Verizon Wireless and Apple Unite – Not for the iPhone but the iPad

| Oct 15, 2010 | Consumer Services - U.S.
| Analyst: Deepa Karthikeyan

Event Summary

October 14, 2010 -- Starting October 28, Verizon Wireless will offer the iPad WiFi as a bundle option with its MiFi device in its retail stores. Verizon Wireless will offer three bundles, priced at $629.99 for iPad WiFi 16 GB + MiFi, $729.99 for iPad WiFi 32 GB + MiFi, and $829.99 for iPad WiFi 64 GB + MiFi. Verizon Wireless is also offering three monthly access plans to iPad customers, which include a $20 plan for up to 1 GB of data, $35 for 3 GB of data, and $50 for 5 GB of data. In addition, Verizon Wireless will also offer all three iPad WiFi models on a standalone basis.

Quick Take

Analytical Summary

• Current Perspective: Positive on Verizon Wireless’ joint venture with Apple, as this marks the carrier’s first alliance with the latter and is likely to set the stage for CDMA iPads or iPhones in the near future. The bundled option brings down the price of the carrier’s MiFi device to $139.99 (from $269.99) for non-contract users, which is an excellent deal for those who are in the market for an iPad as well. In addition, unlike competitor AT&T, Verizon Wireless users have the option to subscribe to one of three no-contract monthly plans, one of which is a high-end 5GB option for $50. Overall, the alliance bodes well for all parties in the industry: Apple gets more visibility, users get more carrier service options, and carriers get the opportunity to highlight and boost their mobile broadband sales.

• Vendor Importance: High to Verizon Wireless, as the new bundle option has finally enabled it to establish a relationship with a coveted Apple product despite the lack of a CDMA iPad version. The offer is likely to enhance interest in its mobile broadband services and is an excellent opportunity to highlight the benefits of its MiFi device, which allows users to share their 3G connection with up to five devices. This launch has also enabled the carrier to dethrone archrival AT&T as the sole Apple devices carrier.

• Market Impact: High on the U.S. services market, as the launch impacts all parties: the end users, carriers, and Apple as well. Users now have more than one carrier option from which to choose to power their 3G iPad; the carriers, both AT&T and Verizon Wireless, now have a better opportunity to highlight their broadband services, as the device will soon be sold at their stores; and, lastly, Apple benefits from the wider distribution for its products. The market has been abuzz with new tablet devices from major OSs such as Android and OEMs such as RIM, which is indicative of the appeal of this device. With wireless broadband gaining prominence among all user groups who appreciate the mobility factor, the upcoming months will only bring more partnerships – and new devices to compete with the iPad.

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Competitive Positives and Concerns

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Analytical Perspective

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