This isn't the first time analysts have believed in that Apple and Verizon would team up. Back in January, it was widely believed that the iPad would be announced in conjunction with Verizon Wireless. It wasn't. Instead, it was announced with Apple's long-time partner AT&T.
On June 7, Apple announced the iPhone 4, also with AT&T and not Verizon. The exclusive arrangement between the two companies would, on the surface, appear to be ever-lasting.
Ratcliffe notes that AT&T won't necessarily be the loser when Verizon finally begins offering the iPhone. "We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T's network take advantage of the alternative," he wrote.
"Overall, however, we believe that smartphone customers are relatively sticky, particularly given that (a) 70% of AT&T postpaid customers are on family plans (which would necessitate a group switch), (b) switching cost for customers currently in contract would be $375-525 per handset, (c) approximately 40% of handsets are covered under corporate discount arrangements, many of which may not have VZ equivalents, (d) for many, if not most iPhone customers, the service quality being delivered on the AT&T network is in reality comparable to what they'd receive on Verizon's network, and (e) switching will likely result in accepting a bandwidth-capped data offering, since (we believe) that Verizon is likely to launch tiered bandwidth pricing prior to the launch of an iPhone."
The breakdown Ratcliffe sees is churn of somewhere between 500,000 and 1 million AT&T customers who will defect for Verizon. The remaining 8 to 8.5 million Verizon iPhone customers will be existing customers who change devices, or stolen from T-Mobile, Sprint and others.
Ratcliffe still believes that AT&T will hook up to 16 million more iPhone customers by the end of 2011, with 10 of them signing up this year and another 6 next year. That's hardly a catastrophe for AT&T.
This report does lend credence to the theory that AT&T is offering the iPhone 4 upgrade to so many of its customers early to prevent them from jumping ship in January when the iPhone is rumored to be released for Verizon.
As far as I am concerned, a Verizon iPhone won't exist until it is announced by Steve Jobs. Until then, anything else is a rumor.