Tuesday, May 25, 2010

Sprint iPhone: Why Apple Picked Sprint Over Verizon and Why AT&T is Crying

The internet is still buzzing about the news of a possible Sprint iPhone. Of course, the "news" is simply a completely untraceable and unverifiable rumor. So it's pretty irresponsible journalism to even treat this like a real story, let alone to devote any print to commenting on something that could turn out to be nothing.

But I'm not a responsible journalist, so fuck it. This is too juicy and fun to think about.

So lets just pretend that it's true. Let's say there really is a Sprint iPhone and it's going to be released next week. Better yet, let's say that not only did Apple make a deal with Sprint to provide service for the iPhone, but that it DIDN'T make a deal with Verizon, yet. Wow, that is news! (Or it would be, if it turns out to be true.)

So let's jump to the post (possibly imaginary) Sprint iPhone announcement commentary and analysis.

What a fuck you to Verizon! What a bitch slap to AT&T! Apple really is showing the telecom world who's it's daddy.

Everyone (especially anyone with an iPhone) knows that AT&T service seriously sucks, so it was just a question of time before Apple opened the iPhone up to other carriers. Remember, to a large extent, Apple originally made it's deal with AT&T exactly because they were bunglers. It was a second tier company that desperately needed a hot product. Verizon was the top company, and it was luke warm about the iPhone, and unwilling to make a deal on Apple's terms. Now, of course, the iPhone's enormous success lined the pockets of AT&T and gave it huge profits for several years and made it a strong number two.

Verizon is still the number one cell carrier in terms of market share, but it's profits have been in the toilet and not having the iPhone is the main reason. Clearly, Verizon needs to make a deal. At this point Apple can demand and get better terms. But how much better? Also, if Apple does make a deal with Verizon, it's possible that once Verizon sucks in some of that iPhone cash, it could look for ways to stab Apple in the back. Clearly these companies don't have a lot of love for each other and neither Verizon or AT&T are happy about how much they need Apple.

Enter Sprint. Sprint is the number three company and in serious trouble. It desperately needs to make a big move. And Sprint made it. It bet the farm on a 4g network and rolled it out well ahead of Verizon and AT&T. But what to put on that network? Is it possible Sprint made this bet knowing that it would get the iPhone once the network was ready?

Well, I don't have any inside information or sources. So let's just pretend I do. My inside source at Apple says that Sprint and Apple have been in deep secret discussions about this all along, and Apple knew it would come out with a Sprint enabled CDMA iPhone in June. Apple threw AT&T a bone by giving it an exclusive window on the iPad. (According to my imaginary source, a CDMA iPad will come out in time for Christmas.)

Which brings us back to Verizon. One of the key reasons Apple hasn't had a Verizon iPhone is that the iPhone chipset is GSM rather than CDMA. Since most of the world is GSM, it made a lot of sense for Apple to focus on that market first. It was a brilliant move. But if Apple comes out with a CDMA iPhone for the US market why not give it to BOTH Verizon and Sprint?

That's were the fuck you to Verizon comes in. My imaginary sources at Apple say Steve Jobs is still pissed off that Verizon has tried to play hardball in negotiations for so long, and, he's still pissed off at AT&T for just sucking up iPhone profits and not reinvesting in a better network (Which the iPad in particular needs). So making deal that allows Sprint first crack at the new iPhone is great revenge. Moreover, propping up the third place telecom makes sure there will be plenty of competition in carriers in the foreseeable future which is very good for Apple.

This is bad news for both Verizon and AT&T. Those companies would prefer if the cell phone business was an Oligarchy with only two top bosses. A resurgent Sprint is not in either of their best interests. If Apple had come out with only a Verizon iPhone, or even let Sprint and Verizon have them at the same time, Verizon could continue to use it's size to take away market share and hopefully Sprint would fade away.

But the publicity of being the first non-AT&T iPhone is worth millions in advertising for Sprint, much more than for Verizon. It really makes Sprint a major player again. And what can Verizon do if Apple says it can't have the iPhone until months later? Nothing. Absolutely nothing.

Talk about playing hardball. But that's the way Apple rolls. Let's be realistic, these telecoms have been ripping off customers for a long time, fighting technology and fighting the future. Well, the future just landed on top of them.

We'll find out next week if any of this is real, but boy, I sure hope so! I'm looking forward to my Sprint iPhone and put a Sprint iPad on my Christmas list!

UPDATE: Here's a piece predicting a Verizon iPhone won't come in June, but saying nothing about a Sprint iPhone.

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