Could the iPhone’s Next U.S. Carrier Be T-Mobile?
AT&T’s (T) iPhone-exclusivity deal is nearing its end. And when it gets there, Apple will bring the device to a new U.S. carrier. But it’s not going to be Verizon.
It’s going to be T-Mobile.
That’s the theory put forth by Kaufman Bros. analyst Shaw Wu, who argues that the carrier is a more likely candidate than Verizon (VZ) because its network wouldn’t require Apple (AAPL) to build a separate iPhone to support it.
“Currently, T-Mobile’s 3G service (UMTS/HSPA) supports 1700 MHz and 2100 MHz frequencies while AT&T supports 850 MHz and 1900 MHz frequencies,” Wu wrote in a note to clients today. “Interestingly, both the new iPhone 4 and iPhone 3GS support 3G at the 2100 MHz frequency and, from our understanding, the technical hurdle to support T-Mobile is minor compared to supporting CDMA technology at VZ and Sprint.”
That would certainly make the transition to multiple carriers in the U.S. easier for Apple, which would surely prefer not to have to customize the iPhone to gain increased distribution. But the payoff would be significantly reduced.
Today, Verizon is the largest U.S. wireless carrier, with 93 million subscribers. T-Mobile has just 34 million. A deal with the former would nearly double the iPhone’s addressable market; a deal with the latter would increase it by a little more than a third.
Unless Apple brought the iPhone to both T-Mobile and Sprint (S). Says Wu: “It is notable that signing up both T-Mobile and Sprint would almost be the equivalent of signing VZ.”
Of course, as Wu himself notes, Sprint’s network is CDMA and would require a customized iPhone, just like Verizon. So if Apple were to sign a deal with Sprint, it may as well sign one with Verizon.