@ Verizon Wireless' iPhone announcement: Short on surprises, big on delivery

NEW YORK – It finally happened. Verizon Wireless (VZ) is bringing the iPhone 4 to its network, putting to rest a question that’s plagued the wireless industry for years.
After trumpeting the strengths of the carrier’s recently launched LTE network, Verizon Wireless announced that its first version of Apple Inc.’s (AAPL) hit device would only enjoy 3G speeds on its CDMA network.
Verizon has known for some time that “the company that basically invented the smart phone market would have to have a place on our network,” said Lowell McAdam, president and COO at Verizon Communications Inc., Verizon Wireless’ parent company. “Today we are extremely gratified, and I can’t think of a better word, to announce that the iPhone 4” will be on Verizon’s network.
For Apple’s part, COO Tim Cook took the stage to talk about the road both companies traveled to get to this point.
“We’ve been looking forward to today for a long time,” he said. “We have been talking to Verizon for a while and I can tell you we have enormous respect for the company this team has built and the hard-won loyalty that they’ve earned from their customers.”
Despite the tremendous success the iPhone has seen on AT&T Mobility’s (T) network, the No. 1 question directed at Cook has long been: “When will the iPhone work on Verizon’s network?”
Expanding on that theme later in an interview and highlighting a sense of bewilderment, Verizon Wireless VP and COO John Stratton equated his new iPhone 4 to “plutonium in the pocket.”
With Apple’s device soon to be on board he’s confident that Verizon Wireless’ device portfolio in 2011 is “better than anyone’s in the world.”
Many of the predictions leading up to today’s announcement turned out to be spot on. Verizon Wireless’ iPhone 4 will not run on LTE, it won’t handle simultaneous data and voice calls and it doesn’t look any different physically than the existing iPhone 4.
The pricing will also be identical to AT&T Mobility’s offering: $200 for the 16GB version and $300 for a 32GB device on two-year contracts. Existing Verizon Wireless customers will have exclusive rights to pre-order the new device on Feb. 3 and a full launch is slated for Feb. 10.
“We are going to have a very strong offer to attract customers to our network,” Mead added, perhaps hinting at the carrier’s reported plan to offer unlimited data packages for the iPhone 4.
Although Apple and AT&T have rolled out massive ad campaigns to highlight the iPhone 4’s ability to handle voice and data simultaneously on AT&T Mobility’s network, Cook said he thinks customers will be willing to give that up to be on Verizon Wireless’ network.
Apple’s reason for bypassing LTE with its first iPhone on Verizon Wireless’ network is because the early chipsets for LTE would have required Apple to make design changes that it was not willing to make, he said.
So far, the only unique feature of Verizon Wireless’ iPhone 4 is a personal hotspot that allows connectivity for up to five devices. Of course, Verizon Wireless could still have some surprises in store when it announces pricing and allowances for data.
Apple’s agreement with Verizon Wireless is a multi-year, non-exclusive deal, which could leave open the possibility for a CDMA iPhone 4 on other carriers like Sprint Nextel Corp.
Regardless of the technology that the new iPhone runs on, Verizon Wireless is ready, said CEO Dan Mead.
“We’ve been scaling all of our backend systems” to handle demand,” he said. “We have advanced the capacity. … We’re ready for this launch.”