T-Mobile USA To Get iPhone Before Verizon?

Well, some analyst was reported by Thestreet.com that Apple is likely to go with T-Mobile in 2010.  Okay, if you know me, I don't have much use for self-serving analysts but, once in a while, one will come across with an interesting analysis.  And this one, I happen to think is workable for all parties involved.  And trust me.  For me to link to thestreet.com, well, this'll be the last time that happens.  Back to the meat of the matter.

Back in July, I began speculation about possibility of T-Mobile getting the iPhone some time in 2010.  Here's the low-down on why I had thought this was a possible, if somewhat improbable, scenario.  3G and GSM.

In the United States, if you want access to a GSM network, you've got one of two major choices.  ATT and T-Mobile.  As you know, T-Mobile is the smaller of the two.  It's in the 4th place as far as the major networks are concerned, behind Sprint.  As Apple as repeatedly said that there will be no CDMA version of the iPhone.  Conventional wisdom is that Apple will wait until LTE, the next generation wireless network, has sufficient coverage before the iPhone becomes available to Verizon's customers (both ATT and Verizon Wireless will migrate to LTE as their next generation wireless broadband network).

So why T-Mobile?  GSM.  Here and now, by going with T-Mobile, Apple will have access to another 40 million customers in the immediate future.  Plus the 80 million from ATT, that's 120 million native GSM users.  And for folks who for one reason or another want the iPhone but are unwilling to go with ATT, T-Mobile offers a viable alternative.

Just ask the tens of thousands (if not hundreds of thousands) of T-Mobile customers who are currently using unlocked iPhones on T-Mobile's EDGE network.  These folks would rather use their iPhones on T-Mobile's older slower network than put up with ATT's shortcomings.

Not only is this about access to millions of more potential customers like myself but it also means additional pressure will be put on Verizon should there be any future negotiations between it and Apple.  For Apple, it holds all the cards and when it comes time to use them, Steve Jobs knows how to play his hand.

But you ask "what about this hybrid iPhone that everyone's talking about using Qualcomm's chips? The one that allows Apple to sell a version of the iPhone that works on GSM and CDMA networks while also upgradable to LTE access?"  It can happen but insiders don't think the chip will be ready until 2011.  Plus, Qualcomm's public statements seem indicate that it was still knocking at Apple's store and formal talk has yet to commence.

There are still a lot of questions about any deal between Apple and T-Mobile in the US.  One is the weak 3G network.  It was a bit more than a year ago when T-Mobile basically launched part of its 3G network with the release of Android-based G1.  As a G1 user, I can attest to the reliability of the 3G network in CA.  There are dead spots but what network doesn't?

Then there is also the question about Verizon's 80-plus million users.  I'm certain Cupertino would like access to them.  And eventually, that'll happen.  However, today, there is an ongoing public battle between Verizon and ATT over network coverage.  We won't go into that here but last week Apple joined the battle with its own commercial.  The basics of it was that Verizon's CDMA network won't allow users to make a call while surf the Web at the same time.  Ouch.

ATT's 3G network lets folks access the Internet and talk about the same time.  And T-Mobile's 3G network lets users do just that as well.

What about T-Mobile's trip down Google's Android lane?  Well, there was the G1 more than a year ago.  The myTouch earlier this year and, the latest, the Motorola Cliq.  Well, as much as I love my G1, the iPhone is a far superior device than any Android device on the market at this time.  And having Android devices has not turned around T-Mobile's fortune in the US.

Plus, it seems that Google has found a new frenemy:  Verizon.  With Morotorla, Verizon launched the Droid, the newest Android device.  And it appears that Google will continue to work with Verizon to counter the gains that Apple has made in the marketplace.

So, where does that leave T-Mobile?  It doesn't have the Pre like Sprint does and everyone has Blackberries to offer customers.  T-Mobile's place as the Android-first did not matter much.  For all the devices T-Mobile or anyone else offers their customers, they're not iPhones.

So, do T-Mobile really want the iPhone?  Does it want the headache of network congestions?  Have its iPhone users hog up the wireless bandwidth?  You betcha.  And I'm sure if there is going to be any deal, T-Mobile USA's German parent company is also in on it.  There are likely pledges by T-Mobile to spend hundreds of millions of dollars to build and upgrade its existing network.

When Verizon's LTE network is up and running, I'm sure Apple will be happen to bring the iPhone over and gain additional market of an additional 80 million users.  But for now, it's more likely that T-Mobile customers will see the iPhone in 2010 than Verizon's customers.

I've never had a Verizon phone so I can't say first-hand how good its network is and whether it truly offers better coverage than ATT.  I think they're about the same.  Had Apple and Verizon worked out a deal to offer the iPhone on Verizon's CDMA network, I'm sure all the blogs and tech articles will be about how Verizon Wireless' network was being weighed down by the millions of iPhone users while ATT subscribers enjoy an open sky of wireless broadband.

Apple is patient.  It does what it wants when it feels the time is right.  Until Verizon's 4th generation wireless network is up and running efficiently, don't expect the iPhone to be running on Verizon.  And by adding T-Mobile in 2010, it puts added pressure on the rest of the wireless network (just about every mobile platform are on existing networks) and it'll be Apple's to gain.  And in the short run, Apple will have access to T-Mobile's 4th place network of tens of millions of subscribers.

Should Apple Release New iPhones and Updates Faster?

With newcomers seemingly arriving by the week to challenge iPhone for the innovation crown, I am questioning if Apple can afford to update the iPhone merely once a year.

iPhone, since its introduction in 2007, has become an annual event dispite Apple and its carrier partners not saying anything about it.  For its part, Apple has never divulge information for new products prior to launch.  The original iPhone went on sale in the last weekend of June and since then, the iPhone 3G and the follow-up 3GS went on sale around June and July.  So, it's safe to give the iPhone an annual product cycle.

I think Apple fans go to a good scare a year ago when RIM came out with Storm.  Then in the months leading up to the Pre going on sale, many wondered if the iPhone 3G can compete against WebOS’ Synergy, something that the iPhone lacks.

Furthermore, the growing rift, or contrast, between Apple and Google, whether it is manufactured by the media and blogs or not, does highlight the difference in philosophies between these two innovative companies.  While Apple makes no apologies for its walled garden approach, Google’s Android is generally open to developers and handset makers, within limits.

One of the starkest contrast is that the iPhone’s interface is uniform in iPhone 3.0 while Android allows handset makers to graft their own flavor of UI such as HTC’s Sense and Motorola Cliq’s MOTOBLUR.  Oh, and let’s not forget Verizon Wireless' flagship mobile device, Droid.

And while near-term adoption for the iPhone remains positive, the sheer number of new Android devices coming to the market in the next few quarters, and the likely barrage of Window Mobile 7 devices will make the mobile market very crowded.

Thus, should Apple accelerate any product cycle for the iPhone and the Touch?  Apple does have a couple of advantages that has made it difficult for competitors to overcome.  The first is the 100K-strong app store.  It is hard to dismiss the success of the app store with already 2 billion downloads.  That’s something competitors would have a lot of difficulties overcoming.  Still, Android won’t need to match the iPhone app for app.  Even at a quarter or half the size of the iPhone app store, the Android Marketplace would be a success (AM should be closer to 20K apps by now).

While the app store is an advantage competitors can overcome in time, the second advantage the iPhone has will be more difficult to for Apple’s competitors to address.  The iPhone “just works”.  I’ve heard it many times said about the iPhone but never about any other devices.

Right now, I don’t sense any urgency from Cupertino for any need to make any changes to the annual iPhone upgrade schedule.  But I do sense that iPhone's effects on the mobile market and the confusion and desperation it sowed on competitors has waned somewhat.  At the very least, traditional handset makers have gotten used to the fact that the iPhone is here to stay (maybe except for Microsoft's Steve Balmer).

It doesn’t mean that Apple shouldn’t muddle things up a bit again or put more distance between itself and the rest of the market.