Is Verizon Running Scared of the iPhone and Pre?
By Sascha Segan, Extreme Tech
It's like the old saying goes: One article is an isolated occurrence. Two is a coincidence. Five is a conspiracy—or, in this case, an organized whispering campaign.
Five unsourced articles in the past few days have spread rumors that Verizon Wireless is working on some sort of super-duper wonder phone. If you believe USA Today and The New York Times, it's an iPhone. BusinessWeek plumps for an Apple media tablet. The Wall Street Journal suggests it'll be a Microsoft device, and several blogs have propagated rumors today about a Verizon/Motorola Google Android phone.
Verizon appears to be running a whispering campaign to draw attention away from the two hottest smart phones this summer: the Apple iPhone and the Palm Pre, which are exclusive to AT&T and Sprint. T-Mobile, meanwhile, is riding comfortably on Google's Android aura, with the world's first Android phone in the G1 and an anticipated follow-up in the Samsung i7500.
Verizon is notably weak on hot smart phones right now. The BlackBerry Storm, its last flagship release, was buggy and got decidedly mixed reviews. RIM has been churning out software fixes but Verizon has refused to apply them, preferring instead to leave the device somewhat buggy. (Hopefully, that logjam will break within a few weeks.)
In any case, the Storm is last winter's big story, not this summer's hot new thing. Most of the rest of Verizon's lineup are older Windows Mobile 6.1 phones, which have lost much of their attraction now that we know innovative next-generation Microsoft devices like the HTC Touch Pro2 are coming.
To some extent, Verizon is being bitten by its own message control. Apple keeps the faithful interested with a steady stream of true and false leaks, generating an entire Apple rumor industry. Palm has been dribbling out Pre information for months. But it's very difficult to get accurate future information out of Verizon Wireless or its partners, which means the company will lose the buzz war.
Verizon must be bracing for a flood of customers rushing into Verizon stores and asing "What do you have that's like the iPhone/Pre?" Since Verizon controls information so tightly, its salespeoples' hands are tied. They have to keep saying "it's the network," which is a great answer, but to a different question.
Verizon has little to worry about in the long term. The company consistently wins awards for network quality, and that has translated into a steady stream of new customers. Verizon has the nation's most reliable 3G network and the most solid, aggressive plans to push into 4G next year. (Sprint already has one 4G city, but its build-out and device plans seem to range between tentative and incoherent.) This winter, Verizon is anticipated to have a BlackBerry Storm 2 and probably the Palm Pre, if Sprint's exclusivity lasts six months or less (as expected).
But during the second and third quarters of this year, Verizon is in serious danger of looking like a dull, reliable voice network with dull, lower-end devices. That means lower average revenue per user, as smartphone owners tend to buy more expensive contracts. During May and June, customers will be looking enviously at the Pre; during June and July, they'll be eyeing the iPhone. If Android has a chance this year, we're going to see that chance start playing out in September and October, and both Sprint and T-Mobile may star in that show.
So Verizon has decided to start playing the rumor game. They're welcome to do so. But a clear roadmap of hot devices would do a lot more to reassure customers than a bunch of vague rumors designed to confuse.