The Art of Information

…and runs straight into a wall named Android. It’s been an interesting week in the ultra-competitive smartphone market…and it’s only Tuesday. I think Apple is feeling the heat from Google’s Android and is getting ready to launch a different version of the iPhone with Verizon (and potentially other carriers) even though 2 years apparently remains on AT&T’s exclusivity contract as the only iPhone carrier. It’s gonna be a great summer for geeks!

Lots of headlines flying around the news this week. Did Android-enabled phones surpass iPhones to take the #2 spot in the US? Is Steve Jobs kicking himself in private for signing a 5-year exclusivity deal with AT&T for the iPhone? Is there any truth to the increasing buzz that the iPhone is finally coming to Verizon in Summer 2010? If so, does that mean Apple is somehow getting out of its contract with AT&T 2 years early? Or maybe the 5-year contract has already been dissolved. Read on for the juicy details…

Verizon iPhone Rumor (C) 2010 Engadget

Perhaps most intriguing, is the possibility that Apple is going to launch its 4th-generation iPhone, or perhaps a “different” iPhone model, in concert with Verizon’s launch of its LTE (read: not quite 4G) network this summer, and try to maintain the legality of its original contract with AT&T? Phew! It reads like a smartphone soap opera. Just in time for Summer!

So, let’s recap recent history - depending upon whose numbers you believe, Android phones outsold iPhones for the first time in Q1 2010; this according to consumer market research firm, NPD. The big caveat here is that NPD’s research is based upon a too-small sample group, IMHO, of 150,000 consumers who completed an online survey - this is out of approximately 285,000,000 U.S. mobile phones - that’s like 1/2 of a 1/2 of 1 percent.  The quant in me could poke holes all day long in NPD’s methodology, and that’s exactly what Apple did. Apple refuted NPD’s data, and turned back to IDC data, increased the scale to Worldwide and in this context, Apple crushed Android citing another record quarter in Q1.

So the recent past is murky, what’s the forecast look like in the Apple vs. Android saga for rest of 2010? Not much clearer, I’m afraid. Yesterday, Engadget confirmed details of the original AT&T / Apple deal from 2008. Do the math without reading the entire contract, and it looks like the rumors that a Verizon iPhone was coming this summer are just that, rumors - based on the 5-year deal beginning in 2008, AT&T gets iPhone exclusively until 2012. So let’s think about this a bit more strategically…a bit more like, say, Mr. Jobs might… how to get a win/win?

Here’s what I think (or at least who amongst the pundits I think may be right): So let’s assume the original Apple / AT&T contract hasn’t changed, or been dissolved, and AT&T has exclusivity on the iPhone for another 2 years. Let’s also assume that the mountain of buzz that has been building about Verizon launching its own iPhone in the next few months can’t all be wrong. Then maybe the WSJ had it closest when it published an article in late March that basically said there will be 2 iPhones (and quite possibly many more) - the original AT&T and then another model that worked over CMDA networks, technology used by Verizon, Sprint and the Japanese and Korean mobile. CDMA is not cutting-edge technology and slower than 4G, but demand is high enough for a Verizon iPhone that I think it’s the right time to get one to market, even if it’s a bit long in the technology tooth.

4th Generation iPhone (C) 2010 Gizmodo

This seems like the best possible of both worlds for Mr. Jobs and APPL - it can maintain its contract with AT&T while the 4.0 version of the iPhone OS and possibly (hopefully!) the 4G iPhone is coming this summer. Meanwhile, all my Verizon friends who are bummed they can’t get an iPhone finally get their way and Apple gets over 90 Million Verizon customers to sell new devices too. I guess the only one to lose out would be AT&T’s corporate attorneys who would have to find someone else to litigate - maybe just what they want headed into the steamy days of summer.

What do you think? Who wins? Who loses?

How will the AT&T, Verizon, Apple love fest play out?

Hope to hear from you and thanks for reading.