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iPhone Exclusivity: Point-Counterpoint

The debate over whether Apple should keep its exclusive iPhone deal with AT&T is reaching a fever pitch this week.

A Wall Street analyst stepped into the fray, saying Apple is likely to drop the exclusive agreement and give Verizon subscribers the opportunity to pick up the popular smartphone. At first glance, that would be costly for the computer giant, which reportedly receives $450 from AT&T for each and every iPhone it sells. But sheer volume could make up the difference. Verizon, which has more postpaid subscribers than does AT&T, is expected to pay Apple about $300 per sale.

The analyst, Broadpoint AmTech’s Brian Marshall, says support from diverse carriers is essential to the iPhone’s global success. He expects Verizon will get the iPhone sometime in the second half of next year.

Before cooperating with multiple carriers in the U.S., Apple will be branching out the iPhone to multiple carriers in Canada and the U.K. For example, TELUS and Bell will break Rogers’ stranglehold on the 3G S next week in Canada.

But not so fast, my friend. Another analyst says Verizon won’t be getting the iPhone anytime soon. The reasons are the wireless technology and Apple’s corporate philosophy.

Avi Greengart of Current Analysis says without a wireless technical standard, there are too many different technologies out there. Since AT&T’s GSM/HSPA network and Verizon’s CDMA/EV-DO network aren’t currently compatible, Apple would need to build another version of the iPhone. Greengart says Apple is unlikely to make that move because it would only result in short-term gains.

The analyst goes on to say that it’s not Apple’s philosophy to build out additional hardware platforms. It would rather spend its time improving the software.


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