Done Deal: Verizon Gets the iPhone

Verizon iPhone Getty Images

The year's worst-kept secret is officially history: Verizon is getting the iPhone.

"We are confident that wireless consumers everywhere will welcome this partnership," said Verizon Verizon Communications Inc.'s chief operating officer, Lowell McAdam during a crowded press conference at New York's Lincoln Center Tuesday morning,.

Verizon iPhone
Getty Images

The announcement brings to an abrupt end AT&T's three-and-a-half-year exclusive agreement with Apple. For the first time, iPhone customers will be able to choose between carriers, adding a welcome element of competition that consumer advocates hope will translate into lower prices and - hold your breath - perhaps even better service.

The product will be available through Verizon starting Feb. 10, though existing VZW customers will be able to place pre-orders starting Feb. 3. Prices will be $199 for a 16GB unit and $299 for a 32GB unit with a two-year contract That's about what AT&T subscribers pay.

Apple COO Tim Cook, who joined McAdam on stage, said the announcement marked the start of " a great relationship between Verizon and Apple, adding the deal was a "tremendous opportunity. No one more than us wants to give Verizon customers the choice they've been waiting for."

The announcement also sets in motion what's expected to be a hardscrabble competition between the two big carriers as they battle each other for subscribers. Estimates for sales of Verizon iPhone this year range from 5 million to 13 million, some coming from what AT&T would have sold. The iPhone is also a significant chunk of business for AT&T, which activated 11.1 million iPhones in the first nine months of 2010.

For its part, AT&T has been preparing for this day. In recent days, it sharply reduced prices on its older iPhones. At the same time, it has introduced a range of new handheld devices to help compensate for any defections. It also allowed iPhone subscribers to trade up to the newest unit

Apple introduced over the summer in return for signing a long-term contract. It also is putting out the word that Verizon's ballyhooed 4G network is not battle-tested and may not be able to adequately handle the expected crush in demand.

That may be true but AT&T has had to battle its own PR problems. During its exclusive run with the iPhone, AT&T put in a decidedly mixed performance. Recurring customer complaints about the network caused Consumer Reports last December to declare AT&T to be the worst phone carrier around.

Cook didn't directly answer a question when he was asked whether Apple had to redesign its antenna. After Apple introduced the iPhone 4 last year, there were recurring complaints about dropped reception. Cook said that the unit was optimized to work on the CDMA network. CDMA is a standard that's also used by Sprint Nextel and carriers in China and South Korea. Verizon Wireless CEO Dan Mead, who later came up on stage during the Q&A, said the network had gone through "very robust testing" with the iPhone, adding that he was "extremely confident that there are no issues."

History buffs may want to remember this tidbit from the day's events: Apple issued its press release at 11:11 a.m. on Jan. 11, 2011, or 1/11/11.

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

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