Verizon May Have Made an Error

Implications: Source of revenue when seeling iPhones:  revenue from device and revenue from plan/subscription.  Both need one another.  Newer devices garner attention while older devices reach end of life. Gaining control of the platform is the end issue.

Analysis: When a new device hits the market most of the players will pick up that product.  A good example of this is the Blackberry phone.  Each carrier has its own version of the product but sells that product line.

While it has been stated that Apple gets a lion's share, telecom operators capitalize on long term revenues from subscriptions.  Thus, money is made all the way around.

By virtue of Verizon passing on the iPhone, they are letting the competition have a 'lock' on the device.  Thus, the consumer who wants the device (and which also might be a Verizon customer) will move to the provider who provides the good/services he/she wants.     At the end of the day, Verizon loses that piece of market share.

Now that may mean in the future, each telecom operator will have a unique phone for its lineup.  This will cause confusion among the consumer base thus requiring multiple devices for each person or the consumer will merely make a decision as to which device he/she actually needs.

This is bad for the consumer, less choice and of course higher prices result.  It should also be noted that each telco has its problems in each coverage area.  Thus, where Verizon coverage works AT&T coverage may not and vice versa.  What happens to a customer who wants an iPhone but AT&T coverage is not up to snuff ?   Problems get created all the way around.

Hopefully, this is a one time pass and we can continue to have different versions of a model with each provider.