Adding CDMA increases iPhone addressable market by 16 percent

Now that NYT and WSJ were both tipped off about the coming of a CDMA iPhone, I think it’s a safe bet. Is this significant? What is the CDMA addressable market?

Here is a chart showing  for the “CDMA 3G” subscribers (source: CDMA Development Group.)

(includes CDMA2000 1X, 1xEV-DO Rel. 0 & 1xEV-DO Rev. A )

Here are the data for various subsets.

  • CDMA2000 543 Million includes CDMA2000 1X & 1xEV-DO
  • CDMA2000 1xEV-DO 145 Million includes CDMA2000 1xEV-DO only
  • CDMA 547 Million includes cdmaOne, CDMA2000 1X & 1xEV-DO (includes non-3G)

For comparison, the GSM data for Q2 2009 is:

  • GSM 3,450, Million
  • WCDMA 256 Million
  • WCDMA HSPA 133 Million

It would be safe to assume that the iPhone will be able to address 543 Million additional users.  They represent about 13% of all mobile subscribers but the increase in addressable base is about 16%.

  • J Ives

    Horace, you never fail to deliver awesome data visualization. Very enlightening. You rock!

    I believe this could easilly be CDMA production to server AsiaPAC, namely China.

    With a VZW move to LTE emminent, why launch to much fanfare, only to leave the "switchers" with obsolete devices within a matter months. On the surface, this does not appear a recipie for VZW consumer satisfaction – switching requires one new phone, then soon to be hit up for another – but could serve as a setup for an easy n+1 play, albeit risky, IMO.

    Additionally, CDMA has not yet been updated to support simultaneous voice and data streams, a feature that Apple has consistently touted as core to the iPhone experience. Not to mmention the inherent clash of tyranical leadership styles between Big Red and Apple, both of which are first-rate corporate control freaks.

    While I agree VZW penetration is in Apple's best interest, I am not buying this as happening before Q2 2011. Too many obvious obsticals to overcome. Such "controlled leaks" have been dripping for years.

    • min

      It's not like there is a set hard date for switching to LTE. Those who chose to buy a CDMA iPhone will get the full 2-year's worth of use. It will take VZN that long to fully integrate LTE. I'm not a lawyer, but I bet if VZN says all CDMA phone users must switch to LTE, that is sufficient to end your contract without paying the termination fee.

    • Famousringo

      Simultaneous data and voice is a nice feature, but I don't think it's really crucial. It's worth beating your chest when you can offer it, but not worth ignoring millions of potential customers

    • CCCT

      Moving to LTE is not a switch over like you said, where all those old devices are rendered obsolete overnight. The LTE roll out will be pretty much like the Sprint 4G Wimax roll out, where the devices enabled for it will be able to use extra data speed and most voice channel support will still be going through CDMA2000 air interface. Thus, all of the LTE Verizon phone will need the CDMA2000 air interface, not only for just for fall back but also for roaming needs.

  • Tom

    If a carrier, like ATT and vzn, are running an LTE network, does that network support 3G and EDGE phones as well?
    If VZN is running LTE, would a CDMA 3G iPhone run on it?
    Has the lack of multitasking of voice and data been addressed yet in LTE/CDMA?

    • Marc in Chicago

      Q1: All carriers plan to support their 3G networks (whether CDMA or GSM) while making the multi-year transition to 4G (whether LTE or WiMax). It's more complicated than flipping a switch. Technically speaking, each carrier will have two or more networks during this time. They do this so that customers will have service where 4G coverage isn't present.

      Q2: A phone has to be specially built to support both 3G and 4G; it may even need two radios—one for each transmission method. It gets even more complicated when you consider that networks are run on many varying frequencies (which also may require different antennas or radios) in different areas of the world. LTE is not backwards-compatible with CDMA. (Does anyone know if LTE is backwards-compatible with GSM?)

      Q3: There is work being done to enable simultaneous voice and data on existing CDMA networks, but I don't know where progress is at.

  • Priit

    That's ridiculous. So you have a popular product which demand is way bigger than supply. What do you do about that? Right, you do nothing, because this is a good problem to have. You introduce a variant of that product. Now you have 2 separate products each demand is way bigger than supply. Now you have 2 good problems. Life is beautiful.

  • Ted_T

    LTE is supposedly backwards-compatible with GSM, not with CDMA.

    @J Ives — you arguments are sound, but considering the wriggle free NY Times confirmation of the Verizon story, I'm a firm believer this time — I can't believe both the WSJ & the TImes could be so off base on the story.

    So far as supply/demand — Apple has always managed to catch up for the holiday quarter in past — hopefully they will this time as well. They have had months warning that the iPhone 4 is a monster hit at this point — one would think production ramp up would be happening in earnest.

    • CCCT

      The supplier of CDMA iPhone is actually Pegatron instead of Foxconn. I have multiples friends working on different Apple suppliers, all confirming that the CDMA iPhone is imminent. Several parts were sent to Verizon for validation beginning this June. Given that normal carrier validation takes 2 months to 4 months, I think it is very hopeful that the announcement will be made late this year or early next year. If one has been paying attention, Verizon stock seems to partially price in this news.

  • KRIS

    I would be really really suprised if Apple would do a CDMA phone now. I am very confident that they will not do it. Apple (ie Steve Jobs) has said it many times over that Apple is not interested of the dead/dying technologies. So LTE is the way to go and that is for sure that Apple will release one sooner than later (ie 90 days from the new year or xmas). This CDMA iPhone talk is only Verizon trying to keep their customers waiting for the iPhone and not to make the jump to AT&T.

    • Tom

      The chart above shows CDMA in not dead or dying. It's grown almost 85% since the first iPhone in 2007. Time to pick some FRUIT!

      • KRIS

        The GSM chart is missing. That is even more impressive. However the new networks are not CDMA networks. Everybody are moving

  • J Ives

    Am I the only one who finds it difficult to reconcile with the idea of a carrier compelled to launch their own Android app store managing a happy mairrage with S. Jobs & Co.?

    • Tom

      Not to mention the two issues of retail distribution and VCAST media distribution, both of which VZN demands control of. John Gruber of DF said best:

      Things you don’t hear iPhone users say: “Man, this iPhone would be even better if my carrier could ‘add value’ to it.”

  • I'm not convinced CDMA is worth investing in. Where I live (Australia), the entire nationwide CDMA network was shut down two years ago, even though it was available in more areas than the GSM new network.

    It seems to me the real issue is that, in the US, Apple has an exclusivity deal with AT&T. As far as I know there are no exclusivity deals in any other country. If they fix that, all the US GSM carriers will start competing, and their only choice will be to compete based on the performance of their network.

    I think a CDMA iPhone will cause more headaches than it's worth. Verizon needs to move to GSM instead, or T-Mobile needs to expand their network.

    • KRIS

      And that will happen and then Apple brings the iPhone 5 with LTE. There is a small window after Q4 (Q3) results that Apple can bring something in before the Xmas. If that does not materialize then the next window is 90 days after the Xmas season. 90 Days because of the "return period" and Apple never messes with that. Though Apple has a very very good product line and there is no point of competing against yourself ie split production and everything now when finally everything starts to be ready for the Xmas.

  • maddoguk69

    A shame to see the US-centric myopia in the comments, even here. The AsiaPac market for a CDMA iPhone is even bigger than the US. Only a US-based commenter could still reach the conclusion that a rumoured CDMA iPhone is bound for the US and argue against it on that basis.

    Also, why does everyone presume (incorrectly) that LTE is going to somehow instantly and universally replace the CDMA network (and therefore the market for a CDMA iPhone)? LTE rollout is going to be expensive and therefore gradual. There are large parts of the US that still don't have good 3G coverage. You think LTE is suddenly going to spring up where the last generation network doesn't even exist yet?

    There is a window of at least one product cycle's length (more likely 2 cycles) where CDMA-capable devices will still be effectively classed as "latest and greatest". By the time LTE has sufficient penetration to make it worth supporting, Apple will be on to the iPhone 5.

    • KRIS

      The component that keeps the iPhone production down is the display. There is not sufficient amounts of the displays for the current model. All kind of touch displays suffers from high demand. (I wonder why 😀 ). LG and others are making them like grazy. There is no idea to divide production now. Even white iPhone is still missing. (If it is slower to manufacture it can be possible that it will never see the light.) In Asia there is lots of CDMA coverage, but Apple is not interested. They have their partner in China already and that has just began. There is of course iPhones in testing, because that is what Apple does. (There are models years to come.) The window for release is just after the Q4 (Q3) financial results and if that does not happen, then the next window is in April. (Steve can demo it in January, but it will be available after March.) Apple has time to wait that everybody gets their networks ready and move away from the CDMA. GSM is what it says … Global System for Mobile Communications. These companies that are using CDMA tries to make damage control, so they say that CDMA iPhone is coming.

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