Apple reportedly in talks with Verizon, Sprint over 2010 iPhones & 4G

Despite recent comments (both public and private) by Apple to the effect that the company intends to stay focused on GSM cellular network technology — rather than CDMA, Verizon’s technology of choice — for a number of reasons, notably international adoption of GSM over the alternatives….a towering new tidal wave of rumors on this subject were sparked over the weekend by USA Today.

A solution to the problem of CDMA (EVDO for 3G data) versus GSM would be a jump straight to “4G” technology, something that Infinite Loop is reportedly working on quite aggressively for its 2010 iDevices (not just iPhone!) which will include cellular data-network connectivity. It would also open the door for Apple to also work with the #3 network behind AT&T and Verizon: Sprint, the most aggressive adopters of 4G to date.

In concordance with Rumors’ own reporting, the USA Today article suggests that these talks between Apple and Verizon have been actively ongoing since late last year.

These talks have reportedly been going on in parallel with discussions between Apple and both AT&T as well as Sprint; the latter has apparently been less formal, active or direct according to sources, but all three companies are in ongoing negotiations which are at the heart of Infinite Loop’s decision, due within the next nine months at the outside (and most likely quite a bit sooner), as to whether to continue working exclusively with AT&T in the United States or to open the iPhone up to one or both of the other two major domestic service providers.

Sticking with AT&T would mean that the iPhone would be excluded from the move to 4G (capable of several times’ AT&T’s current 3G speeds which are at 2.0-3.6Mbps and in the process of upgrading to 7.2Mbps in time for this summer’s 2009 iPhones) until late 2010 or even into 2011….something that Apple is eager to avoid, according to multiple reliable sources.

In its recent second-quarter financial results reporting, AT&T emphatically credited the iPhone for much of its continued success in retaining the #1 spot nationally as well as in driving adoption of 3G data plans which are a fast growing, key component of the network’s revenues. Should Apple decide not to extend its exclusive contract with AT&T, it would be a huge blow to the service provider’s fortunes; as a result, there is a huge incentive for AT&T to convince Infinite Loop not to open up the iPhone to its competitors.

Also, while 4G does have theoretical advantages, real-world download speeds won’t dramatically exceed that of 3G (~7.2Mbps) until 2011 under the roadmaps of the leading 4G (LTE) hardware chipset manufacturers; this suggests that buzzwords aside, Apple can readily make arguments — similar to the original reasons for delaying 3G adoption — that power drain/battery life and actual user experience will be better served by waiting for 4G to fully mature before adopting it in mobile devices for which battery life is so vital.

One possible alternative is for Apple to retain exclusivity with AT&T for the iPhone until at least mid-2011, while allowing its other near-future 3G- & 4G-enabled products (i.e. “iTablet” and Macbook Air 3G/”Netbook” as well as other models of Macbook) to be used with any network that supports the associated technologies. However, that could present many complications for the activation of such devices with service providers that didn’t sell the devices in the first place as AT&T does with the iPhone….and all of the many other complexities which exist when dealing with cellular companies.

All things considered, despite the resistance from some users to being customers of AT&T….we consider this to be excellent news. At a minimum, Apple will now be in an extremely strong bargaining position with AT&T; and more than likely, one way or another, we will see at least some of Infinite Loop’s products available on other networks as soon as the second half of this year.

Either way, iPhone won’t be available anywhere but with AT&T (unless one is willing to jailbreak — something that is far easier and more seamless/painless on iPhone than most people realize) in the USA until mid-2010 at the earliest….but even if this only amounts to maneuvering for leverage on Apple’s part, the outcome can only be a good one for consumers.

It’s been quite a while since we used the “Many Bothans Died to Bring Us This Information” tag on a post (a very old reference, for those who’ve been following us since the beginning)….but we feel this one deserves the title, and we thank the many sources who contributed to this report as well as previous ones on this very exciting topic. There are some particularly interesting tidbits still under source embargo related to these ongoing talks between Apple, AT&T, Verizon and Sprint which we hope will be approved for publication soon.

Stay tuned for much more on this and all things Apple in the days ahead! If you haven’t already, consider following us on Twitter for “inside of the insider” updates as well as bite-sized spadefuls of exclusive dirt — and if you’ve got something to say, don’t hesitate to email us or simply fire off a comment using the form below! 🙂

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