Reports have ranged all over, suggesting that Sprint, T-Mobile and Verizon Wireless will all nab the phone next. If Sprint or Verizon were to snag the iPhone, Apple would have to build a new version of the iPhone with a completely different type of cellular radio inside.
Why would Apple want to expand? At this point, there are few new iPhone converts to be had with AT&T. After three-plus years in the market, Wu believes that everyone who is willing to buy an AT&T iPhone has pretty much already done so. If Apple wants to grow its user base, it needs to sell the iPhone with another carrier. Wu believes a move is imminent.
"From our checks with industry and supply chain sources and a recent SEC 10-Q filing by AT&T mentioning that exclusivity with 'a number of attractive handsets' could end, we have conviction that the iPhone could likely finally be at another carrier besides AT&T here in the U.S. in 2011 and potentially at Verizon in 2011 or 2012... We believe the argument for AAPL to pursue Verizon sooner than later is to address the growing presence of Android. What better way to do that than where Android has seen the majority of its success?"
Indeed, Android devices -- Motorola Droid, Droid 2, Droid X; HTC Droid Eris, Droid Incredible -- have done very well at Verizon Wireless. The Droid X and Droid Incredible continue to be very popular, more than a month after their initial release.
Wu cautions that we shouldn't be too quick to assume that Verizon Wireless will get the iPhone, however.
"From our understanding, the Verizon negotiations are not finalized with important details still being ironed out, including technology and economics. We think it is premature to rule out T-Mobile or Sprint (who also uses CDMA but WiMAX for 4G). In addition, there is the possibility of multiple U.S. carriers being signed."
AT&T has about 90 million subscribers. Verizon Wireless would add 93 million potential new iPhone owners to the mix. Were Apple to go with Sprint and T-Mobile instead, it could target those carriers' 48 million and 34 million subscribers, respectively.
Is it going to happen? No one but Apple really know.