Update: Verizon gets the iPhone

The smartphone will run on Verizon's 3G EV-DO network, will be available Feb. 10

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The specifications of the phone appear to be similar to the original iPhone 4 that starting shipping in June last year. It comes with a 3.5-inch "Retina" screen that displays images at a 960 by 640 resolution.

It will include dual cameras so that users can video conference with others using Apple's FaceTime application. It will also include a Personal Hotspot that will let users share connections with five other devices via Wi-Fi. The phone will run on an Apple-developed A4 chip.

The 16GB model will cost $199.99 and the 32GB model $299.99 for customers who sign up for a new two-year agreement.

The executives did not disclose subscription pricing details. They said that tethering would become available in the future.

It remains to be seen how the availability of the iPhone from Verizon may impact AT&T. ComScore recently said that as of November, Apple had 25% of the U.S. smartphone market. That amounts to a significant number of phones on AT&T's network. In the third quarter of last year alone, AT&T reported it activated 5.2 million iPhones.

However, just last week, a Consumer Reports customer satisfaction survey ranked AT&T last among mobile operators. Over half of the 58,000 respondents who were AT&T customers used iPhones. Still, in order to switch to Verizon, an existing iPhone user will have to buy a new phone and potentially either wait out or pay to break their contract with AT&T.

The new iPhone is likely to boost sales of phones for Verizon, but not exclusively from the new iPhone, said Dan Hays, director of the telecommunications practice at PRTM. He's skeptical of other analyst estimates that predict sales of 9 million to 13 million iPhones for Verizon in 2011. "While the launch of the Apple iPhone on Verizon's CDMA network marks a turning point for the U.S. wireless market and shifts the competitive landscape for high-end wireless subscribers, we believe that current estimates of its potential sales are overblown and fail to contemplate the likely benefits to Verizon's other smartphone devices," he said.

The Verizon iPhone may entice some high-end subscribers from other operators to switch to Verizon, convert a small number of existing Verizon customers and indirectly spur sales of other devices on Verizon's LTE network, he said. But that will likely amount to 5 million to 7 million Verizon iPhones this year, he said, slowed by the high cost that customers will be required to pay to break an existing contract to switch to the Verizon iPhone.

(Grant Gross contributed to this report.)

Copyright © 2011 IDG Communications, Inc.

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