Why Apple Should Develop A CDMA-Based iPhone
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It appears that Apple is talking with Verizon Wireless behind closed doors about launching a connected-media device of some kind over the next year, possibly an iPhone. It’s unclear if those discussions will result in a deal, but even if not, Apple (NSDQ: AAPL) should seriously consider making devices based on CDMA, the network technology used not only by Verizon (NYSE: VZ) but more importantly by hundreds of operators worldwide, including China Telecom.
SEE ALSO: The Verizon Wireless Rumor Mill: Assessing The Latest Scuttlebutt
If it doesn’t adopt CDMA, Apple would be squandering an easy opportunity to vastly expand its global user base. CDMA is used by 279 operators in more than 100 countries that reach a combined 455 million 3G CDMA users, according to the CDMA Development Group, a trade association focused on the development of CDMA technologies. (By comparison, Verizon Wireless, the largest U.S. carrier, has more than 86 million subscribers.)
Of particular interest is that two of the largest and fastest-growing CDMA markets are China and India. According to CDMA Development Group Spokesman Brad Shewmake, China Telecom expects to add 30 million subscribers on its CDMA network this year, and two carriers in India—Reliance and Tata—have started offering 3G CDMA on a wide-scale basis. While Apple has been selling iPhones in India for some time, it has yet to launch anything in China. (Although China Unicom, a predominantly GSM operator, has confirmed that it is talking with Apple about launching an iPhone.)
For its part, Apple COO Tim Cook discounted the importance of CDMA last week during Apple’s quarterly conference call, saying it “doesn’t really have a life to it after a point in time.” In part, that’s true. Most carriers have decided to roll-out a 4G network called LTE. But realistically, device manufacturers won’t be able to skip over 3G. They’ll likely have to support both networks over the next few years until carriers achieve widespread coverage—especially if people rely on it as a phone.
Supporting CDMA won’t be cheap. Today, Apple is able to essentially manufacture one device, which keeps margins high and has allowed it to streamline the business. The simplicity was important, especially at first, when the company was launching its very first phone. But now, if Apple wants to play with the big guys, it will have to support multiple networks—like every other major handset maker around the world.
@triciad
Apr 28, 2009 4:24 PM ET
Posted In: Technologies / Formats, Operating Systems, Companies, Apple, AT&T, Verizon, Countries, Asia, China, India
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