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Apple iPhone May Go to T-Mobile Next

NEW YORK ( TheStreet) -- Apple's (AAPL - Get Report) path to U.S. smartphone dominance may take an abrupt detour as the iPhone's next destination may be Deutsche Telekom's (DT) T-Mobile and not Verizon (VZ - Get Report).

AT&T (T - Get Report) will lose its exclusive agreement to sell the iPhone sometime next year and Verizon has been the leading candidate to take on the popular Apple phone next, but Thomas Weisel analyst Doug Reid disputes that assumption.

Reid points the growing division between warring wireless camps. Verizon and Google (GOOG) represent one side with the Motorola (MOT) Droid effort vying against the powerful AT&T and Apple iPhone combo. In that scenario, T-Mobile makes an easy addition to the Apple empire, says Reid.

"Apple wants to move away from exclusivity; T-Mobile would achieve this for Apple in the U.S.," Reid says. Notably, Apple already sells phones through Germany's T-Mobile unit.

The problem, however, is after conquering AT&T, the second largest wireless player, Apple needs a way to reach a bigger block of potential users. With 71 million customers, Verizon is the largest wireless player and one of the last large untapped sales opportunities for Apple. T-Mobile, by contrast, is a big step down with only half as many users as Verizon.

Investors are likely to view a move to T-Mobile next year instead of Verizon as a far less lucrative option for Apple.

Verizon originally rejected Apple's exclusivity offer three years ago over control issues. And instead of trying to mend its relations with Apple, Verizon has spent the past year forging a rival partnership with Google to counter the iPhone offensive.
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