Apple, Verizon Cited as Disagreeing Over Pricing Terms for 2010 iPhone

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Date: Wednesday, January 6th, 2010, 06:34
Category: iPhone

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With rumors of Apple and wireless carrier flying that the two companies are in negotiations over a summer 2010 CDMA iPhone launch, Verizon is apparently angry with Apple over pricing structures.

According to AppleInsider, in a new note to investors Tuesday morning, Maynard J. Um of UBS Investment Research said that a new iPhone is expected to launch in mid-2010. Whether that phone would be available for Verizon’s CDMA network remains to be seen.

“We believe a CDMA-iPhone is also in the works,” Um wrote, “though believe Verizon Wireless and Apple may currently be apart on pricing.”

Um also stated that even if Apple and Verizon can’t arrive at terms, a CDMA iPhone is a possibility in 2010, as China and Japan include carriers which operate on CDMA networks.

Last fall, conflicting reports within chip maker Qualcomm suggested a Verizon-capable iPhone could arrive in mid 2010. Whether that handset would be a dual-mode world phone, or a Verizon-only CDMA model was disputed.

Though Qualcomm plans to release dual-carrier chips that would allow future phones to work on CDMA/EVDO carriers such as Verizon and Sprint, as well as rival 3GPP carriers using UMTS/HSPA+ technologies like AT&T and T-Mobile, those chips will not arrive until the second half of 2010. Some have said that timeframe would not allow Apple to release a dual-mode phone until 2011 at the earliest.

And others believe a Verizon iPhone deal is more wishful thinking than anything else. Given that both companies tend to be focused on consumer control, analyst Shaw Wu of Kaufman Brothers has predicted that the conflicting interests of the two companies would get in the way of an agreement.

Currently, it is estimated that Apple gets a favorable US$700 average selling price per iPhone, subsidized through exclusive carrier AT&T. Compare that with the ASP of the Motorola Droid, exclusive to Verizon, which costs an estimated US$450 per sale.

Stay tuned for additional details as they become available and if you have your own two cents on this, we’d love to hear them.

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