Its official, Verizon announces it will begin selling iPhones in early February. COO Tim Cook of Apple was on-hand for the announcement, joined by Verizon Wireless CEO Dan Mead.
Verizon, the nation’s largest cell phone company announced Tuesday, that the Apple iPhone will soon be available to its customers. It will be the first time the iPhone becomes available to people not tied to AT&T for their mobile service.
February 10, 2011 everyone can buy the iPhone online and in-store with pre-orders beginning February 3. Pricing for the Verizon iPhone models begin at $199 for the 16 GB and $299 for the 32 GB models. Both have two-year contracts built-in with no announcement at this time on the service plan prices.
The press conference took place in New York City’s Lincoln Center at 11 a.m. est., across the country from the Bay Area and Silicone Valley where Apple has typically staged major product announcements. This one is different in that it is being spearheaded by Verizon, so the announcement focused on the service plans available for Verizon’s future iPhone uses, the speed of the company’s network and when the phones will be available to customers.
AT&T has been criticized for not having the infrastructure to handle all the network space required for the large number of iPhone users. Ending the exclusive arrangement with AT&T, will mean Apple fans devoted to their iPhones have another option and could potentially impact the price of the phones and data plans offered by AT&T.
Verizon selling iPhone’s may be good for consumers, but not so good for investors. Verizon pays Apple a subsidy up to $400 per phone and expects $5-13 million in sales. Impacting earnings 15-20 centers per share.
The announcement is certainly good news for Apple, which will now have an easier time persuading a completely new group to switch to the popular iPhone. Ninety percent of Americans already own a cell phone, so continued market growth is limited for phone companies and carriers.
“I think AT&T is going to get demolished,” said Brian Marshall, an analysis who covers Apple for Gleacher & Co.
Investors are predicting a tough year for AT&T as it loses its exclusive deal with Apple to sell the iPhone. AT&T’s stock was down 1.8 percent Monday just ahead of Verizon’s expected Tuesday announcement.
Analysts expect AT&T and Verizon to exchange jabs and ad campaigns. Mark Siegel, an AT&T spokesman, stated those using iPhone on the Verizon network can get ready for a slow network. While Verizon’s representative Jeffrey Nelson referenced AT&T’s history of network problems by stating the company is known for not having the best network.
At the event, Tim Cook, Apple’s chief operating officer, said “Verizon Wireless customers have told us they can’t wait to get their hands on iPhone 4, and we think they are going to love it.”
With Verizon’s 4G network in the works, executives at the announcement were excited about the capacity and quality that will make iPhone a success.