Lessons from AT&T might help Verizon survive iPhone

11.01.2011
If Verizon Wireless introduces its own version of the Apple iPhone on Tuesday, users of its network might begin to face some of the same performance problems that plagued AT&T subscribers in some areas since the rollout of the popular iPhone 3G.

Verizon is widely expected to unveil an iPhone on Tuesday in New York, ending AT&T's approximately four-year exclusive access to the iPhone in the U.S. After widely publicized problems with AT&T iPhone performance in some areas of the country, especially San Francisco and New York, the idea of a Verizon iPhone has raised hopes in some consumers for a more reliable subscriber experience.

The iPhone, introduced in 2007, continues to gain popularity in the U.S. AT&T says it activated a record 5.2 million iPhones in the third quarter of last year, the most recent quarter for which it has stated results. Pent-up demand might push Verizon's early sales even higher.

However, the sheer popularity of the Apple device, and heavy average data use by those who own one, may also haunt Verizon despite its highly rated 3G network, analysts said Monday.

Some of the issues AT&T has faced were particular to its network and the timing of the iPhone 3G's introduction in 2008, and perception may have lagged reality as that carrier has improved its infrastructure, said Tolaga Research analyst Phil Marshall. In fact, AT&T has steadily increased the maximum speed of the networks available to the iPhone, and the current iPhone 4 uses an HSPA (High-Speed Packet Access) network that many reviewers have said can achieve a downstream speed of 3M bps (bits per second). That compares with between 600K bps and 1.4M bps for Verizon's 3G network, though Verizon's is often perceived as the more reliable of the two. In December, Consumer Reports magazine .

But even if Verizon is better prepared for the onslaught than AT&T was, it might face similar problems in some places, Marshall said.