How Verizon Will Compete with the iPhone

Last Updated Aug 20, 2007 6:46 PM EDT

Verizon EnVMaybe he's delusional, maybe he knows something we don't, but Verizon chief executive Ivan Seidenberg is confident the iPhone won't hurt Verizon so much as help it. How, you ask? By adding excitement to the market and convincing users that it's entirely reasonable to spend $600 on a handset and fork over a sizable monthly payment for data service. Verizon is hoping all the market stimulation will spur demand for its own high-end smart phones, and the company is betting on its V Cast mobile music and video service to compete with the iPhone's iTunes uplink and YouTube streaming capability. But the V Cast service doesn't benefit from ubiquitous integration as iTunes and YouTube do -- a drawback that could come with dire consequences. Marguerite Reardon from CNET reports on Verizon's strategy from the NXTcomm trade show held today:
"We just added four new devices in the past month," [Seidenberg] said. "The new BlackBerry is flying off shelves. The way we see it, our customers have price points and service packaging that is different." Specifically, he pointed to Verizon's V Cast music service that allows consumers to download songs over the air, and mobile video services including the new V Cast TV that uses the MediaFlo network built by Qualcomm to broadcast live TV.
When asked if he thinks the company will take a hit from subscribers ditching Verizon Wireless' service for AT&T's he said he believes that Verizon is in a very good position. Verizon Wireless has long enjoyed strong customer loyalty with one of the lowest churn rates of any major wireless operator in the country. "The way we come at this is to let the iPhone hit the market," he said. "I don't think it changes the game plan for how we approach the market. But we need to see the impact.
In other words, Verizon isn't scrambling to partner with a handset designer to develop a last-minute iPhone-killer. The telecom leader is just planning to ride the iPhone wave, tangentially, if possible, and stick by its Blackberry guns.

(Image of Verizon EnV by Child3283, CC 2.0)