by Bruce Tyson

Created on: April 01, 2010

It’s the news that sent Apple’s stocks to all time highs and devastated AT&T’s market price: iPhone is coming to Verizon. This news revolutionizes the smart phone landscape and throws AT&T’s very existence into question. Since its inception, iPhone has meant that users had to be chained to AT&T as their service provider regardless of the quality of service or the price of their plans. In fact, AT&T’s exclusive agreement with Apple to sell and service iPhone propelled it to a position in the mobile market where they have been nipping at number one Verizon’s heels. All that may be over.

From Investor’s Business Daily to Time magazine, to newspapers around the world, the news has been spreading like wildfire that finally there is choice when it comes to network service for iPhone.

It was Apple’s move

Even though iPhone has become the overwhelming majority of AT&T’s business, Apple has been seeing its market share erode with the introduction of Android-based smart phones and has felt pressure from its shareholders to take action. While the company is warding off competitors like HTC’s Android-based patent infringement lawsuits, it has to find ways to sell more iPhones. The only sensible way to do this is to make it available on the nation’s number one mobile network. After all, many people still want to have an iPhone: they just don’t want to go with AT&T.

The move to a multi-carrier based model is not surprising: for many it has been a “when”, not “if” question anyway. After all, the long anticipated iPad tablet PC is being produced to natively support multiple carriers. Of course, this means that AT&T can no longer expect an iPad related windfall.

Consumers are the winners

While Apple wins with the Verizon iPhone, AT&T loses. Consumers, however, are also winners: they will now have a choice between AT&T and Verizon if they want to have an iPhone. This means that both companies will have to work hard to offer the best services, the best service plans, and the best prices. This is going to reinvigorate iPhone that – together with the next generation iPhone HD – will help consolidate its market share against Android phones and Blackberries (incidentally, RIM, the maker of Blackberry, is taking a massive hit in the stock market on the news of the Verizon iPhone). Although the impending loss of an exclusive product portends poorly for AT&T, it’s not the end. We will get to see AT&T live to see another day and in the end, they will likely benefit from Apple’s move as well.

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