A new report citing sources in the Taiwan handset supply chain says Apple has contracted to produce a UMTS/CDMA hybrid iPhone due in the third quarter of next year that will enable the company to sell a single global handset to all carriers, and specifically to Verizon Wireless in the US. 

The report by OTR Global, provided to AppleInsider by an industry analyst, says the new “worldmode” iPhone will gain compatibility with CDMA2000 networks (including Verizon’s US network, which is currently incompatible with existing iPhone models) while retaining compatibility with UMTS 3G networks globally using a new hybrid chip produced by Qualcomm. 

According to OTR’s sources, Asustek subsidiary Pegatron will build the new hybrid phone devices for Apple rather than Hon Hai, the iPhone’s current manufacturer. This decision was reportedly made to prevent the company from being “constrained by a single-source assembler.” 

A smaller body

The research note also identified the new phone as having a 2.8″ screen, which is significantly smaller than the current iPhone’s 3.5″ display. 

Last summer, component pictures indicating the development of a smaller 2.8″ iPhone model appeared on the web next to the standard 3.5″ parts currently in production, and a Chinese-language newspaper reported that an upcoming model of the iPhone would be smaller and lighter. 

Without any mention of both larger and smaller versions in OTR’s report, it appears but has not yet been confirmed that next year’s iPhone will scale down in size while also gaining compatibility with all major mobile networks. 

CDMA vs. WCDMA

The American technological rift between CDMA providers (including Sprint and Verizon) and GSM/UMTS providers (T-Moblie and AT&T) was widely expected to remain in place until Verizon moved to LTE, the next generation of UMTS service. 

In other countries, CDMA providers have either shut down their networks and moved entirely to UMTS service (as Telstra did in Australia) or added a UMTS overlay to their existing CDMA service (as Bell and Telus just recently did in Canada). In the US, Verizon decided to do neither, and instead will only be investing in a new next generation LTE network that won’t be completed for years. 

This appeared to leave little opportunity for a Verizon iPhone before 2011, but Qualcomm’s “worldmode” hybrid component enables Apple to continue offering a single iPhone version that can be sold by both AT&T and Verizon in the US, and on virtually every carrier outside the US. 

UMTS is the 3G service associated with GSM providers, but it uses radio carrier technology (Wideband Code Division Multiple Access) similar to but incompatible with Qualcomm’s CDMA2000/EVDO used by Verizon. Despite the technical similarities, CDMA2000 and UMTS/WCDMA are competing, non-interoperable 3G technologies. With nearly all mobile carriers having announced plans to shift to UMTS or LTE in the future, CDMA2000 represents a dead end. 

It still remains widely deployed in various markets however, including the US, where Verizon’s CDMA2000 3G network is widely regarded as having wider reach and providing better data service than AT&T’s newer UMTS 3G network. AT&T’s 3G service is rated particularly poorly in San Francisco and New York City, where coverage holes have been exacerbated by a huge influx of data-hungry iPhone users. AT&T has yet to introduce its 3G MicroCell to enable users to solve their own dead zones at home or work. 

Qualcomm’s new hybrid CDMA/WCDMA chip offers the potential for a single, global iPhone that users can take to any major carrier, solving the network fractionalization problem. It also solves other issues that had served as roadblocks, including the issue of user confusion that would result from Apple selling separate CDMA and GSM/UMTS versions of the iPhone. 

With one phone that works on both types of networks, any differences between the two (such as in features like conference calling and simultaneous voice and data, unique to UMTS) will be more apparently tied to the provider’s network rather than to an iPhone model itself. 

Verizon’s DROID, cancelation fee launch

Verizon’s merciless attacks on AT&T’s 3G network coverage in ads spoofing the iPhone’s “there’s an app for that” slogan were another factor which left some observers to think that Verizon could not possibly be in talks with Apple to sell the iPhone anytime soon, but the OTR report indicates that Verizon and Apple have already hammered out an agreement to sell the new iPhone model within the year. 

Verizon recently launched two smartphones aimed squarely at the iPhone: the BlackBerry Storm 2 and Motorola Droid. At the same time, the provider also announced a new cancelation policy that charges users a hefty $350 when they attempt to back out of contracts involving “advanced devices.” 

Last year, the company found little lasting enthusiasm from users who assumed that the original Storm would be closer to the iPhone in terms of features; whether the new fee is an attempt to penalize unsatisfied users or to profit from switchers next year, it may result in users rethinking their purchases right now. 

With reports breaking the news that Verizon will be selling the iPhone within the year, sales of the Storm 2, Droid, and next year’s Palm Pre may end up repressed if customers decide they’d rather wait for the iPhone to arrive instead of facing the prospect of a major cancelation penalty and the loss of their subsidy credit by buying an alternative device now. 

Droid reviews have largely described it as a second place alternative for users who want to stick with Verizon. That being the case, the prospect of a Verizon iPhone appears poised to deflate Droid sales this holiday season. 

End of AT&T exclusivity

The news might not be good for AT&T either, considering that many users have switched to AT&T solely because they wanted to get the iPhone. The availability of a Verizon iPhone may cause AT&T buyers to hold off on new purchases until they see what kinds of competitive deals AT&T and Verizon will offer once the iPhone’s exclusivity with AT&T ends next summer and the new “worldmode” iPhone appears. 

It does however give AT&T a year to improve its 3G network and roll out the 3G MicroCell before being hit with mass defections from iPhone users irate over service issues. AT&T can still advertise that its 3G network is faster than Verizon’s CDMA2000 coverage, and that it offers some features that CDMA2000 does not, including simultaneous voice and data and easy to use, multiple party conference calling. 

AT&T has struggled to keep up with the pace of iPhone development, failing to immediately implement iPhone 3.0’s MMS and tethering features, and remaining unable to take advantage of the faster 7.2 Mbps HSPA data potential of the iPhone 3GS. The threat posed by a “worldmode” iPhone should push AT&T to deliver a year of high priority network upgrades, and potentially result in more competitive service plans.

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Once believed to have blown its first chance at the iPhone, Verizon is now claimed to be in discussions with Apple for its own version of the iPhone in 2010.

Pointing only to anonymous people familiar with the negotiations as its sources, USA Today explains that Verizon reportedly entered serious talks before Steve Jobs’ hiatus and has been continuing those talks even with Jobs temporarily sidelined for medical reasons.

Other than a 2010 target release window, little else is divulged by the apparent insiders.

Although not explicitly stated, the newspaper infers that the phone would be a CDMA device compatible with Verizon’s existing network and therefore using EVDO for its 3G Internet access. Such a move would give the phone broad coverage but directly contradicts Apple COO Tim Cook’s own dismissal of CDMA last week: when discussing iPhone expansion plans, the executive justified the absence of a CDMA model by arguing that a single, GSM phone model is easier to produce than building a separate version for a relatively small batch of customers. Cook also sharply criticized CDMA by asserting that ithas no future, as most CDMA carriers plan to phase out the calling technology in favor of the same 4G standard that will be used on GSM networks.

More likely is a direct leap to a 4G. Verizon chief executive Ivan Seidenberg recently explained that a deal is more likely for a phone with the advanced networking technology as it would let Apple continue making one phone but still service North American carriers that are for now off limits. Verizon plans to officially launch its commercial 4G network in early 2010 and would therefore have at least some of its network ready for an iPhone by the time AT&T’s exclusivity term ends, which is likely for the same year.

However determined Verizon may be to land an iPhone of its own, AT&T may topple those ambitions through its own discussions. Separate rumors have the incumbent iPhone carrier pushing Apple to extend its US exclusivity until 2011 — enough to stall any Verizon deal until AT&T’s own 4G network is ready.

Any successful deal, no matter the network type, would likely be a serious blow to AT&T, which credited much of its ability to weather the ongoing economic crisis to iPhone sales and the resulting spike in data revenue. Aside from reducing incentives to launch massive, special upgrades to the network, a Verizon model would let those dissatisfied with AT&T’ s 3G coverage or its customer service defect to Verizon without giving up Apple’s handset.

(via AppleInsider.com)

on a side note

Apple has announced the lucky winner of the contest:

“The one billionth app, Bump created by Bump Technologies, was downloaded by Connor Mulcahey, age 13, of Weston, CT. As the grand prize winner of Apple’s one billion app countdown contest, Connor will receive a $10,000 iTunes gift card, an iPod touch, a Time Capsule and a MacBook Pro.”

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Having locked down the iPhone for at least three years, AT&T is now expected to take one more shot at an exclusive deal for the Apple handset and may keep it away from competitors until 2011.

Talking to the expected “people familiar with the matter,” the Wall Street Journal hears that AT&T has a deal to keep the iPhone in its stable until 2010 and that negotiations are underway to have the device onboard for one more year.

Not surprisingly, there is no word from AT&T on the subject, and an Apple spokeswoman would only say that the two companies have a “great relationship.”

The supposedly inside information echoes a report from last year that also said AT&T had struck a deal to keep the iPhone until 2010 and may provide insight into current talks. At the time, the cellular carrier reportedly agreed to allow iPhone 3G subsidies in exchange for a one-year extension of the iPhone’s US exclusivity. Although the cost of discounting those phones has been severe — as much as $1.3 billion to date, according to an estimate — the agreement renewed interest in AT&T and gave it millions of users paying at least $60 per month (on grandfathered plans) for service.

Also, the iPhone gives AT&T a way of keeping customers from jumping ship to Verizon or another alternative at a time when the market is saturated and customers are more likely to have switched than sign up for the first time. The company added 1.9 million iPhone users just in the fall 2008 quarter alone and notes that many of these are less likely to give up on service than those who use other phones.

No matter how successful AT&T may be in lengthening its time spent with the iPhone, the firm is likely to maintain an inherent technological basis for holding the device close until two years later. As the only major US carrier with 3G using the HSPA standard on the 850MHz band, the iPhone as-is only supports its service for full data. Adapting the phone to T-Mobile USA would most likely require adding the 1,700MHz band, while switching to Sprint or Verizon would, for now, need a complete overhaul that swaps in CDMA calling and 3G access using EVDO; either of these is expected to gradually phase out.

Eventually, AT&T and Verizon will share the same network format when they both move to 4G using the Long Term Evolution format, but neither expects to have any significant networks until 2010, rendering any truly multi-carrier US iPhone impractical until the possible new expiry date for the agreement between AT&T and Apple.

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IDG World Expo announced today that Macworld will be moving from its traditional January event dates to February 9 - 13, 2010. The location will remain at the Moscone Center in San Francisco, CA.

As we began the planning process for 2010, the Mac community - exhibitors, attendees, media and fans of the show - made it clear that February would be a more ideal time to hold the event, so we listened. The Conference programs are scheduled for Tuesday through Saturday, February 9 - 13 and the Expo will be held Thursday through Saturday, February 11-13th.

Apple will no longer be participating in Macworld. It has been rumored that Apple might display at CES instead.

______
DIRECTV’s free iPhone application lets you use your iPhone or iPod touch to find any program and set your home DVR - no matter where you are.

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• Record to any DIRECTV DVR in your home

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• iPhone software v2.2.1 or higher
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• Requires DIRECTV Plus® DVR (models R15, R16, R22), DIRECTV Plus® HD DVR (models HR20, HR21, HR23) or TiVo® Series 2 receivers with 6.4a software

The iPhone application is available for download only on the iPhone App Store.

(both via iClarifed.com)

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On the heels of announcing its plans to bail on Macworld Expo next year, Apple will be instead attending the more generic Consumer Electronics Show in 2010, according to sources familiar with the matter.

The blogosphere has been passionately arguing both for and against an Apple appearance at CES, which is held in Las Vegas rather than Macworld Expo’s San Francisco. Sources close to the company have indicated to AppleInsider that the move is a done deal, a remarkable turn of events given that CES has long been dominated by Microsoft’s product announcements issued in keynotes delivered by Bill Gates and now by CEO Steve Ballmer. Read more…

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