Brighthand Bytes

Jul 5 2010   8:07AM GMT

Money Will Bring Apple and Verizon Together

Ed Hardy Ed Hardy Profile: Ed Hardy

Easily the biggest open question in the phone business these days is, Will Verizon offer a version of the iPhone?

There have been quite a few unconfirmed reports indicating that a version of the iPhone for Verizon is in the offing, with the latest saying it’s going to happen in January 2011.

But quite a few people continue to have doubts. They point out that Apple and Verizon both insist on controlling every facet of their businesses, a pair of corporate attitudes that won’t easily lead to cooperation. Apple has almost total control of AT&T’s version of the iPhone, including handling technical support and deciding when upgrades are sent to users. According to conventional wisdom, that situation would be anathema to Verizon.

Unconfirmed reports say that Verizon passed on the opportunity to be the exclusive provider of the iPhone back in 2006, forcing Apple to go to AT&T. The reason: Apple wanted the same deal it talked AT&T into, and Verizon wasn’t going for it.

Money Changes Everything
To me there are billions of reasons why these two should find a way to cooperate, and each one of them has a dollar sign on it. There’s just too much money to be made for them to shut the door on cooperating.

And I’m not exaggerating, there’s really a billion or more dollars riding on the negotiations between Apple and Verizon. That money is going to be spent by mobile phone users somewhere, and it’s going to these companies’ competitors if they can’t come to an agreement.

Millions of Verizon’s subscribers want an iPhone, but they’ve read the reports of problems with AT&T’s wireless network (justified or not), and they aren’t giving up the network that has worked for them, not even for the iPhone. These are the people that Apple is missing out on.

On the other side of the coin, according to analysts’ estimates, there are a million AT&T subscribers who would like to switch to Verizon if they could stay with Apple. If Verizon is going to take in $70 a month or more from each and every one of these people, it’s going to have to bend its stiff neck a bit.

A it is, many of these Verizon customers, unable to get an iPhone, are getting an Android OS model instead. So Apple’s loss is HTC’s and Motorola’s gain.

The biggest problem is that both Verizon and Apple have been successful by insisting on control of their products. Verizon is the biggest wireless carrier in the United States, and while Apple is consistently a very profitable company.

Has Been Done. Must Be Done. Will Be Done.
There’s no doubt, both Verizon and Apple are control freaks, so it’s easy to say that they aren’t ever going to get along. But for many decades companies that have conflicting corporate cultures have found ways around their differences if there’s enough money to be made.

If you’ll forgive the anthropomorphism, Microsoft and Apple hate each other’s guts, but Microsoft has made a version of Office for Macs since 1985. These two have worked through their differences for 25 years because it’s in the interest of both to do so.

If Apple and Microsoft can cooperate for so long, I believe Apple and Verizon can too, especially with so much money on the line. They aren’t even in direct competition. And an agreement would be a huge economic win for them both, bringing in billions.

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