Carrier to offer 16GB, 32GB Apple phones in February
What’s the value of at least 10 million more iPhone owners for Hollywood this year?That’s what number crunchers get to figure out now that Verizon will start selling Apple’s iPhone 4 to its existing customers starting Feb. 3 and to new subscribers a week later. Verizon has been eager to offer the device it started negotiating with Apple to sell two years ago, but it had to patiently wait for AT&T’s exclusive window to end. Verizon’s deal covers several years but is not exclusive, meaning AT&T can still offer the phone. Analysts estimate Verizon could sell 9 million-13 million iPhone handsets by the end of this year. But some find that figure conservative considering AT&T sold 16 million iPhones in the past six months alone, according to the company. It’s unclear how many of AT&T’s existing iPhone users, many of whom complain about thecompany’s sluggish network, will make the switch over to Verizon, but steep early termination fees of $350 to break two-year contracts could dissuade them for some time. Either way, the iPhone on Verizon clearly increases the already considerable clout of the multi-purpose screen, putting more of them in the hands and pockets of users hungry for entertainment to watch or play. The number of digital dollars generated by sale of movies, TV shows, music and games to the quickly increasing smart-phone market will be significant; the amount of coin the iPhone has earned for content owners on AT&T’s network in a single year could easily double. That’s in addition to revenue from new smart phones that run on Google’s Android system, which use faster 4G networks to make more video and gaming content available to more mobile customers. The smart-phone biz grew by 53% in 2010. But it’s the iPhone that most content creators are eager to exploit. Last year, Jobs said Apple paid developers over $1 billion since the company’s App Store, which sells such popular games as “Angry Birds,” opened in 2008. This year, Citibank estimates the store will generate more than $2 billion in sales, of which developers will receive 70%. The iPhone App Store now boasts more than 300,000 offerings. But Verizon’s iPhone will also likely boost the streams of movies and TV shows rented on Net-flix and provide Hulu with another mobile audience for its Hulu Plus TV subs, for example, along with opportunities for Amazon, Best Buy and Walmart to increase entertainment sales through their CinemaNow and Vudu stores. In 2010, studios earned $683 million from the digital sale and rental of movies and TV shows and $1.8 billion more from video-on-demand, according to the Digital Entertainment Group. ITunes users rent and purchase more than 400,000 TV episodes and more than 150,000 movies per day, Apple has said. What’s unusual is that Verizon won’t offer the iPhone on its new 4G network, LTE, which boosts speeds up to 10 times faster than the older network that powers downloads of video and other entertainment fare on most phones in the market. Apple had to create a version of the iPhone 4 for Verizon because its network uses a technology known as CDMA, as opposed to the GSM technology used in all existing iPhones. Apple and Verizon have declined to comment on whether an LTE-based iPhone will eventually be released. At a launch ceremony held at New York’s Lincoln Center, Verizon execs boasted about the superiority of their network, run on CDMA technology, and promised customers that its G4 iPhone will offer a much better experience than AT&T. Apple CEO Steve Jobs, who was rumored to be making the trip to New York for the announcement, was not present at the press conference. Verizon had also touted the network at last week’s Consumer Electronics Show but didn’t talk about its iPhone plans. The iPhone will cost $199 for the 16GB and $299 for 32GB versions, the same as AT&T’s pricing. Pricing for data plans has not yet been disclosed.