Move over Verizon, T-Mobile may be jumping to the front of the line in the ongoing race amongst carriers to join AT&T as a heralded iPhone provider.
In recently issued research report, analyst Shaw Wu of Kaufman Brothers writes that T-Mobile may start carrying the iPhone by 2011, and as early as this fall. Much like AT&T, T-Mobile operates a GSM network that would make bringing the iPhone into the fold a much technically smoother process than getting it up on Verizon’s CDMA network, which would require the production of an entirely different phone.
Wu goes on to point out that T-Mobile’s 3G network works on 1700 MHz and 2100 Mhz frequencies while AT&T’s 3G network supports 850 MHz and 1900 MHz frequencies – and given that the iPhone 3GS and the upcoming iPhone 4 both support 3G at the 2100 frequency, T-Mobile very well may be first in line to get the iPhone once Apple’s exclusive contract with AT&T expires.
Apple is particularly interested, writes Wu, in broadening US availability for the iPhone due to the growing popularity and influence of Android phones. It seems that almost every week there’s a new fancy schmancy Android phone ready to hit the market, and Apple can only hold down the fort with AT&T for so long before they start ceding marketshare over to a motley crew of handset manufacturers
Though Wu points out that Android’s marketshare in the US hovers around 9%, he notes that it’s picking up steam in areas where the iPhone isn’t an option for consumers.
Lastly, and most interestingly, Wu writes that Verizon ain’t the only game in town. Verizon is notoriously as stubborn and control- obsessed as Apple, and indeed, disagreement over control is what prevented Verizon and Apple from inking a deal for the original iPhone back in 2006.
With the rising popularity of Android, and complaints about AT&T mounting, some have speculated that Verizon can negotiate with Apple from a position of power. But that may not be the case. Wu theorizes that if Apple wants to open up the iPhone to millions of new subscribers, “signing up both T-Mobile and Sprint would almost be the equivalent of signing Verizon.” Verizon is currently the largest US carrier with 93 million subscribers while Sprint and T-Mobile together encompass about 81 million subscribers. Verizon is still the big dog, obviously, but if history has shown us anything, it’s that Apple will only deliver the iPhone to carriers willing to play by its rules.
Lastly, Kaufman maintains his “Buy” rating on Apple Stock with a $320 price target.