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Have Apple-Verizon Talks Broken Down?

Talks to bring the Apple iPhone onto Verizon Wireless?? network might have broken down, according to an Oct. 20 note from Sanford C. Bernstein analyst Craig Moffett. ??ooking ahead, Verizon may have provided a clue as to the state of its (presumed) efforts to land a CDMA version of the iPhone for its network when it recently started airing ??Don???advertisements bashing the device,” Moffett writes. “The ads set the stage for the launch of a competing device, the Motorola Droid, powered by Google’s Android operating system. Running negative ads bashing the iPhone seems an improbable way to win friends in Cupertino; it is not implausible, then, to guess that the new Droid campaign might signal a breakdown in relations between the two firms.”

The negative ad campaign points out many of the iPhone’s shortcomings, such as inability to run applications in the background. And it’s a risky move: Until now, most carriers hadn’t dared to compare their smartphones with the iPhone, though Sprint Nextel had designed a Web site comparing its Samsung Instinct with the legendary Apple device. So far, I don’t know of a single iPhone-bashing campaign that worked.

There’s a possibility that Verizon Wireless is simply using the negative campaign to apply more pressure on Apple to come to an agreement. Or, Moffett might be right, and instead of waiting for Apple to come around and offer the iPhone through Verizon, Verizon Wireless is now betting the house on rival makers’ smartphones.

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