The Verizon iPhone Shakes Things Up

quote in honor of our subject today. So let me get something out of the way. I was wrong. I'm very rarely wrong, but this time I was wrong because back in our prediction show for eleven, I said that would come and go without the iPhone coming to Verizon. Then I went to c S and there was mentioned that Verizon was going to make a big announcement that week after c e S, and by the time I left ce S, it was all but a certainty that that announcement would be the iPhone would come to Verizon,

and low and behold, such was the case. Indeed, I think this is the first time that I've actually gotten one of our predictions right to the point where I might actually win a point for it in our recap. Yeah, well we'll find out when that when December rolls around, and it's a lot of time between now and then whoever is holding the red pen of death. And the amazing thing is it only took until January twelve for us to get that far Man, twelve days into the

year before I got one totally wrong. Oh Man. So yes, at the time we were recording the podcast that Verizon iPhone has been announced officially but has not yet been released officially, and according to our publication schedule, this episode should come out even before you can get your your hot little hands on a Verizon I phone, but not too long before, because uh, they're starting to allow pre

orders starting at the beginning of February. Correct, Yes, February third, if you are an existing Verizon customer um, which is

very nice. A lot a lot of companies actually sort of prefer to push the bonus out to the new people to get them to come on board, but in this case, Verizon is offering them the phone on February third for pre orders and then uh for everyone else, h February t So, but it's not going to be long and they had this had to have been in the works for quite some time in order for Apple to turn around that many iPhones, because a lot of people are expecting the iPhone to do very well, indeed

on Verizon. Yeah, Now, if you're not familiar with the way the United States major carriers kind of fall into place, I thought you were about to say, if you're not familiar with the iPhone, I'm sorry. What if you're not familiar with the iPhone? I mean not everyone is, but I'm assuming that most of the people on the podcast from the past. Uh, it's my little I T crowd moment. Yeah, the the United States carriers are a little different than

they are elsewhere in the world. Right, Yeah, well, and in the United States we have lots of different carriers, but we have four major ones, right, and the biggest of them all as far as the number of customers is a Verizon. Yes, so it goes correct me if I'm wrong, I'm doing this from memory. It's Verizon, a T and T Sprint T mobile. That is correct as as of this recording. Right. So iPhone, of course in the United States was exclusive to a T and T

for the first several years of its existence. Yes, in fact, they it was. It was it was public knowledge that the agreement was private. They had some sort of deal that and unknown amount of time and they just said, yes, it is exclusive to a T and T for well, we're not telling you for how long, but it's exclusive. Yeah.

The the number I saw more often than not was five years, which is that's what I based my prediction off of, because by my by my reckoning, it would mean that would be the first year outside of the exclusivity agreement, assuming that it was not renewed. Right and clearly, whatever the length of time it was, it's over now.

Uh So why would it makes sense from a customer base that the Apple would want the iPhone to get onto Verizon because Verizon has got more customers than T. But there are problems with that, Yes, there are problems with that. What's one of the what's the biggest one? The biggest one would be the difference in technology used for by the different carriers to handle voice and data um on on a T and T and T mobile systems. Uh, they use g s M, which is I guess it's

fair to say the global standard. The most places in the world use GSM. There are a few other countries besides the United States that have the other one that we're about to talk about. But most yes, c dm AY, but most use G s M would and Sprint next, Hell and UH and Verizon use c d M A, which is in the United States is by far the largest market for c d M A technology. Yeah, and uh, which is both a good and a bad thing, right.

I mean, if you do just domestic travel, if you live in the United States and you just do domestic travel, c d M A is great technology. You've got pretty good coverage pretty much anywhere you go. If you do global travel, then that becomes a problem. You don't really have a phone capable of making calls on other networks because the technology is not compatible. That's the really important thing. Is c d M A and G s M they don't work with each other, right, but you can get Ah,

there are phones out there that have chips for both. Right. Uh. Some of the c d M A phones have a SIM card slot because you know, they number is essentially baked into the hardware for c d M A phones. Um. Whereas if you have a G s M phone and you've actually taken it apart a little bit, you know, maybe just taking the battery out to see the SIM card or watch them put it in at the store. You know that basically your number and your phone book in some cases and some other information is stored on

that card. And you can take your SIM card out of your phone if you have a G s M phone and put it in another phone and there you're ready to go. Um, but not so much with a C d M a phone. And people who take who have Verizon, for example, and go to a country where there is G s M if they have one of the dual mode phones, I'm not sure exactly how you would refer to that, but um, there's a slot where you can insert a G s M card and you can, you know, get a SIM card and snap it in

place and use your phone. Um. Of course I'm sure that means that you're using a different phone number, but at least you can use your phone. So the the news about the iPhone coming to Verizon was both surprising and not surprising. It was not surprising because, of course, like I said, you know, the Verizon has a lot of customers, and of course, if you if you make a product, you want to hit as many customers as

you possibly can in. It was surprising in the sense that it meant that that that Apple had to re engineer some of its phone in order for it there to be a C d M A version, right, that's right, and just couldn't just PLoP out the other, you know, the G S M based one, and with a couple of changes. That actually takes quite a bit. And there's some differences between the Verizon version and the A T and T version that are carrier based, not necessarily hardware based.

That's true. Um, you can see evidence of the difference when you actually look at the phone. There's a visible difference. Um. If you look at the antennas, which is uh famously now after antenna gate, the band around the outside of the iPhone four Um, you can see that the antennas of a Verizon iPhone and a an A T and T iPhone are joined differently in different places, and in fact,

one of the buttons is moved a little bit. So if you get a bumper for an A T and T phone, it's not going to fit your Yeah, I've seen that A T and T is starting to carry um or at least uh, I don't know if they're carrying it, but there are a third party bumper cases out there that are designed to be universal, so they're the openings are a little larger so that it can accommodate a button, whether it's been moved over a little bit or not. It's the ring or mute switch if

you're if you're keeping score at home. It also means that because there are the antenna's aligned a different way on the Verizon phone, that there's a totally new way that you can hold it wrong. Actually I don't know that for a fact, I've not used a Verizon iPhone. The c net report that I read said that they had tried it out and they couldn't could not find

a grip of death. As if you're if you're unfamiliar with this, we should we should actually I guess mention this um a T and T s iPhone or the iPhone that that was used with a T and T UH.

When the iPhone four first came out, it was criticized because if you touch certain parts of the antenna, they're actually uh different pieces to the antenna that go around the outside the stainless old band that you see then around the outside and if you touch it in a certain way, you create a short circuit that drops calls. UM and you know it. The problem exists more for some people than others. Some say that it has to

do with the electrolytes and your sweaty hands. Some people say whether or not it's you're left handed, because you'd be holding the phone in your left hand and that would make that would mean that you would be more likely to make that connection. Yeah, the problem is solved pretty easily if you put a rubber bumper around the outside of it. Um. But of course it people have a pretty high standard for Apple's iPhone. And uh, the

the idea that it wasn't perfect. Uh, you know, made some people laugh with glee and other people, you know, stamp their feet. Yeah. The and and we should also add that this was a problem that was new to the iPhone floor because the previous iPhone versions did not have the antenna exposed like that. Yeah. So the iPhone on Verizon, we have not played with it yet. UM.

I have seence some reviews. I saw the Consumer Reports was actually cautioning people against buying it, and I've seen the same sentiment echoed throughout the blogosphere, and various tech journalists have said the same thing, and essentially what their point is is not that the iPhone and Verizon is a bad product or that Verizon offers a poor service, but rather that if Apple is following its normal m O, then we should see an update to the iPhone this

summer tends to be in June that we see these these announcements, and that it may not be immediately available when the announcements made, but shortly thereafter it tends to

be available. So if there's an iPhone five on the way or some sort of update to the iPhone four, kind of like the way the the iPhone three GS was an update to the iPhone three G, then it makes sense to wait instead of purchasing an iPhone four now and then a few months later you're you're faced with the fact that you know your your devices already not obsolete but outdated. So um buy or beware, I guess. I mean, it really depends on what you've been used

to write. I mean, there are plenty of people out there who are still using uh, dumb phones or feature phones. I'm looking at one, I think, so, yeah, there are plenty of people out there who have phones that they don't fall into the smartphone bracket, and they've been waiting for something like the iPhone. You know, they aren't necessarily um enamored of the other operating systems that are available out there, whether it's Android or Windows Phone seven or

or Blackberries. Uh, you know, the RIM operating system or Palms webOS or Palms Web. But well, you know, where are you gonna buy one of those? Um? So they're there are very few differences actually in the iPhone for that that you would actually notice. I mean, they're the cost, the price point is the same for this team gigabyte version. Uh for the thirty two. UM, I don't really know what the data plan is going to be yet, that's

that's true. And it doesn't, as as you said, have a SIM card slot, so you will not be able to use it on a GSM network. But it does have data, you're right, and um uh, you know Verizon still has unlimited data plans if I'm not mistaken, right, We don't know if that's gonna dropped, you know, we don't know if that's going to stay the same once

the iPhone goes live. We also don't know apparently right now anyway, as soon as the iPhone hits the store shelves, it will not be capable of doing simultaneous data advoice, which means you can't have a phone call while you are surfing the web at the same time. But supposedly that an update will follow, possibly in the spring. Okay, what I had read, Now I don't I don't know if this is true. And what I read was that was a problem with c d M a more than

it was with the iPhone's ability to do that. I think I think it's a are your issue, not a hardware issue, which is why Verizon, which is why Verizon said they were working on it and they expected to fix that by spring. Okay, yeah, I was. I was curious when I read that and wrote that down, went really is that? Okay? It's one of those things where, I mean, you see these problems pop up in devices occasionally, and sometimes you just your left scratching your head about it.

And really it just means that there's stuff going on behind the scenes that we're not privy to, and um, and that's why, I mean, it probably makes perfect sense from their perspective. Now, there is another capability that the Verizon iPhone has as that, as you said, is not necessarily tied to hardware, and that's its ability to function

as a hot spot for WiFi. Yeah. Actually the the A, T and T one could do that, but that feature is not enabled the United States by carrier specific So by that we mean that you could create a little hot spot with your phone and connect up to I think it's five other devices to it. Yes, that's what I have, So your phone would be connected to uh the three G network. Um. Because that's another thing we should point out is the Verizon iPhone does not work

on their LT network. Yes, and that's that's that's true of the A, T and T iPhone four as well. They're both three G network phones. So that also would sort of lead one to believe, especially with the push for four G right now, that it might be a good time to just for a couple of months do anything and see how that plant that plays out, because I don't know if either of these phones will be upgradeable.

I kind of doubt it, right yeah, because usually you need another chip in order because LTE, at least LTE anyway, is it a different technology, um with if you're looking at uh the hsp A plus the the old technology that gets four G speeds. That's the that's the technology that T Mobile refers to as four G on their phones, because you're getting four G speeds even though it's not technically a four G technology. Um, I don't know. I would assume you didn't even have to have special equipment

for that. I know that my iPhone is capable of doing that and I love it. But yeah, it's getting back to the hot spot. The idea here is that your your phone is connecting to data through the three G network and then creates a Wi Fi hot spot that other devices can connect to. So if you have a happen to have another device there that does not have three G capability or doesn't have any uh has, it's just WiFi only, you could connect it to your phone via the WiFi and then get data that way. Now, um,

there's something else that I thought about. I was thinking about this. It was, you know, going over the idea in my head and going okay, well, there other than a few differences in the technology required, Um, the iPhone four is not all that different from the one that's on a T and T uh a T and T

S network. But I do think this is kind of an interesting move because um by and large phones, at least in the United States, phones are specific to carrier, and now we're taking the almost exactly the same phone

and moving it to multiple carriers. And I wonder if that's going to open doors for other manufacturers such as motor Role for example, could you have the droid move to Sprint so you have it on Sprint and Verizon, or you know LG S or HTC S phones, will they the same model be available other than you know, C D M A or GSM or actually most of the carriers are going with LTE for four G, so it seems like it would just be that much more portable.

Well this, well this, do you think this is going to open the door to, uh, give the manufacturers more control over which carriers they can shop their phones too. Well, we've seen some of that before, like Nokia has phones that are appearing on on multiple carriers, but in those cases they tend to not be supported by the carriers

in a subsidized way. Because in the United States, one of the other big things that's different from a lot of the other countries in the world is that, uh, most of the phones that we purchased tend to be subsidized by the carrier, and you you know, you agree to enter into a contract usually two years, although you can get one year contracts as well um with that carrier, and as part of that agreement you get those part of the purchase prices knocked off of the device, right

because of usually a significant portion if you were buying an iPhone outright to be around six hundred dollars I think something like that five hundred dollars in so when you enter into this contract, they knock off some of that purchase price. Now, if you were to actually examine the contract, you'd realize that through the various fees that you're paying over the course of the lifetime of the device, you're going to pay more than you would on that

upfront purchase price. Right. But it's easier to do because it's spread out over time. It's not all at lens. You know, if you see, if I see a phone in front of me and it says it's five dollars or six hundred dollars, I bulk at that price. And I know that there are people around the world who that's their reality. They go out and they buy a smartphone. That's how much it's gonna cost and then but they're

not tied to a specific contract. So um, I think if you I think, if we do see more devices appearing on other carriers, there's the there's at least the potential that it moves to a more uh well to to the same model that most other countries are following, which is that, yeah, it's not tied to a specific carrier, but you're going to have to pay for that. You know, you're gonna have to pay the full price for that

model as opposed to a subsidized price. Yeah. Yeah, Well we saw we saw evidence of that with Google's Nexus one phone, which was made by htc UM and they initially were planning on offering it UM unlocked, So it was a GSM phone that you could use with UM a T and T or T mobile and I mean you you could actually have it subsidized by T mobile UM or you could buy the unlocked version, and there was something like what four difference in the price between

uh T mobile two year contract and getting it that way. Of course, uh they never really came out with the the they kind of ended the Nexus one program for it moved to other carriers that you had been planning a Horizon phone which never actually made it um to the to the carrier. Um. But yeah, I mean that. You know, if you were watching that whole thing, you would have seen firsthand the difference that the subsidy makes. UM. But I have started seeing rumors that there will be

an iPhone headed for Sprint UM. And of course the rumors have been back and forth with T Mobile simply because uh, T Mobile, if I'm not mistaken, is currently the largest wireless provider in the world, although the fourth largest in the United States. T MO Boll has the rights to the iPhone in Europe. UM. And you know,

there have been pictures of packaging with iPhone. I've actually seen people on the blog on blogs post photos of iPhone accessories in the T Mobile livery and I'm going, yeah, well, they would actually have a reason to have those accessories packaged in their colors because they sell the iPhone, just not here in the United States, so international travelers would definitely want that, yes, yes, And so you know we're seeing I've been seeing the rumors for Sprint now that

the Verizon announcement has come down, So I wonder if uh, there's an exclusivity agreement at all, or a semi exclusive agreement between those two carriers, or if Apple is going to say, you know what, we want as many people as we can get, no matter what, we've got the iPhone,

it's desirable. I'm pretty certain that during their UM press conference where Verizon unveiled the fact that they were having the iPhone to no surprise at that point, yes, because but everyone was essentially saying, today's the day Verizon is going to talk about the iPhone. I mean, it was, that was all over the news. UM. But when they announced it, they said there is no exclusivity agreement. So that that means there's at least the potential that the

the iPhone could move to the other carriers as well. UM. I'm sure the other carriers would love to see that. It would it would even the playing field across all carriers. I read somewhere, and this is take this with a grain of salt, actually not verify it, but I read somewhere that essentially, during a press call, a T Mobile representative essentially said that the company had lost around ten percent of its customer base to a T and T because the iPhone. So you know, you think, well, now,

Verizon's got the iPhone too. If you've got people who were holding off on moving changing carriers because they had heard perhaps they had heard that A T and T s UM was not being reliable as far as UH being able to hold a call, especially for people who are living in San Francisco or New York, where we heard that all the time, especially from tech journalists. They were saying, I love my iPhone, except I can't you know, it keeps dropping calls on me, or I don't get

my messages. You know, I'll leave the building and then five minutes later, I suddenly get a notification that I missed like twelve calls during the day. UM, they may very well be tempted to go to the Verizon if they think that Verizon is going to provide a more consistent service. So it'll be interesting to see what Apple does, whether or not, you know, it tries to to expand even further. My what I'm wondering is, how is the iPhone moving to Verizon really going to affect the whole

smartphone landscape in the United States. UM. Leading up to this this announcement, Android was actually gaining and not just gaining ground, but but out outperforming Apple in the market. Now, you could argue and legitimately, are you that part of that is because Androids on a whole bunch of different phones on all the different carriers. You know, it's not

like the iPhone is one line of products. You have several generations of it, but it's one line of products, whereas Android is an operating system that you can find on handsets manufactured from multiple vendors and on multiple carriers. So there's no surprise that it would be doing well, especially for you know, for the carriers that did not have the iPhone, people who were customers of a carrier, they wanted a smartphone, they were not willing to switch

carriers or maybe not able to that. A lot of them went with the Android. So do you think that the iPhone going to Verizon is going to shake that up? Do you think that Apple is going to regain market dominance and smartphones or at least leadership in in that market. Well, I think that it's certainly going to put Apple and Google at a more competitive stance with one another. This

is not you know, to Google's advance age. Um, not because I think Apple will steamroll Google, but Google had a decided advantage in being on multiple carriers at one time, and now this is going to open the door for Apple to regain or gain customers moving from dumb phones or from older phones who are upgrading. It will give them an opportunity on a much bigger carrier UM to to do that. But it's there. This is sort of

double edged. This is good for Apple because now they've got access to all these customers UM, if they can open the doors to Sprint and T Mobile, they'll have the big four UM and that that's good for them.

But as some tech journalists have pointed out, this is also going to really enable people to see the how good the iPhone really is in comparison to its Google counterparts, because UM, a lot of the problems that have been experienced over the years with say dropped calls UM and UH data speeds UM have been by some people attributed to a T and T S network, not to the

device itself. Now that you have essentially the exact same device, mostly UM on a different network, you can see you're going to see UH people evaluating these two against one another. It's not gonna be Android versus iOS anymore. It's gonna be Verizon versus a T and T S network, and you're gonna see pretty much laid bare whether Apple's iPhone is really is uh is really being held back by a T and T S network, and a T and T may get the opportunity to point their fingers and say, ha,

we told you so. Yeah, we've been meaning to look at that. So UM. Part of it may be alleviated by iPhone fans moving from a T and T to Verizon and unburdening the network a T and T two. So there's that. It's not completely scientific, but um, but you're going to see that, and Apple actually has a different advantage to UM. The one the one big complaint that anti Apple people have, UH that I've heard about the iPhone is you know, hey, it's a closed shop.

You have the app store and that's where you buy the apps. You don't have choice there. You don't have the choice of manufacturers. Well that's true, but that's one of the big complaints people have about Android is it's

a different experience on different handsets and on different carriers. UM. So like the fact that the latest build of Android can be found on on very few phones and then a larger group of phones have the build behind that, and then some more have the build behind that, and then and then you start getting it's kind of diamond shaped. Right at the very top, you've got some phones that

have the latest build of Android. Yes. Now the very bottom you have some phones that are stuck with the oldest or are really old builds of Android, like one point six um. And then in the middle you've got all the Android phones that are run thing either a version or two versions behind. And and that means that

the experience across Android phones is not consistent. Yep. And then and it's true too that if you look at at least at my phone carrier, look at the phones, the Android phones that are available, you can buy different Android phone Like that, you'll see versions of the operating system are different on different phones. And if you start doing a little research, you'll find that there are no plans to upgrade such and such a phone at all. So you may be behind and not there's no chance

to catch up to move up. So you you may be paying forty nine dollars for a cool Android phone, but there's a cooler Android phone for two dollars more than that that will get an upgrade that your phone will never get And I don't know that people understand that necessarily. Some sure lots of them do. But you know, if you don't do a little research, you may find that you're stuck in an older version of the operating system. And of course that's true for for the iPhone as well.

I mean, I'm I'm sure, uh, if I don't say this, people will write in and tell us this. Yes. Of course, if you have, you know, an iPhone from a couple of generations ago, there's not a chance that you're going to get upgraded to the latest iOS. You know, and yeah they have they abandoned people too, but the experience may differ. If you buy the latest iPhone from a carrier, you're likely to get the newest experience, the most recent

operating system. You're probably good for a couple upgrades, at least until the next version of the iPhone comes out, and then probably still for another couple of updates until What really we get to is that the upbring system tends to outstrip the capabilities of the hardware. Yeah, and that's true, and so it's not necessarily that the carriers or or the Upbring system designers are being malicious. Sometimes sometimes it's just the fact that your device can't handle

the next level of the operations. Now in some cases it's I don't know what the reasoning is. Well, they of course they want to outdo the competition. We we talk about competition all the time, and how this is. This is great that we have Android and the new Windows phone software and Blackberries uh, you know, doing some serious been doing some serious upgrades and has their application store. So these are all working against one another and they're

they're forcing each other to innovate, and that's cool. But as they innovate the operating system on each of the their their services, eventually your hardware is going to get left behind because to run these fancy new applications, well you know you're going to have to upgrade your hardware. Yes, that that doesn't work to the detriment of the carrier

or the the phone manufacturer, except for you know, network capacity. Yeah, that might actually be another play into another reason why some carriers don't allow certain OS upgrades to hit certain Android phones because it lets them market newer phones over the older phones. Like if you keep upgrading, if you keep allowing these updates to hit the older Android phone owns.

Assuming that the older Android phones are capable of running the OS UH, then you give that person less reason to upgrade their phone, right because their old phone can keep up with the new Earth that phones. So there's always this conspiracy theory element where you're thinking, maybe the carrier is whold withholding Android updates so that it can market the newest Android phones and sell those and then just keep you on a continual UH cycle of upgrading

your phone every x number of months. In a In a related note, the Verizon New every two program is going away. They announced that right about the time. I don't think it was on the same day, but it was right about the time I saw it. It was one of those headlines that was a very small headline

at the bottom of the page. But they used to have this deal where after two years you would get a I think a hundred dollar subsidy or something in addition to whatever the discount was for renewing your contract. And they're doing away with that. And I don't know if it's necessary the iPhone for related but I wouldn't be surprised if that didn't factor into the decision to

end the program. Um In fact, I think the article I read said, you know, they've probably been considering this for quite some time, but this certainly isn't coined to encourage them to continue in the pants. Yes, because there they will sell Verizon will sell a lot of iPhones. Yeah, let me, We've been going on for about all over half an hour. Yeah, we should probably still wrap this

up a bit. But because in order to save some face after my disastrously embarrassing UH prediction went so wrong less than two weeks into the new year, allow me to make a new prediction, which is that, at least in the short term, with the iPhone coming to Verizon, Apple will regain leadership in the smartphone market in the United States. Yeah, I see. I'm not willing to say that.

I'm willing to say I'm willing to say that enough people are going to either move to the Ice own from a dumb phone or switch from there whatever smartphone they're using on, especially Verizon customers, Verizon customers who have always wanted to have an iPhone, but then they felt like they settled for a different smartphone. Now, when I say that, that's not my own personal opinion. I'm an

Android owner and I love my Android phone. But but for some people, some people got an Android phone not because they really wanted an Android phone, they wanted a smartphone and they could not get the iPhone. Right, So those people are going to switch. The people with the dumb phones who have always wanted a smartphone, now they're going to be like, oh awesome, I can have an iPhone. Now they're going to switch. You're gonna have new customers switching as well. Now some of them are going to

be a T and T to Verizon. So in reality, you're not gonna have any gain there. It's just gonna be a lateral move. But I think that uh androids leadership was not overwhelming like they were not. They were not by far outstripping Apple in the smartphone market. So I think Apple is going to regain leadership in that space and maybe for a year. It might be a year before we see how that how that pans out for the long term, and maybe that they regain leadership

and they never let go. But we'll have to see. But that's my new prediction. Okay, all right, any of you guys have predictions about the Rize iPhone, Like I predict I will go in buy one you can let us know. You can let us know on Twitter or Facebook are handled there is tech Stuff hs W, or you can shoot us an email. That email address is tech stuff at how stuff works dot com and chrism I will taught to you again, maybe even on an iPhone really soon. For moral on this and thousands of

other topics. Is it how stuff works dot com. So learn more about the podcast, click on the podcast icon in the upper right corner of our homepage. The how Stuff Works iPhone app has arrived. Download it today on iTunes, brought to you by the reinvented two thousand twelve Camrys. It's ready, are you