Why The Verizon iPhone Rumors are True – CDMA iPhone Due in January

Posted on: August 10, 2010
Posted in Mobile

Iphone_verizon

This post originally appeared on TechCrunch

We’ve been hearing Verizon iPhone rumors for years now.

It’s to the point that no one really believes the rumors anymore, since analysts and pundits have cried wolf so many times. But this time looks to be different due to some key dynamics in the semiconductor value chain, and I am going to go on record to say Verizon will be selling an iPhone this coming January. Here’s why:

Smartphones like the iPhone are built from a collection of components, which are sourced individually from suppliers—e.g. the iPhone 4’s cellular baseband (the core chipset used in mobile phones to handle voice and data communications) comes from Infineon and its GPS chipset from Broadcom.

Component purchases and manufacturing starts don’t typically reveal strong links to individual handset OEMs. But in some cases components have a DNA which is traceable through the supply chain. For example, iPad rumors became much more concrete when we knew Apple was procuring large LCD screens.

For typical refreshes of GSM-based iPhones (the model that works on AT&T’s network), suppliers and component product families remain fairly consistent between models. But a Verizon compatible iPhone would be CDMA-based, which would make its DNA distinct from other iPhones and traceable through the supply chain.

The dominant supplier of CDMA chipsets is Qualcomm, the largest fabless chip company in the world. Apple has never procured baseband chipsets from Qualcomm before.

If Qualcomm were to plan for orders from Apple, there would be a ripple effect through the supply chain. It works like this: Apple’s iPhone forecast links to Qualcomm’s CDMA chipset forecast, which then trickles down to their foundry partner TSMC, who uses the forecast to plan wafer starts.

A CDMA-based iPhone would likely sell 2-3 million units in the first few weeks (modeled after iPhone 4’s oversubscribed launch). The lead-time associated with upside in the semiconductor world is huge, sometimes as long as 26 weeks (supply is tight right now so this rule is in effect and Apple had major supply problems with the iPhone 4 and iPad).

Sources with knowledge of this entire situation have assured me that Apple has submitted orders for millions of units of Qualcomm CDMA chipsets for a Verizon iPhone run due in December. This production run would likely be for a January launch, and I’d bet the phone is nearly 100% consistent with the current iPhone 4 (with a fixed internal insulator on the antenna).

I can’t say with 100% accuracy that an iPhone will hit Verizon store shelves in January, but all of the signals point that way, and it would give Verizon’s CEO some interesting things to talk about in his CES keynote (though he may have to refrain as CES comes before Apple’s typical January keynote). I may be proven wrong, but based on my history dealing with components and selling to Apple, a Verizon-compatible iPhone looks to be a done deal.

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