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Rumors about the iPhone becoming available on Verizon Wireless are rife, and the carrier may be ready to roll with it. However, the iPhone would need major surgery before it could be carried by Verizon Wireless.
The timing is right for Verizon Wireless to get the iPhone, because it's building out its 4G Long-Term Evolution (LTE) network.
"What's really clogging up the mobile network is users' laptops -- laptop cards or USB dongles or embedded 3G cards," said Godfrey Chua, a research manager at IDC.
"Verizon's initially targeting laptop users with its LTE network and, as it moves them off its 3G network, that frees up its bandwidth so it can take on the iPhone," he told MacNewsWorld.
This approach will likely head off the dropped calls and other bandwidth problems iPhone users have experienced on the AT&T (NYSE: T) network.
"Verizon's upgrading its network and optimizing it to deal with its LTE launch anyway," pointed out Francis Sideco, a principal analyst at iSuppli. "It's already doing a considerable amount, so I don't think there will be too much of an impact on its bandwidth when it gets the iPhone."
AT&T's iPhone Issues
The problems iPhone users faced on AT&T's network were not so much caused by a lack of bandwidth as by the carrier's underestimating how heavily iPhone owners would use the network and how much of their usage would involve bandwidth-intensive applications like streaming audio and video.
The surge in demand has led AT&T to change the way it handles bandwidth issues. For example, instead of just calculating bandwidth usage forecasts based on basic demographics such as age and income levels, it now uses a broader set of customer profiles.
In metropolitan areas with large numbers of college students, it schedules network upgrades outside of the nine-month college academic term, for instance.
AT&T invested about US$18 billion last year to upgrade its wireless and wired networks. This includes implementing HSPA 7.2, a standard that will theoretically double a wireless network's speed.
HSPA stands for "high speed packet access." It increases peak data rates to up to 14 Mbps in the downlink and 5.8 Mbps in the uplink. It also reduces latency and provides up to five times more system capacity in the downlink and up to twice as much system capacity in the uplink.
AT&T plans to spend another $2 billion this year on building out its wireless network, as part of a $19 billion network upgrade plan, spokesperson Mark Siegel told MacNewsWorld.
"We continue to strengthen our network not because of what a competitor might or might not do, but to continue to meet the needs of our customers," he pointed out.
Siegel declined to confirm reports that AT&T has been working closely with Apple (Nasdaq: AAPL) to redesign the iPhone so it deals more efficiently with simple tasks such as finding the closest cell tower or checking for available text messages.
"We work closely with Apple on many fronts, but I just can't comment on the specifics of what we are doing," he said.
AT&T's efforts may not be sufficient to prevent an exodus of users to Verizon Wireless when that carrier gets the iPhone, however.
Moving to Verizon
Switching from AT&T to Verizon Wireless won't be a snap for consumers -- they won't be able to just take their existing iPhones and put them on the Verizon network.
"Apple will need to change its chipsets to EV-DO if they go to Verizon," iSuppli's Sideco pointed out. "That's going to require a complete reworking of the iPhone's architecture, and Apple's going to have to work with Qualcomm (Nasdaq: QCOM), because Qualcomm's the only major company that does EV-DO."
EV-DO, or "evolution-data optimized," is a telecommunications standard for the wireless transmission of data through radio signals. It's typically used for broadband and Internet access. It uses code division multiple access (CDMA) as well as time division multiple access (TDMA). Verizon Wireless is among the many wireless carriers worldwide that use CDMA.
Apple could have signed up with Verizon Wireless at any time but there was no need, Sideco said. "Apple went with HSPA primarily because most of the world uses that technology," he explained. "Whether or not Apple would go to EV-DO was purely a question of looking to see if business conditions were right for the move."
However, he's not completely convinced that Apple will really add Verizon Wireless as a carrier.
There's reason for skepticism -- back in April 2009, Apple chief operating officer Tim Cook said during the company's second quarter financial report that Cupertino had no plans to work with Verizon because it uses CDMA technology.
Why Verizon Loves the iPhone
Verizon chief executive Ivan Seidenberg backed up the statement by Apple's Cook in an interview with The Wall Street Journal the same month.
Apple had never seriously considered making a CDMA version of the iPhone, he said, because it didn't offer a sufficiently wide distribution opportunity.
However, Apple would probably be willing to work with Verizon on its LTE network, Seidenberg suggested.
Verizon Wireless declined to comment. "We don't provide speculative answers to rumors," spokesperson Brenda Boyd Raney told MacNewsWorld.
