Apple and Verizon consider iPhone deal

ByABC News
April 27, 2009, 7:25 PM

— -- It would mark the first time Apple has produced a version of the iPhone for a CDMA wireless network, which is different from AT&T's GSM technology. Vodafone, co-owner of Verizon Wireless, already sells the iPhone in Europe.

The New York-based telecom entered into "high-level" discussions with Apple management a few months ago, when CEO Steve Jobs was overseeing day-to-day business, these sources say. They declined to be named because they aren't authorized to speak publicly.

Jobs is on medical leave until June, but the conversations are continuing, they say. Apple declined to comment on the specific question of whether it is talking to Verizon. The company provided USA TODAY with a prepared statement, culled from comments to investors by COO Tim Cook last week: "We're very happy with the relationship that we have (with AT&T) and do not have a plan to change it." Cook added that "CDMA doesn't really have a life to it after a point in time."

Verizon is in the process of upgrading its network to a fourth-generation wireless technology known as "LTE." It is possible to build phones that work on both CDMA and LTE networks.

Should Verizon succeed, it would be a big loss for AT&T, says Roger Entner, head of telecom research for Nielsen. "Breaking the (iPhone) exclusivity with AT&T is a huge thing," he says. "That would send shivers into AT&T's stock and senior leadership."

The power of the iPhone was on full display last week, when AT&T reported stellar wireless results. AT&T signed up 1.6 million iPhone customers during the quarter 40% of them new to AT&T. Revenue from mobile data was up almost 40%. Verizon reports results today.