iPhone on Verizon: Unexpected Benefits

When the iPhone on Verizon was finally and mercifully announced people went nuts. People love the iPhone, but the iPhones Achilles' heel is AT&T's coverage. AT&T might argue that it covers 97% of the country but when you can't get a signal 2 feet outside an AT&T store you are forced to wonder just how the company is cooking the numbers. Is that 97% of Americans for an hour a day? 97% of Americans see the company's ads? One million Americans with three hundred times the bandwidth they need?

It really doesn't matter, everyone can take a deep breath and relax. Verizon is going to get the iPhone and the world will be a better place. How much better? Well, there are some hidden benefits to iPhone on Verizon.

5. Verizon dividend investors get a boost

It might not be the smartest move in the world but some folks invest in stocks to get the dividends. If you bought Verizon a year ago the company was paying roughly 6.5% (5.6% as of this writing). That's a pretty healthy dividend when the typical savings account pays a single percent. If you've got the stomach for the ups and downs of the stock  (the five year graph looks like the mouth of meth addicted shark )you'll get a decent return on your investment.

The investment will likely look a lot better once news stories about the iPhone on Verizon start showing up: long lines mean miserable customers but more dough for Verizon and Apple and that is good for the stock price. The folks that bought Verizon for the dividends are going to make a fortune on the valuation.

4. Verizon Customers

This seems obvious, Verizon customers can get the iPhone so that's the obvious benefit. There's a bigger benefit: They won't have to deal with Verizon customer service when their phone craps out. Here's an example:

Blackberry user X has a failing Storm. She takes it to Verizon and the guy tells her she has two options: Buy a new phone or get one from a friend. Doesn't take the phone to a tech, doesn't look at the phone, doesn't try the phone out. She states that she is trying to hold out for the iPhone. He says they don't loan phones and that he can show her better phones than the iPhone. She says "better than the iPhone? Show me all your phones I can take to the Apple Store for service!"

Later that day she got great service from Verizon so it isn't universal. The point is that that would not have happened at an Apple store. Take a failing iPhone into an Apple Store and there is a better than even chance you'll walk out satisfied.

3. iPad owners get to step down a model

The Verizon iPhone features tethering. That's right, five devices can share one connection. You probably are thinking "What the hell, where is the upside for me? I can get data on a iPad for 14.95 a month. With no contract!"

A valid objection to be sure but we are talking unlimited data for five devices. The math works. Somehow. If you've got an iPad, an MacBook Air, and some other connected device (perhaps the latest dishwasher) you can run all that data through your Verizon iPhone.

Well the math and the arguments are enough to give Gauss the jibblies. The truth is that you'll be able to jailbreak your Verizon phone and use your iPad anywhere you can get a signal.

2. Price war!

Verizon will sell you an iPhone for two hundred clams, AT&T will sell you an iPhone for two hundred clams. You can get a cheaper data plan on AT&T, you can get an unlimited plan on Verizon. Why no price war? Why isn't AT&T cutting the data plan price to $10? Why not free unlimited texting at Verizon?

You'd think competition would force those kind of changes, but when you expand from AT&T to Verizon you're not exactly changing your sole vendor from Nordstroms to Wal Mart. AT&T and Verizon don't compete on price. Yet.

That is probably not going to last. If serious share starts slipping through AT&T's fingers you can be pretty certain the company will look for ways to compete, and if AT&T gets desperate enough the company will start cutting prices for data plans, texts and calling plans. If the Verizon service is slow you can bet Verizon will be cutting prices to lure more folks from the sweet, but on and off, embrace of AT&T.

1. AT&T subscribers

Will there be a mass exodus from AT&T? Probably not. Corporate plans, family plans and contract lock in all add up to a lot of stuck people. That said, a lot of people won't be stuck and they'll be jumping off the death star into the red nadir. Since AT&T has been working to keep up with demand when said demand is markedly less you'll actually be able to use your iPhone in more places.

Even if you don't plan to switch, the expansion of the iPhone to a whopping two US carriers will likely bring you some benefits. The bigger question is why you have to put up with choosing a carrier at all. If only there was some company out there who would wade through all this nonsense for you and make everything easier. That is a topic for next week.