Verizon and AT&T go Apple picking

[1]There has been quite a bit of selective leaking to the tech press this week, either from Apple, Verizon Wireless or Microsoft. First came a report in USA Today [2] that Apple was considering making a CDMA version of the iPhone for Verizon. Then, "people familiar with the matter" told BusinessWeek [3] that Apple and Verizon were actually working on an "iPhone Lite" and a WiFi-capable media pad, whatever that may be. Then, word leaked to Wall Street Journal [4] that Microsoft and Verizon were in talks to create a new touchscreen smartphone, codenamed "Pink," that would directly compete with the iPhone. Got that? Let's work backwards.

As far as the Microsoft possible product, I'm with Morgan Keegan analyst Tavis McCourt [5]on what the rumors mean. Microsoft regularly develops new iterations of its Windows Mobile platform, and has promised touchscreen devices running on Windows Mobile 6.5 sometime late this year. The Microsoft-Verizon talks probably relate to one of these devices. And if the leak came from Microsoft, it does indeed say lot about how much the recent iPhone talk has Microsoft worried.

Next comes the "iPhone-like" devices that Apple is said to be developing in connection with Verizon. Verizon Wireless CEO Lowell McAdam reportedly met recently with Apple CEO-on-leave (and all-around guru) Steve Jobs to discuss smaller iPhone-esque products under development. As long as Apple does not violate its exclusive agreement with AT&T Mobility regarding the iPhone, I assume it's free to do whatever it wishes regarding other products that take advantage of wireless services.

And finally, most quizzical of all, comes the rumor that Apple is developing a CDMA version of the iPhone. This flies in the face recent comments made by Apple's Chief Operating Officer Tim Cook. Just last week Cook said, "CDMA doesn't really have a life to it after a certain point in time." Likewise, Verizon Communications CEO Ivan Seidenberg recently told the Journal that Apple never seriously considered making a CDMA version of the iPhone, but it might work with Verizon once the carrier switches to LTE. LTE handsets most likely won't be available until 2010 or 2011, which is when AT&T's exclusive agreement for the iPhone is set to expire. 

So what is true and what is rumor? My guess is that Apple may need AT&T's 3G HSPA technology for the reach it wants, but it also knows AT&T needs the iPhone to keep growing its wireless data revenues. Apple may be leaking and testing the waters with possible Verizon dealings to gain more leverage over (and money from) AT&T, which is reportedly looking to extend the iPhone exclusivity agreement [6] until 2011. Verizon may be happy to play along with the ruse and get into AT&T's head a little bit.

Apple, AT&T and Verizon are usually pretty tight-lipped about most announcements. Throughout all of this, Apple and AT&T have maintained that their relationship is strong and that nothing has changed. Verizon too has remained mum. I'm sure this idle chatter will die down soon. Let's hope the leaks stop, so we can get back to our favorite rumor of the hour: When exactly is the Palm Pre launching? [7]--Phil [8]