phone user and according to search giant Google, Apple iPhone users do 50 times more Google searches than an average mobile phone user.
"We talked about the device pricing, but we're not going to talk about the pricing for the network for that connectivity," Mead said. "We'll have announcements in the future."
Neither Apple’s CEO Steve Jobs nor Verizon’s CEO Ivan Seidenberg appeared at the short event.
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