Apple may look to upstage CES with its long awaited news

The 2011 Consumer Electronics Show, like years in recent history, will bring many talked about gadgets and tech news developments.  But the biggest news of all coming in the next month may be something that's been promised and rumored for a long time -- a Verizon iPhone.  With reports that the CDMA-ready iPhone is done and on the way, BusinessWeek is reporting that the iPhone will sail home to big Red sometime in late January or early February.

While late January product launches are typical fare for Cupertino, rumor has it that the trendy electronics maker could be planning its launch event for Valentine's Day. 

Analysts are predicting that the announcement will cost AT&T anywhere from 1 to 6 million iPhone subscribers in 2011.  BusinessWeek quotes John Hodulik, an analyst at UBS Securities, as predicting that 2011 AT&T iPhone sales will drop to 8.8 million units, almost half of 2010's record 15.6 million units.  Of these, only about 2.3 million will be Verizon deserters -- the rest, he's apparently predicting, will leave Apple's magical lands for greener pastures offered by Windows Phone 7 or Android handsets.

He expects Verizon to add 13.3 million new iPhone subscribers in 2011, with 10 million of them being returning customers, 2.3 million coming from AT&T, and 1 million from rival carriers Sprint or T-Mobile.  He says that Sprint and T-Mobile may be hurt almost as badly by the release of the Verizon iPhone as AT&T.

One advantage to AT&T is that the departure of some iPhones users may mean the easing of strain on its towers.  While the company has managed good data network quality, in most cases, the company's voice network in the 3G-era has been 
a work in progress.  Part of this is due to the fact that iPhone's tend to be heavily concentrated in urban areas.  

With AT&T luring in suburban customers with sleek Android and Windows Phone 7 handsets, the departing iPhone customers may be welcome news to the 15 million out of 23 million AT&T iPhone users who have committed to two-year contracts.  After all, fewer iPhone users clogging AT&T's city towers means that service quality will likely improve.

While some might be concerned that Verizon might now face a similar crisis, experts claim that the company's investment in high-coverage city towers and fiber optic backbone will allow it to whether the coming iPhone storm with aplomb.  Michael Howard, co-founder of Infonetics Research in Campbell, Calif. states in the BusinessWeek wrap-up, "Even if Verizon's iPhone customers go wild next year, [the carrier] can easily handle the capacity."

With both networks having the iPhone, AT&T and Verizon may find their fates resting on their respective 4G efforts, which are in their nascent stages.  According to experts, Verizon owns more wireless spectrum than AT&T, but AT&T's recent purchase from Qualcomm should help to even the score.  States Roger Entner, an analyst with the research firm Nielsen, "Right now, it's like we're in a snow globe that's been shaken up.  In six months or a year, everything will settle down as these new [4G] networks come on line."

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