Verizon-Android: Rotten deal for Apple and its iPhone
Filed under: Company News, Technology, Investing, Google , Apple, Verizon
Verizon (VZ) will sell handsets powered by Google's Android very soon -- and that can't be good for iPhone maker Apple (AAPL). The wireless carrier and the search giant announced a tie-up on Tuesday that was short on details. My colleague Sam Gustin interpreted the deal as a frontal assault on Apple by Verizon. I think he's basically right and want to elaborate a bit on the logic.When Verizon and Google (GOOG) decide to work together, it's hard not to speculate on what this might mean for Apple and its iPhone. After all, Verizon has long been rumored to have a deal in the works with Apple. Reports have bubbled all summer and fall that Apple, disenchanted with AT&T's (T) network performance for mobile Web surfing, will drop the exclusive iPhone distribution deal it has with Ma Bell.
Google, on the other hand, has been a slow starter in the mobile handset software space with scant numbers of smartphones powered by the search engine's Android software hitting the market. But Google appears set to ramp up its presence in smartphones with more than a dozen new Android-powered models slated to hit the market over the next 10 months.
Google insiders have told DailyFInance that they see a big uptick in Android market share coming later this year as the new models land. The upshot for the iPhone? Verizon sure is taking its time and the longer the wait, the worse the deal for Apple.
On top of that, with more devices coming on line for Android, the Android applications market will become more attractive to developers. They will build more apps, which will mean Android looks better to phone buyers and a feedback loop will develop.
To be sure, the deal was very low on specifics. Verizon did state that it planned to sell Android-powered phones pre-loaded with applications from both parties. Those phones would hit the market in a few weeks, according to the Associated Press. As Tom Kratzil at CNET points out, it's unclear whether this deal will also extend to netbooks. Android is slated to enter that market, as well, and possibly will do so ahead of Apple's much anticipated netbook/media tablet (as seen in this post in a leaked image at our sister blog, Engadger).
But it's clear what is taking place here. Remember that giant battle for the soul of the mobile Web I blogged about two months ago? The battle lines are starting to be clearly drawn. Having seen what happened to AT&T as it became beholden to Apple for new customers, Verizon wants to create a more symbiotic relationship and maintain some control over the "deck." That's the term for the user interface on a phone and Apple has complete deck control on the iPhone. For its part, Google needs Verizon if it wants Android to spread and prosper.
The two giants need each other to drive customers to this novel platform -- and both of them likely want to prevent Apple from further extending its wildly successful iPhone franchise (and the creeping control of the future of the mobile Web that comes with it). So for Mac fans hoping to get Verizon's strong 3G network with an iPhone attached, don't hold your breath.
Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at alex@dailyfinance.com.
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Reader Comments (Page 1 of 1)
10-07-2009 @ 9:41AM
jeff said...
Truth is most APPLE users have APPLE SAUCE for brains!! APPLE computers are twice the price for half the power of a PC but APPLE users pay to be COOL. The I-phone has COOL apps but will not work as a wireless internet for your computer or even use stereo wireless headphones for you to listen to your music with! Not to mention the memory is built in not a removable stick and Itunes or some other APP is always trying to get you to buy something!! Apple heads pay to be yuppie cool and get little in return!! If phone companies would go Japanese and stop filling their phones with useless programs and sales pitches and allow developers to use a different format like in Japan then most phones would put the APPLE phones in the garbage!!
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10-07-2009 @ 4:54PM
LuvnMom said...
You say that Apple users pay for more than what it is worth? How many viruses have you gotten on your windowns PC? The Apple products are not crappy and worth every penny. The IPhone may have some apps that are useless and I'm sure that the Google Interface will do very well but don't knock all the Apple products unless you know what you are talking about!
10-07-2009 @ 6:43PM
Jeffsters said...
Jeff,
There are enough issues with Apple without resorting to name calling or making false facts up such as 2X the price of a comparable name brand PC!
I just went to Apple and Dell's web site and took a low end 15" Mac Book Pro and priced it against a comparable Dell.
Latitude E5500
PROCESSOR Intel® Core™ 2 Duo P8700 (2.53GHz, 3M L2 Cache, 1066MHz FSB)
OPERATING SYSTEM Genuine Windows Vista® Business SP1, With media edit
LCD PANEL 15.4 inch Wide Screen WXGA+ Anti-glare LCD Panel edit
WARRANTY & SERVICE 1 Year Basic Limited Warranty
MEMORY 4.0GB, DDR2-800 SDRAM, 2 DIMMS
PRIMARY STORAGE 250GB Hard Drive, 5400RPM
OPTICAL DRIVE 8X DVD+/-RW w/Roxio and Cyberlink PowerDVD™
WI-FI WIRELESS CARD Dell Wireless™ 1510 802.11a/g/n draft Mini Card
BLUETOOTH WIRELESS Dell Wireless® 370 Bluetooth Module
ACCESSORIES AND BUNDLES
Quickcam pro 9000 - that's what they offered
ALSO INCLUDED WITH YOUR SYSTEM
VIDEO CARD Mobile Intel® Graphics Media Accelerator 4500MHD
The Apple price for a STOCK Mac meeting these specs: $1,699.00
The Apple however has a built-in camera and NVIDIA GeForce 9400M graphics, iLife, and a far nicer kit overall.
The Dell price in comparison: $1,422!
By the way, I would also get Norton on the PC and a subscription to their AntiVirus software!!! Guess what the price is then...oops! $1,541 !!!!!
Carry on Jeff!
10-07-2009 @ 10:33PM
Typical Engadget Tech-Nerd said...
You're dreaming. There is no Windows PC that has twice the power for half the price of a Mac. It's true that you can get very cheap Windows PCs, but most of them are garbage that will be falling apart after a year's use. I'm sure a skilled person could build a Windows PC that would be cheaper and better than a Mac, but how many people can do that.
HP and Dell are soon to be out of consumer PC business because all the Windows cheapsters are buying netbooks which are the bottom feeders of the computer industry. HP and Dell are bleeding cash because all their higher quality computers are just sitting on dealer's shelves collecting dust because Windows buyers confuse cheap with good value and buy the crappiest spec'ed computers they can get their tightwad mitts on.
10-16-2009 @ 9:49AM
frodo said...
all i here is that the iphone is to expensive blah blah they have stupid apps you have to pay for macs are to expensive i've had pc's in the past nothing but problems boarding and out dated heavy and slow. why do you think mac has made such a big jump with there products in the last 5 years cause they got tired of the same complaints people like you have with pc's so they change the computer world with there products.... have you people ever used a mac? piont blank it's fun simple easy and safe. what else do you want in a product? wait let me guess something cheap slow heavy have to search threw multiple files and folders to find what you need.. it's brilliant what there doing at apple absolutely amazing they've change the game to make it easy, better fun and exciting. and oh there expensive well let me tell you something you get what you pay for in this day in age.. The iphone what you people don't get is thats it's not just a phone it's much more it's what you want and need in a device it's an engineering masterpiece the first of it's kind some many copy cats nithung can compare to it nothing they keep trying but nothing just like there mac books the iphone is fun, sleek thin light wait great screen great power there's nothing like it the app store great achievement for apple.. and then you can jailbreak it. make it even better more fun and interesting more appealing.. basically make the product how you see it, you want it.. it's not just a phone it's something else it's you and your own special phone. to make your life with a cell phone different and easier. thats all so try it make it yours make it an iphone. watch out for the new iphone next year faster, cheaper, more reliable more apps, more sales, more iphones more customers more funnnnnn..
10-07-2009 @ 5:23PM
HS said...
A rotten deal? speak for yourself, I love my iphone and will never change platforms, android will probably just replace symbian. Think about it, would you rather drive a BMW (apple) or a KIA (android)
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10-07-2009 @ 12:47PM
L R said...
Look in the *Rearview* mirror. Is that an M way off in the distance or is it an S.**
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10-07-2009 @ 1:20PM
Bob said...
2 members of the board for Apple also sit on the board for Google.
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10-07-2009 @ 1:33PM
L R said...
Google is a force to be reckoned with. They have the uncanny ability to make sound business decisions. This is a tough attribute to defeat.
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10-07-2009 @ 2:54PM
A C M said...
Those pretentious posers had better be afraid.
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10-17-2009 @ 11:49PM
Jason said...
It simply amazes me how appleheads can only rely on how the mac doesnt get viruses like a pc does....did you ever stop to think of why that is.....hmmmm....maybe due to the fact the millions more own a pc over a mac...pcs are far cheaper and guess what...I run an anti-virus program so therefore I dont get viruses. Hey dont get me wrong i think apple makes a great product but i will buy a pc for a few hundred and a anti-virus program for $60 before I spend a few thousand for a underpowered mac that you will have to spend hundreds more to upgrade to match the power of my pc
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10-07-2009 @ 6:44PM
Jeffsters said...
Verizon's network looks nice until you throw 10 million iPhones on it with users that exploit the network more than any other phone, then let's talk! As someone that was with Verizon I love how the press ignores how Verizon cripples phones, demands to control the user experience, advertises a low rate then nickel and dimes users with things like V-cast. It's a scam! If you think for a minute they would allow something like over the air MobileMe I have a bridge to sell ya! What I think is behind this whole thing is you have two companies that jealously guard the user experience and Verizon counts on controlling that to make extra money. Unless Apple caves, fat chance, or Verizon caves, fat chance, I don't think we'll see the iPhone on Verizon anytime soon. I think this Android move is indicative of that and admission of that fact.
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10-07-2009 @ 10:22PM
Typical Engadget Tech-Nerd said...
What are those Verizon bassturds beefing about. Apple went to them with the iPhone before they went to AT&T, but those narrow-minded fools didn't want the iPhone. Too arrogant for their own good. Apple should punish the crap out of them or make them beg on their knees to grab some exclusive Apple product.
I hope their Android venture is a big flop. If only AT&T could only expand their networks faster, but that sure isn't likely to happen. AT&T needs some sort of bandwidth compression technology that could accomodate 4X the amount of iPhones and then they could just squeeze the life out of Verizon.
Maybe Apple should just spend some of their money building out 4G with AT&T if AT&T can't afford to go it alone.
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10-11-2009 @ 5:57AM
Jeremy said...
Android's great weakness is it's user experience. Where is Google's commitment to useability? All i hear from them is how "open" the platform is.
How will you have a consistent user experience when you have it running on wildly different hardware? How will programmers get the most out of the platform when they have to program for the lowest common hardware platform to reach the most users? Imagine the bug testing that will need to go on for each and every Android phone released for your program.
Where's the modern SDK? It's Java ME for gods sake.
Google seems to think it can recreate Microsoft's one trick pony by licensing Android and forgetting about the hardware. The world has moved on. Apple has shown that control over both the hardware and software produces the best user experience. First with the Mac, then iPod and now the iPhone. The world has seen what happens when you design by committee, it's called Windows and the PC. How's that going for Microsoft? (profits down) Dell? (closing down)
People really don't get this. They think if you get your software from here, your hardware from there and then try and bundle it together it'll work well. Good design is about controlling all the factors, not outsourcing everything and expecting it to work when you put it together. Without good design you can't have a good user experience.
All i hear from bloggers is "when the new Android phones come out they'll beat the iPhone", "partnering with Verizon will cut out the market for iPhone". New hardware won't make a bit of difference, a new carrier won't either. To beat the iPhone you need to have the same or better experience of using one. You only get that from having control over the whole widget. Google will be stuck with hardware that other people make and the hardware people will be stuck with trying to get Google to support their hardware, or hope some programmer gets interested enough in it to write software for it. Or they hire some programmers to try and plug it into Android. Then they have to install a custom version of Android on their phone, then keep it up to date when Google updates Android. Then keep it compatible with all the apps. That sounds like fun ;) Customer's Android phone crashes when they update it, who do they call? The hardware people or Google? Something goes wrong with your PC who do you call? Is it fun?
The iPhone? Apple wants to add a compass, they add support for it in OSX. Add it to the SDK as well. Job done. Apple wants to add some really odd hardware to the next iPhone? They tell the software guys, job done. Updates? Support? Call Apple, they know exactly what hardware is running what. They only have to support a limited number of combinations of software and hardware, much easier job.
You get my point?
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10-09-2009 @ 8:34PM
arlo said...
comment #2:
I have had "0" viruses on my computer. An apple is just a succeptable to mal-ware and trojans from downloaded content.
Comment #4:
My PC runs a Ti7 intel processor with 24gb ram, 1gb grahics card and 2tb of dual hard disk capacity and cost me $3,200 and some change. Thats including two 24" HD monitors. An equivalent MAC would have cost me almost $8,000. I guess there's a $5,800 difference to be cool. Don't get me wrong, apple makes good products, but it's not worth the investment in my book.
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10-14-2009 @ 10:35AM
Josh Owens said...
Weird, cause I just built a Mac Pro with 2 x Quad-Xeons, 8 GB DDR3, 2 x 512MB graphics cards, and 1TB hard drive for $3650. Then I went to Newegg and added 3 more 1TB hard drives (for a total of 4TB), 16GB more DDR3 (for a total of 24GB), and 2 x 24" HD monitors. Grand total=$5130. Granted, that is still a lot more than your i7 based system, and if your running windows 7, it might even be faster, but it definitely didn't cost $8000.
For me, when it comes to desktops, I don't think the Mac Pros are worth the price premium, but when it comes to laptops, Mac prices are very competitive when you compare truly equal hardware setups.
Now my biggest question is, what does all of this have to do with Android phones with Verizon or the iPhone? If Google and Verizon can come up with an app store that comes even close to the itunes store, then I will be sold.
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10-24-2009 @ 11:07PM
Kevin said...
As long as there are choices, there will be opinions. If this post was called "white or black, which shade is better?" you would get people saying that white is better because it is cooler in the sunlight. Others would say that black is better because it hides better in the dark. Both are valid points to two completely different situations. Bashing others opinions in my opinion should end socially around the transition from junior high to high school but I can see there are some late bloomers in the world. Anyway, my point is, not everybody has the same needs for their mobile phones. Here's how I feel (and this is only an opinion of mine). I have Verizon. I have had them for years and almost everyone I know also uses Verizon and that definitely makes it my #1 reason to stay on it since I moved across the country from all of my friends and family. That leads me to my #2 reason for staying with Verizon. I moved out into the country where other providers are really bad at having any signal at all, even my Verizon craps out from time to time. Now about phones/smartphones. I have a different feeling about Verizon. I really wished they offered the iPhone, because Verizon offers a warranty coverage on ALL of their phones. There might be a deductable on top of the monthly charge for the warranty, but it still costs less than a screen repair on an iPhone and I can get it all taken care of in the Verizon Store in one visit.
Now, I am the type of person who wants a lot of gadgets and gizmos on my phone and options on my cars but I also do not like to mess with stuff. I would never hack a phone to get it to do something another phone does. I would prefer to just get that other phone that will do what I wanted the first phone to do with the warranty that it will do it. If I wanted a fast car, I would opt for the v8 instead of getting the v6 with hopes of putting an aftermarket supercharger or turbos on it in the future. That being said, the iPhone does most everything I would like. But, and it's a big but, there are things about the iPhone that drive me nuts. Starting with AT&T. Not my preferred carrier. Extra battery? Yeah, no. Memory expansion slot? Not gonna happen. Works better with a PC? Don't know, but if it is anything like my iPod, I would be screwed there too! Apple makes a great phone, and if I had a Mac, lived under an AT&T Cellular Tower in a 3G city, and stayed in a soft, rubber room to resist drop damage, then the iPhone would be my choice. Since that is not my situation, I just hope Verizon gives us something iPhone-like, but with the good perks that Verizon offers and none of the phone crippling ones!
That all being said, Verizon needs the iPhone or something real close (Android, Omnia 2) or this ship jumping to AT&T will become a pandemic that could lead to Verizon's long term failure. Just think, there was a time when the US big three automakers arrogantly laughed at the thought of Toyota being a threat to their American dominated world market.
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10-27-2009 @ 9:42PM
Jeff what said...
Wait.. so you are justifying AT&Ts crappy network because they decided to risk putting more customers on their network knowing that they CANT handle the data nor provide adequate services as they should?
wow, thats a first. Let me guess, you;re an employee of AT&T or in denial that Verizon has always done one thing that all carriers should do, and that is provide the best NETWORK first and foremost.
Then again, I guess you cant please them all. Enjoy your pretty phone that you cant USE. HA !
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