HEARD ON THE STREET: Apple's Next Carrier Of Choice

22nd Jul 2010 18:46

By Martin Peers A DOW JONES COLUMN At some point soon, Apple (AAPL) needs to anoint another U.S. wireless carrier. Should it opt to make the iPhone available to market leader, Verizon Wireless, or the industry laggard, T-Mobile? It's not a straightforward choice. Yes, with only about 34 million subscribers, T-Mobile is much smaller than Verizon, which boasts 93 million. But Verizon uses a different cellular technology to existing iPhone carrier AT&T (T) and most major carriers overseas, which would require Apple to manufacture a separate version of the iPhone. That will change when carriers switch to 4G over the next couple of years, as Verizon will use the same 4G technology as most other carriers. But right now it's an issue. In contrast, T-Mobile uses the same technology as AT&T. Indeed, some tech-savvy T-Mobile subscribers already use iPhones, although they're restricted to relatively slow Edge service because iPhones don't work on T-Mobile's 3G network. This hurdle may be easier to overcome than that posed by Verizon's network. Given that T-Mobile is losing subscribers, down 77,000 in the first quarter, it may be motivated to offer a heftier subsidy than Verizon. Over the past year Apple has moved away from exclusive carrier deals overseas, offering the iPhone through multiple carriers. That makes the U.S. increasingly an outlier. Research firm Strategy Analytics reported Thursday that while Apple's second-quarter iPhone shipments grew faster than the overall smartphone market, its share gains were slowing. "To grow much beyond the current level in 2011, Apple will need to sign up more carriers" in major countries like the U.S., the firm said. AT&T also said Thursday that only 27% of second-quarter iPhone activations were for customers new to AT&T, down from 35% a year earlier. Apple's growth potential with AT&T is waning. (Martin Peers is deputy editor of the Heard on The Street column. He has been a reporter and editor at The Wall Street Journal since 1999, most recently as deputy media and technology editor. He can be reached at 212-416-2305 or by email at [email protected]) (TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at [email protected]. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.) (END) Dow Jones Newswires July 22, 2010 13:46 ET (17:46 GMT)