Verizon may price the long-anticipated iPhone for its network higher than customers are used to paying for Apple's iconic smartphone, an analyst said today.
"I wouldn't be surprised if the iPhone [on Verizon] doesn't cost $50 more," said Brian Marshall, an analyst with Gleacher & Co., referring to the $199 entry-level price that U.S. customers now pay for a subsidized iPhone.
Both Apple and AT&T, the current U.S. exclusive carrier, charge $199 for the iPhone 4.
Marshall said that Verizon's price could be as high as $250, primarily because of a bigger patent licensing bill. "There's more patent expense with a CDMA iPhone," said Marshall, "particularly with all the Qualcomm patents."
Technology from San Diego, Calif.-based Qualcomm is the foundation of the CDMA standards that Verizon supports on its network.
Unlike other analysts, Marshall believes that the iPhone for Verizon will be a CDMA-only device rather than a dual-mode model that supports both that standard and the faster LTE network the carrier launched in 38 markets last month.
The additional patent licensing fees will raise Apple's bill of material (BOM) cost by a "low single digit" amount, said Marshall. "That's incremental to Apple," he noted, adding that the consumer price hike won't contribute any additional revenue to Apple.
Others have acknowledged that Verizon's price for the iPhone could be higher than the stock $199. Earlier today, Dan Hays, a consultant at PRTM, told Computerworld that Verizon will price the iPhone between $200 and $250 with a two-year contract.
Marshall has projected that Apple will sell an additional 12 million iPhones during 2011 if Verizon joins AT&T as a U.S. carrier. In the third quarter of 2010 -- the most recent data available -- Apple sold 14.1 million iPhones.
Marshall has pegged 2010 iPhone unit sales at 47.3 million, with an uptick to 65 million in 2011, a year-over-year increase of 37%. Apple will announce its fourth quarter 2010 sales figures on Tuesday, Jan. 18.
If Verizon says tomorrow that it has landed the iPhone, customers should be able to buy one this month or next, said Marshall, echoing other reports of a January or February on-sale date. Previously, Marshall had pegged March 2011 for the iPhone's availability on the network.
But the mid-season launch of an iPhone for Verizon won't disturb the annual summer refresh by Apple, he argued. "This won't change the annual cycle," he said. "I still expect a new iPhone in June or July."
Marshall also had an explanation for the Tuesday announcement coming from Verizon, not Apple.
Calling that "uncharacteristic of Apple," Marshall said the company may have ceded the stage to Verizon because it doesn't consider the carrier's iPhone as a new device, but essentially the current iPhone 4 "just on another provider."
Apple typically trots out executives, notably CEO Steve Jobs, to introduce major new products.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is firstname.lastname@example.org .
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