Thursday, May 24, 2007

First CDMA iPhone in 2012

USA Today reports that Apple has not only given AT&T a five-year exclusive for the iPhone, but it has promised not to develop a CDMA version of the phone for that entire period.

I believe that’s a big mistake for Apple, since they’re limiting themselves to the 27% of Americans who use AT&T (née Cingular) and excluding the 49.9% that use CDMA. (It’s not clear whether gray market European iPhones will be available for T-Mobile subscribers). This also reduces their bargaining power in Japan, and raises questions about their Korean entry strategy.

But the big impact is that Apple has guaranteed that for the next 5 years, Verizon and Sprint will promote whatever iPhone-killers are offered by LG, Samsung and Motorola. I haven’t looked at their mobile phone advertising budgets, but I’d guess that these two (with T-Mobile) will be outspending AT&T by 2:1 or more.

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