iPhone will choose T-Mobile to AT&T

For the US, it is generally assumed that the ultimate marriage between device and carrier would be the iPhone on Verizon. The iPhone is unquestionably the most popular single phone out there for consumers and Verizon is the largest network in the US with impressive coverage and a great 3G network. The iPhone though may be headed to T-Mobile first.

The iPhone has been an AT&T exclusive since it launched in 2007. It has long been rumored that 2010 was the year the exclusivity agreement would run out and the general feeling is Verizon is going to get the iPhone. On Tuesday, StreetInsider.com reported that Apple's stock actually dipped because of rumors that T-Mobile would be the next Apple partner. I guess having Verizon as a partner was actually priced into Apple's share price to some extent and when rumors indicated it was going from the largest network to the smallest of the big four, it caused a bit of nervousness from investors.

More reports came on Wednesday reinforcing the idea that Verizon and the iPhone are not meant to be. Verizon seems to be committed to its V Cast music service and the iPhone, of course, relies on iTunes. AT&T also gives Apple over twice as much money for an iPhone than Verizon gives for its most popular smartphone, a RIM device.

The point is, Apple and Verizon both have areas that they aren't likely to budge on and it may ultimately prevent an iPhone deal from ever materializing. That is a shame too. I think the iPhone needs to launch on a CDMA network in the US. By going with T-Mobile, Apple would be picking the nations second largest GSM network. It is already on the largest GSM network. My gut says that almost anyone that is on T-Mobile that wanted an iPhone would have already switched by now. I am not sure how many people on Verizon or Sprint that didn't switch to AT&T for the iPhone would do so with T-Mobile.

These are, of course, just rumors, but if true, it doesn't make a lot of sense to me. I don't see the upside for Apple with this move. Neither, apparently, did investors.