Why Verizon’s decision to pass on the iPhone six years ago is looking better and better
Soon AT&T’s exclusive contract with Apple for the iPhone will come to an end. Tomorrow, Verizon is widely expected to announce that it will become the second U.S. carrier to offer the iPhone, at a big press conference at Lincoln Center in Manhattan. (Even if Verizon has, for some strange reason, decided to punk the press and does not make the announcement tomorrow, it has confirmed that it will be offering the product at some point in the near future.)
Any way you look at it, that is great news for Verizon (it gets to compete for the iPhone market!) and bad news for AT&T (it has to compete for the iPhone market!). And with Verizon finally getting on the iPhone action, it’s time for a reassessment of its fateful decision six years ago to pass on the Apple product: Was saying no really such a bad thing for Verizon? With the benefit of hindsight—and the prospect of a Verizon iPhone on the horizon—the decision hardly seems as horrible as it once did. There is a silver lining to that five-year-old, earnings-dulling gray cloud.
Most importantly, when AT&T threw its lot in with Apple, it really threw its lot in with Apple. The company offers a broad range of smartphones, but has nevertheless developed a wireless business dependent on the iPhone for both sales and margin. As noted above, most of AT&T’s new smartphone customers come not just for the company’s service, but for Apple’s product. With that product now available elsewhere, if Verizon offers better or cheaper plans or service, AT&T’s customers might abandon it.
