Some of the buzz on release of the iPhone on Verizon's 3G network is the impact it will have on its network. Will Verizon experience the same network overutilization issues as AT&T when the iPhone was released on their network? The simple answer is not likelyand the simple reason is Verizon has learned from AT&T and is prepared for this data hungry device. More specifically the reasons are:
- Verizon's 4G network will remove some load from the 3G network. This is initiallyfrom 3G laptop connect subs upgrading to 4G connections. Verizon 3G laptop subs consume much more data thaniPhone customers.
- The iPhone boost to total Verizon smartphone subs will be incremental - no number is availabe but Verizon is expected to add even more smartphone subs in 2011 than it did in 2010 and most will be with data hungry devices such as the iPhone or Android smartphones
- Android smartphone adoption would have replaced iPhone adoption if the iPhone was not launched onthe VZnetwork. We anticipate VZ is prepared for large increases in its smartphone base regardless of the smartphone brand.
But Verizon will need to be diligent and they have the tools to address network data usage. Release and promotion of a 4G smartphone willremove traffic from the3G network assuming 3G users switch to 4G devices. Promotion of certain Blackberry devices is another option as traditional Blackberries tend to be more network friendly devices.Smartphone pricing is another factor with higher priced smartphones less likely to go into the hands of younger users who will use the smartphone like they use the PC or desktop - consuming all sorts of multimedia. Applications - one application which can drive up usage significantly is video calling and video sharing. This is an app that has the potential to take offassmartphone and media tablet penetration increases.
But it takes just one market with network problems to create a marketing nightmare.