Verizon Announces Different Network, Similar Features on iPhone

Jan. 11, 2011 — -- The anticipation is finally over. Verizon Wireless today announced it will begin selling Apple's iPhone 4 on Feb. 10.

The announcement means Verizon will break the exclusive hold AT&T has had on the device since the its June 2007 launch.

While those loyal to Verizon celebrated the long-awaited option for one of the most popular smart-phones in the world, tech aficionados say some of the features are lacking. There are also some concerns over how millions of new iPhone customers will affect Verizon's network for other users.

AT&T iPhone users have long complained of dropped calls and slowdowns, particularly in major cities.

"AT&T has often implied that heavy data users (a.k.a., iPhone users) are at least partially to blame for the carrier's frequent network outages and slowdowns," wrote Mike Gikas, electronics editor with Consumer Reports.

Verizon has said it has built its network to prepare for the new users.

"We're ready for this launch," said Verizon President and Chief Executive Officer Dan Mead.

AT&T began limiting data usage last summer. iPhone users had previously enjoyed unlimited data plans.

The Verizon iPhone will be similar to the current iPhone 4 but will use Verizon's CDMA technology and 3G network. The phone will allow customers to use their phone to connect up to five wi-fi enabled devices, with its new "Personal Hotspot" feature.

"Today two industry innovators are coming together," Lowell McAdam, president and chief operating officer with Verizon, said to about 200 people in gathered for the announcement at Jazz at Lincoln Center in New York City.

The Verizon iPhone still has a 5 megapixel camera with LED flash and HD video recording as the current iPhone 4.

Users will not be able to talk on the phone while simultaneously using the Internet as they can on current GSM models. Some tech analysts hoped the new iPhone would utilize the faster 4G connection that is becoming available on other networks, such as T-Mobile.

iPhone pricing for Verizon customers is identical to the current models available with AT&T service: $199 for the 16GB model and $299 for the 32GB model with a new two-year contract.

The iPhone 4 will be available at Verizon Wireless stores, Apple stores and the websites of both Verizon and Apple.

Qualified Verizon Wireless customers will be able to pre-order the iPhone online on Feb. 3. Pricing for the data plans were not immediately available.

Analysts Watch for Reception, Antenna Issues

Apple hopes the Verizon agreement will lead to millions of new iPhone users who had feared defecting to AT&T's network. iPhone users in dense, metropolitan areas, including the San Francisco Bay Area and New York City, complained of dropped calls and poor phone reception.

Last year, Consumer Reports conducted a cell phone network quality survey and ranked AT&T last and Verizon first.

Apple faces increasing competition from smart-phones that use Google's Android operating system. Android held 43.6 percent of the smart-phone market, or 9.1 million phones, shipped in the U.S. between July 1 and Sept. 30 last year, according to Canalys, a research firm.

Tim Cook, chief operating officer of Apple, said the companies were not going to publicly forecast sales for the year. Cook shared that a countless number of Verizon customers requested that the phone become available on their network.

"This is just the beginning of a great relationship between Apple and iPhone," said Cook.

Credit Suisse estimated that 1.4 million AT&T subscribers will switch to Verizon and cause flat sales for the year. Verizon Wireless currently has 93 million customers and the largest wireless voice and 3G data network, according to the company.

Consumer analysts are also watching whether the Verizon iPhone 4 will have similar antenna issues as the AT&T phone last year.

Apple said it made changes to the Verizon iPhone antenna to be compatible with the CDMA network.

Paul Reynolds, electronics editor with Consumer Reports, cautions that Verizon users may want to wait for another version of the iPhone in case Apple releases another phone in June, as it has annually since 2007.

"What Verizon iPhone owners right now will be getting is a six-month, middle aged phone," said Reynolds, who said one year is the average life-span of a phone. "Almost certainly, you're locking yourself into a two-year contract before Apple traditionally rolls out its new iPhone."

Other tech analysts had hoped the new iPhone would have a permanent fix to the antenna and utilize a faster network. Technology companies have touted the growing use of the 4G network at the Las Vegas Consumer Electronics Show.

Reynolds said it is too early to say whether the additional iPhone users will slow down the network as AT&T had experienced.

"Particularly in data, Verizon is in a much stronger position than AT&T has been," said Reynolds. "There are reasons to think as Verizon says, they're ready for this. On the other hand, we know iPhone owners are very or a certain number of them are very heavy data users. Some of that is unpredictable. "

Aaron Katersky contributed to this report.