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Although everyone seems to be calling it "the Verizon iPhone", the
simple truth is that the new CMDA iPhone 4 introduced on Tuesday will
not be a Verizon exclusive - no more than the iPhone was an AT&T
exclusive until now.
The iPhone was exclusive to AT&T in the US market, and it's very
possible that it will be exclusive to Verizon in the US, but there's
also a huge market for a CDMA iPhone in other parts of the world.
Analysts are already predicting that the "Verizon" iPhone will be
available to China Telecom and India's Reliance Communications.
Verizon is the biggest wireless carrier in the US, with Wikipedia currently
reporting 93.2 million subscribers (just 400,000 ahead of AT&T).
The CDMA iPhone will help Verizon hold on to subscribers who might
otherwise have switched to AT&T for the iPhone, and it will also be
a magnet for those using other services as well as disaffected AT&T
users. It's not unrealistic that Verizon Wireless could have 8-10
million iPhone users within a year - and perhaps a lot more.
China Telecom holds third place among wireless carriers in the
world's most populous nation. According to Wikipedia, it has 43
million wireless customers. Adding 4-6 million iPhone users within a
year isn't unrealistic.
Reliance Communications claims to
have 56 million CDMA subscribers, which is potentially 5-8 million
iPhones.
Around the world, there are dozens (perhaps hundreds) of wireless
carriers still using CDMA, so it's feasible that Apple could sell 20
million CDMA iPhones in 2011.
Competitive Rates
Macworld has examined current voice, messaging, and data rates from
Verizon and AT&T and made some interesting discoveries:
Individual voice plans offer exactly the same packages at exactly
the same prices.
AT&T has a lowball $60 550 minute family voice plan, while
Verizon has a top-end 2,000 minute family voice plan for $100. The the
700 and 1,400 minute levels, rates are identical.
Messaging plans start at $5, which gives you 200 texts on AT&T
or 250 on Verizon. Verizon doubles that for $10, while AT&T offers
1,500 texts for $15. For $20, Verizon gives you 5,000 messages per
month, but AT&T has unlimited individual messaging at the same
price. Both have unlimited family messaging for $30.
Data plans start at $15, which gives you 150 MB on Verizon or 200
MB on AT&T. AT&T offers 2 GB for $25 with no unlimited option,
while Verizon has a $30/month unlimited plan.
Cheapest Plans
For an individual user, we're looking at $40 for voice, $5 for basic
messaging (6-8 per day), and $15 for data, for a grand total of $60.
Both offer unlimited mobile-to-mobile calling within their network.
With the $10 texting plan, Verizon users also have unlimited texting to
other Verizon Wireless users.
On the family side, you can get started with AT&T for $80, $10
less than Verizon - but for less minutes as well. With free mobile
calls within each network, you might find the low-end plans
adequate.
Midrange Plans
900 minutes should be plenty for most individual users. That's $60
from either carrier. 200 to 250 texts a month is enough for some, but
most users will feel more comfortable with a lot more than that.
Verizon's $10 500 message package might be enough; AT&T subscribers
will have to jump to 1,500 texts for $15. This gives Verizon a $5 price
advantage for midrange users.
Do note that Verizon subscribers with a texting plan for 500 or more
messages get unlimited texting within the Verizon network. If AT&T
has a similar program, I can't find it.
Looking at family plans, 700 minutes is probably adequate for 2-3
users. $70 a month whether you choose AT&T or Verizon. 500 texts is
probably inadequate for a family plan, which means Verizon user will
jump to the $20 5,000 message plan. 1,500 text for $15 from AT&T
should suffice for most, giving AT&T a $5 edge here.
For more family users, say four or five, 1,400 minutes makes more
sense, which boosts us to $90, and as that likely includes some teens,
the family unlimited option is probably your best bet - $30 from either
carrier, although if most of your texts are to Verizon users, Verizon's
unlimited in-network messaging could make the $20 5,000 message package
a real option.
Families might be able to save $10 with Verizon if they don't do
excessive out-of-network texting.
It's very difficult to predict data usage, but if you have 3 to 5
users, the top-end data packages probably make the most sense - $25 for
2 GB through AT&T or $30 for unlimited though Verizon. In the end,
a Verizon family opting for the 5,000 message package and unlimited
data is $5 ahead of AT&T with unlimited messaging and a 2 GB data
package.
The Top End
Both carriers have unlimited individual calling for $70. AT&T
offers unlimited texting for $20 and 2 GB of data for $25, bringing our
total to $115. With Verizon, unlimited texting adds $30 and unlimited
data $30, which gives us a total of $130 per month.
As for family plans, Verizon has unlimited talk for $120, as does
AT&T. Unlimited family texting adds $30, keeping things
neck-and-neck. The big question is whether you'll use more than 2 GB of
data per month. If so, you have a $5 advantage with AT&T. If you
need more than that, spend the extra $5 for Verizon.
Intangibles
We're not looking at coverage maps, G3 speed, customer service, or
reliability here. All we're looking at is the bottom line cost of
service.
Coverage maps don't tell you how good coverage is in your home or
workplace or while driving between point A and point B. They give a
good general picture, but you may find yourself unable to make or
receive phone calls or text messages in the mall or at a friend's
house. Check with people you know to see what real world coverage is
like in the places you frequent.
Faster G3 is better than slower G3, but any G3 is better than no G3,
which is the crux of the AT&T vs. Verizon network argument. Each
side has merit, but living in a state with lots of wide open expanses,
I'd lean toward broader coverage.
Verizon has it all over AT&T when it comes to reliability and
customer service, but on the flip side, if you buy a CDMA iPhone, you
won't be able to talk and use the Internet at the same time. At
present, CDMA is strictly voice or data, not both at the same time -
although that's expected to change in the coming year.
One AT&T Advantage
One thing we haven't looked at: AT&T offers the 8 GB iPhone 3GS
for $49, but there's no CDMA version. If you can get by with 8 GB of
storage, you can save $150 by choosing the iPhone 3GS. Until the next
generation iPhone ships in late June or so, that's a real advantage for
AT&T.
Verizon has a short-term advantage in that its iPhone 4 will be able
to work as a shared WiFi access point immediately. On the AT&T side,
expect it later this year.
Perfect Timing
The availability of a CDMA iPhone couldn't come at a better time.
Now that Android has squeezed past iPhone - primarily because Verizon
could sell Android phones but not an iPhone - it's going to be
interesting to see what happens when America's largest wireless carrier
has the iPhone.
I expect to see a real dip in Android sales in January, February,
and possibly into March as potential buyers wait for the CDMA iPhone.
After that, all bets are off.
Better Off Waiting
Frankly, 4G is the wave of the future, and the iPhone 4 doesn't yet
support it. (This could be one reason Android is gaining traction, as
4G is available in several metropolitan areas.) My gut feeling is that
the next generation iPhone will have 4G, since both Verizon and
AT&T are busy deploying it in more and more areas.
If you buy a CDMA iPhone now, you may kick yourself when 4G service
comes to your neighborhood, because you probably won't be able to
upgrade to a 4G iPhone until you've been under contract for 1-1/2 to 2
years.
I've been a Verizon user since Alltel was merged into it, and as
tempting as the iPhone is, I'm going to hold off. If I can keep using
my current mobile phone until June 15, I will be free and clear to
change carriers without any early termination fees - and the next
generation iPhone should be available shortly after that.
Not that I plan on buying one, but the possibility of eventually
doing so is going to be a factor in whether I stick with Verizon or
switch to AT&T.
Dan Knight has been using Macs since 1986,
sold Macs for several years, supported them for many more years, and
has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.
Links for the Day
Mac of the Day: Blue & White Power Mac G3, introduced 1999.01.05. The most colorful Power Mac introduced an innovative 'drawbridge' enclosure.
