'Fortune' Adds Its Voice to Verizon iPhone Confirmations

Earlier this month, The Wall Street Journal and The New York Times made headlines as the first flagship news publications to confirm that a Verizon iPhone is set to launch early next year.

In a lengthy profile of Verizon CEO Ivan Seidenberg published today, Fortune adds its voice to the chorus of confirmations and takes a look at the relationship between Apple and Verizon.

The next step, the iPhone, remains shrouded in secrecy, and neither company will discuss it. But people familiar with its development say it is a fait accompli. Verizon, sources say, will sell its own version of the iPhone 4, which will work on Verizon's CDMA-based 3G network. Unfortunately for globe trotters, the first version of the phone likely won't be built to work outside the U.S. -- it probably won't carry a special chip that can turn it into a "world phone."

The profile of Seidenberg reviews how Verizon turned down the opportunity to be the exclusive iPhone carrier in the United States back in 2005, fearing the level of control insisted upon by Apple and the demands for revenue sharing from monthly customer fees that were a feature of Apple's initial arrangement with AT&T. Once Apple decided to go with AT&T for the original iPhone, conversations between Verizon and Apple ceased until early 2007, after the iPhone had been introduced but before it had reached the market.

Seidenberg broke the silence. In the spring of 2007, months before the iPhone launch, he secured an audience with Jobs at Apple headquarters in Cupertino, Calif., and asked, "Why are we in your doghouse here?" It turns out that for all of Verizon's concerns about ceding control and sharing fees, Apple was wary of building a device for Verizon's CDMA network because it didn't use technology that allowed a phone to seamlessly operate around the world, as AT&T's network does.

Meetings between Seidenberg and Jobs continued in the following months, and Apple reportedly began to come around in late 2007 just as AT&T began receiving criticism for its network performance under the load of the iPhone. While it has taken nearly three additional years for discussions to progress to the point where the companies have a business relationship with Verizon offering the iPad in its retail stores, the much-anticipated Verizon iPhone appears set to follow close behind.

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