iPhone Available on Multiple Carriers by 2010?

Verizon and the Apple iPhone

Apple may bring the iPhone to multiple carriers by next summer in a move to maximize market penetration, according to an analyst report out today.

The company’s success in using a multiple-carrier strategy paid off in France, with a huge jump in market share, according to Piper Jaffray senior analyst Gene Munster — who also said that doing so stateside could bring similar results.

“We believe Apple is slowly transitioning each country into which they sell the iPhone to a multi carrier model,” Munster wrote in his report. “In other words, we expect Apple to add new iPhone carriers in the U.S. within the next year (likely with a new product launch next summer). By way of example, for various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model.”

Munster added that in France, Apple (NASDAQ: AAPL) commands a market share near 40 percent, compared to countries where it has an exclusive agreement, such as in the U.S., “where the iPhone has market share in the mid-teens.”

AT&T holds the exclusive contract for selling the iPhone in the U.S. until 2010, and some industry observers have speculated that Apple would strike a deal with Verizon Wireless, the nation’s largest carrier, if Apple can get its phone compatible with Verizon’s network.

Since Verizon’s current network doesn’t support the iPhone, Apple would either need to wait until Verizon completes its transition to 4G, by way of its Long-Term Evolution (LTE) technology — a process that could take several years — or it could redesign the iPhone to work on Verizon Wireless’ existing infrastructure.

The news comes at a time when the FCC is reviewing exclusive wireless contracts to see if they unjustly benefit the technology companies over consumers. At the same time, the relationship between AT&T and Apple has experienced some rough patches — including lagging feature support, coverage area and controversy over app approvals.

On the international front, Munster said Apple will expand overseas iPhone sales from about 80 countries now to 120 by the end of the year. He’s also bullish that foreign sales will continue to grow.

And on the heels of the China Unicom deal, he predicts the Chinese market will comprise 10 percent of all iPhone sales worldwide.

“In our opinion, the iPhone opportunity in China is significant, and will be critical to our CY10 estimate of 32.5m units worldwide,” he wrote. “Beyond the 120 countries, other smartphone makers sell into about 160 countries worldwide and we see no reason why Apple could not fully expand into all 160 smartphone markets. One critical piece of the rapid international rollout of the iPhone has been the soft-keyboard, which can accommodate many languages right out of the box without the need to ship unique physical keyboards for each language.”

Multitasking iPhone — and more

Munster went on to offer an explanation for the iPhone’s ability to support multiple, concurrent applications only using Apple’s built-in apps — as opposed to third-party software. He said that Apple chooses to prohibit third-party multitasking to maintain acceptable battery life for users.

“As a consolation, third-party apps can push notifications to the device, but cannot fully run apps in the background,” Munster wrote. “Again, we believe this is about preserving the user experience on the iPhone (with decent battery life), not a technical limitation of the device.”

The analyst also said he sees promise in Apple eventually offering a monthly subscription video service through iTunes that could be viewed on any type of upcoming Apple TV, iPods, iPhones and Macs.

“Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month,)” he wrote. “Such a product would effectively replace a consumer’s monthly cable bill(~$85/month) and offer access to current and older episodes of select shows on select channels.”

Munster did say that the release of such a service depends on complex negotiations, but that Apple could launch the offering within the next year, simultaneously with a new version of the Apple TV or with updated Apple TV software.

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