Verizon, Apple center of tablet, LTE rumors

by Joe P on July 28, 2009

It all started a few weeks ago. Check that, a few months ago, with rumors that Apple would develop an iPhone-like tablet for use on the Verizon Wireless network. This would be the counter to the iPhone, and a circumvention of Apple’s exclusive agreement with AT&T, which runs to sometime in 2010. Things got a bit more specific in late July, as Scott Moritz of TheStreet.com updated us on Apple’s efforts to get at tablet device out by the holidays. It looks to have a large screen, 9 or 10 inches with touch, and possible a keyboard of some sort, though we know Apple is not reluctant to use the touch interface as a keyboard. Yet Moritz did note that Apple might not want the same kind of agreement with Verizon as it has with AT&T. So how do they plan to sell the device, which obviously needs a level of Internet access?

Next up came a rumor from TechCrunch that Verizon is working overtime to get its LTE network ready by the first quarter 2010. They planned to have some markets ready to go during the year, but TechCrunch’s source says that the company wants the 20 to 30 markets it had planned for the second half of 2010 to be available in the first quarter. Their source then made a connection between this aggressive schedule and an Apple tablet, since “there was talk of at least one non-dongle (wireless card) product that this LTE launch was being specifically geared towards.” What better device to feature than the newest pretty gadget from Apple?

TechCrunch, of course, has has its own credibility problems, as when they posted a false rumor about Google’s talks to acquire Twitter. They did update the post, but in the linear world of blogging sometimes that’s not enough. They went on to defend process journalism, which is justifiable. Some people simply take issue with the manner in which they handled and still handle process journalism. Anyway, this is just to note that TechCrunch isn’t an airtight source of rumors, but I’ve digressed too far.

The bomb came just a few days later, when Verizon announced it would test LTE in Boston and Seattle later this year. Of course, they didn’t address the rumors that they’d try to get 30 markets covered by Q1 2010 — that would be foolish. If they’re working on it, it’s still not certain, and companies just won’t comment on something until they’re sure it’s going to happen. Still, we are on pace for 30 LTE markets in 2010, which is about 30 more than we’ll see from AT&T in that span. Unless, of course, AT&T ramps up its effort in an attempt to secure another year or two of iPhone exclusivity.

Finally, just to whet everyone’s appetite, it seems that Apple is working with record labels to get some more interactive features to go along with music downloads. That would go perfectly with a tablet device’s big screen. It would not only bring back album artwork, but it would also allow for even more interactive features. This, as bands like Radiohead and Nine Inch Nails have proven over the last few years, can be important sources of revenue for artists. Plus, there’s the great potential for video capabilities on this tablet.

Selling the tablet might not be like selling the iPhone, though. The rumors are that Apple doesn’t want the same subsidy model as the iPhone. After all, it’s essentially a mini PC, so it can function without always being connected to a network. Yet it would benefit from having an always-on connection, and the only way to do this is to work with wireless carriers. Instead of a direct subsidy, one idea is to have some of the network costs “baked in” to the price of the tablet, much like the Amazon Kindle. Apple could then sell the device, working with Verizon to provide month-to-month service for roughly $30 per month, or the price of an average cell phone data plan. Mobile broadband plans, like ones sold with netbooks, typically cost $60 per month.

The rumors are heating up, and the more we hear the more the Apple – Verizon marriage makes sense. Verizon is trying to get out its LTE service, and Apple needs a network for its new tablet. Together they could bolster the new LTE networks, giving Verizon a flagship device. We’re eagerly awaiting more definitive word on this matter.

Filed under : Apple