Business/E-Business
Commentary
1/11/2011
05:39 AM
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How The Verizon iPhone Announcement Impacts SMBs

Surprise, surprise, Verizon is expected to announce that it too has become a reseller of the popular Apple iPhone. In addition to providing more choices for businesses, the announcement could foreshadow dramatic changes in smartphone pricing.

Surprise, surprise, Verizon is expected to announce that it too has become a reseller of the popular Apple iPhone. In addition to providing more choices for businesses, the announcement could foreshadow dramatic changes in smartphone pricing.Verizon is expected to unveil an iPhone with an antenna that runs on the Verizon CDMA network as opposed to the GSM network technology AT&T uses. One area of distinction is a difference in data pricing plans. The best deal AT&T offers is 2Gb for $25 month on the iPhone; Verizon is expected to announce an unlimited data plan.

The announcement could trigger an exodus of users (some anticipate a flood as opposed to a trickle) from AT&T to Verizon. Since its exclusive agreement with Apple in June 2007, AT&T has struggled to put sufficient bandwidth in place, so users enjoy their Web surfing experiences. A Consumer Reports survey last month ranked Verizon's network as most reliable among the major carriers and AT&T's as the worst. Perhaps, small and medium businesses will give Verizon a chance to improve upon the experience. How well its network will hold is an open question at the moment.

More importantly, the announcement could foreshadow a change in smartphone pricing. To date, carriers have been able to maintain lofty pricing ($300 to $500) for their phones, but signs are pointing to significant price reductions. T-Mobile USA Chief Executive Philipp Humm has stated that much of its future smartphone lines will be Google Android phones costing less than $100. As a precursor to its new focus, the company announced a limited data plan that costs $10 per month in October 2010. In sum, businesses will have more choices when purchasing the Apple iPhone as well as finding less costly alternatives.

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