Apple gave up at least $30 billion of revenue by not launching a CDMA iPhone in 2007-2008

26 Jan

We have heard rumors that Apple was in discussion with Verizon to launch the iPhone. However, it was only in 2011 that Verizon started offering the iPhone. It has come to my attention that Verizon’s insistence on having an icon or two offering its own services and its refusal to offer the subsidies that AT&T offered could have been the deal breaker.

I realize that AT&T had an exclusive on the iPhone as it helped with development of the first generation iPhone. However, Apple could have given some concessions to AT&T on the rebate and launched the iPhone on Verizon in 2008.

Apple has sold around 150 million phones since the launch of the iPhone. I believe the number could have been close to 200 million if Apple had started offering the iPhone on networks like Verizon that use the CDMA network.  I strongly believe that the following would have happened if Apple had launched a CDMA iPhone  in 2007 or early 2008:

  • Limited Android’s market share to less than 25%. Remember, the first Android phone, the T-Mobile G1 did not launch till October 2008. More than fifteen months after the first iPhone went on sale and three months after the iPhone 3G went on sale.
  • Apple’s cumulative revenues could have been $30 billion (50m X $600) higher. I am assuming the average selling price per phone of $600(conservative).
  • Apple’s stock would be higher than $500 as the $30 billion in lost revenue would have generated additional earnings of $6-$7 billion at the minimum.

The biggest hurdle to offering the phone for GSM and CDMA could have been getting versions of both phones produced  have plagued virtually every release of the iPhone.

To be clear this post is not meant to be a rant against Apple which has executed exceptionally in the last decade. It is a simple – What if?


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