In keeping with its three-year tradition, Apple is expected to introduce a new version of the iPhone this summer. But the question of where iPhone 4.0 will land has phone industry analysts and investors up in the air.
deal suggests negotiations are heated.
"This is a more fluid and dynamic situation than people might think," says Michael Cote of consultant firm Cote Collaborative. "It is also a lot less certain that some of the carriers actually think," says Cote, warning that iPhone plans that seem solid today could change.
Current Apple partner
is in the final months of its exclusive iPhone sales contract and it has been expected that No. 1 player
to some of its 80 million customers.
But doubts about the iPhone going to Verizon have been growing. Verizon chief Ivan Seidenberg said in October that the ball was in Apple's court. And analysts have predicted that
Apple enjoys a great deal of negotiation power as AT&T, Verizon,
vie for a shot at the hot-selling iPhone. For telcos, the iPhone is a guaranteed blockbuster that will bring millions of new subscribers onboard.
For Apple, the release of the next iPhone represents a chance at another lucrative revenue sharing agreement and the possibility of taking the phone to a new market with another partner.
Long-time Verizon bear Craig Moffett of Bernstein Research turned less bearish Tuesday raising his rating to neutral on the stock, saying the iPhone risk "favors Verizon."
While far from a whole-hearted embrace of Verizon, the upgrade does point out that
"I wanted to be incredibly careful not to throw my hat into the ring by speculating who might and who might not get the iPhone," Moffett said of his understated praise for Verizon.
Clearly, the big loser in the iPhone race would be AT&T if the phone went to another carrier.
Apple fans wouldn't hesitate to switch service providers to get their hands on the latest version of their beloved phone. AT&T would see a crushing defection of some of its highest paying customers, should they lose the iPhone exclusivity edge.
Verizon has a strong new bond with
over Android phones, and smartphones from
Research In Motion
give Verizon one of its strongest lineups in years.
Verizon could be content to wait until a
, and that could be awhile.
--Reported by Scott Moritz in New York
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