February 10, 2011, 2:43 PM —
The day that some people have waited years for finally arrived. I'm talking about the release of a CDMA iPhone on Verizon, of course. Despite reports of massive new iPhone adoption in the U.S. and stories of people who've been hoping for years that big red would one day join AT&T as an alternative carrier for Apple's handset, there weren't the huge lines this morning at most Verizon and Apple retail stores.
After years of hope, rumors, and speculation about when or if Verizon would get the iPhone, it's easy to be surprised by the apparent lack of interest. After all, every iPhone launch over the past three and half years has prompted long lines at Apple stores worldwide. In some cities, people line up as much as a week before an iPhone release to be the first person to purchase the latest and greatest device Apple has to offer. So, why does the Verizon iPhone launch seem almost like a non-event?
There are several good reasons for this seeming inexplicable phenomenon.
First, many longtime Verizon customers have probably opted for other smartphones, particularly models running Android, as an alternative. There's a good chance that those who had given up waiting for the iPhone are either satisfied with the platform they chose (Android, BlackBerry, or Windows Phone 7) or are still under contract from the purchase of their current phone. It is worth noting that Verizon has not extended early upgrade offers to existing customers in the way that AT&T generally does when a new iPhone is released.
Similarly, anyone planning to switch to Verizon for an iPhone may be in the same boat. That includes existing iPhone users on AT&T as well as anyone on an alternate carrier (most likely Sprint or T-Mobile). As carriers have increased their early termination fees in the past year or so, it becomes much more costly to switch before your contract expires. This could lead to a gradual influx of new customers over the next couple of years.
Like existing Verizon customers, users on Sprint and T-Mobile (or smaller regional carriers) that have waited for the iPhone to become available on a carrier other than AT&T may simply have purchased alternate smartphones that they feel adequately meet their needs. Needless to say, this could be a major downfall of Apple agreeing to give AT&T so much time as the exclusive U.S. carrier.
AT&T has also been offering potential switchers some incentives to stay (although none of these have officially been announced) including a return to unlimited data, free microcells that improve in home reception by offloading calls to a broadband Internet connection, and free mobile to mobile calling. That could easily be enough to sway some users.
Perhaps the biggest issue is that the Verizon iPhone launch is happening in the middle of the iPhone product cycle. It's considered a given fact that Apple will continue its late spring announcement of a new iPhone model to hit shelves early in the summer. Signing a two-year contract to purchase the current iPhone 4 means Verizon customers won't be able to buy the next iPhone (or the one that follows it) when it's released – at least not at a subsidized price (and there's no guarantee Verizon will sell that new iPhone unsubsidized – something that even AT&T has a spotty track record of doing).
While there aren't massive lines today, that doesn't mean that the launch was in any way a failure. After all, Verizon closed pre-orders after less than a day because it had exhausted its expected initial stock and reported the iPhone was, by far, the most successful pre-order product it has ever had. the iPhone on Verizon is clearly a success even if the initial numbers don't match those of other launches.