Apple said to be in talks with Verizon on iPhone deal

Apple, the maker of the popular smartphone, is conducting high-level discussions with Verizon Wireless to sell a version of the iPhone that would work on Verizon's network, according to a person briefed on the negotiations. The phone could be available as soon as next year.

The person, who requested anonymity because the deal isn't completed, said discussions between top company executives intensified two weeks ago.

At present, the iPhone is available exclusively on AT&T's wireless network. That arrangement has lured millions of new customers to AT&T and lifted the company's revenue in a recession.

The iPhone's touch screen, GPS capabilities, and 25,000 or so downloadable applications made it an instant hit. It has energized competitors who make look-alikes and given hope to device makers and wireless carriers that fretted over where to find growth in a market in which many adults already own a cellphone.

But while its exclusivity has certainly added to its desirability, it also limited Apple's market for the popular phone. Were Verizon to begin offering the iPhone - whether exclusively or as a competitor to AT&T - it would be a significant development in the increasingly important battle for smartphone users, said Roger Entner, an industry analyst with Nielsen AIG. It would give Verizon, which sells Samsung, Palm, and BlackBerry smartphones, another device to lure subscribers who do not prefer the AT&T network.

"The iPhone turned AT&T into a serious competitor now neck-in-neck with Verizon," he said. If Verizon gets a contract to sell the iPhone, he said, "it will be another major shift."

In a recent quarterly conference call with investors, Tim Cook, Apple's chief operating officer, cast some doubt on the prospect of an imminent deal with Verizon. He said that Apple was wary of building a phone for a network using CDMA technology - which Verizon's current network uses - because, Cook said, the CDMA infrastructure may have a short life span.

Verizon, however, is moving to a new network in 2010 that would not rely on CDMA technology. Verizon has said previously that even as it deploys its new network, it plans to retain its CDMA network for a time to transmit voice communications.

The person who had been briefed on discussions between Verizon and Apple said that it was not out of the question that Apple could build an iPhone for the current network.

Apple has not publicly disclosed the financial terms of its deal with AT&T or the duration of its exclusive deal, which began in 2007. Some industry analysts say they believe the arrangement ends in 2010.

Entner said that the typical iPhone user generates for AT&T around $85 in revenue a month, 40 percent more than users of other phones.

"It's been a net plus," Snyder said of AT&T's relationship with Apple. "But it's been more of a mixed blessing than most people view it as."