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12-06-2010, 08:56 AM #1
Verizon Rumored to Pay Up to Keep T-Mobile, Sprint iPhone-less
Prominent Kaufman Bros. analyst Shaw Wu revealed Monday that his sources say Verizon is every bit as eager to keep the iPhone away from competitors as it is to add the Apple smartphone to its own network next year. According to Shaw, Verizon may "pay" Apple substantially to ensure such an arrangement. The move, however, would not be tantamount to Verizon paying off Apple to keep competition at bay. Instead, the arrangement would manifest as Verizon giving in to more of Apple's demands in the ongoing effort to expand iPhone's reach into Verizon territory in the United States.
"We are hearing that (Verizon) does not want iPhone, the hottest selling smartphone, available on T-Mobile USA and/or Sprint and may be willing to pay for exclusivity to itself and AT&T," Wu commented in a note to investors. "For these reasons, (Verizon) could be more willing to give in to Apple's terms." Of course, we don't know the specifics of those terms. But Business Insider reported Monday morning that Verizon is "willing to pay Apple a premium price per device to keep it off Sprint and T-Mobile." The iPhone subsidy from AT&T is widely believed to be roughly $400 per handset, the article notes.
In recent months, Apple has vastly broadened its network of retail and mobile associates. From expanding the retail outlets that carry iDevices to partnering with Verizon in the US to bring the iPad to Verizon customers, it will no longer come as an unfathomable shocker if, in fact, AT&T loses its iPhone exclusivity in the US at some point next year. While it now appears that carrier expansion is inevitable for the iPhone, the bigger question is just how far-reaching the carrier expansion will be.