This week, Matt Drance of Apple Outsider listed the obstacles to be overcome before an iPhone shows up on Verizon’s network as:

1. The Verizon network’s inability to transmit Voice and Data simultaneously.
2. Handset feature and service restrictions likely to be imposed by Verizon.
3. Apple’s probable aversion to retailing separate GSM and CDMA iPhone models.
4. Verizon’s demand for branding handsets and marketing media with their own logos.

I mostly agree with the list, but what are the chances of these items being checked off in the near term? I thought I’d try to address each of Matt’s points using whatever evidentiary artefacts I could find on the grid.

1. Simultaneous Voice & data

The existing Verizon CDMA network does not support simultaneous voice and data. This means its subscribers can’t surf the web, send email or use data-intensive apps such as Twitter while making a voice call. Conventional wisdom is that Verizon plans to address this by building out a new LTE network, however that could take months or years to deploy. In the meantime, AT&T is soaking up market share with iPhone.

There is a potential interim solution to this problem. By upgrading their existing CDMA (Rev. A) network using an add-on technology called SVDO, Verizon’s network could support simultaneous voice and data using “Voice Over Rev. A.” technology. This makes last week’s rumour from Boy Genius Report especially interesting:

One of our Verizon guys hit us up with some pretty interesting news. We have been told that when the mythical Verizon iPhone materializes, assuming it’s not a LTE unit, it might launch with VoRA; Voice over Rev. A. According to our source, Verizon has been testing VoRA as a precursor to VoLTE.

What’s more, it appears Verizon may already be working on this solution. Boy Genius Report says it has information suggesting Verizon is already working on an iPhone ad blitz for this summer:

Verizon has tapped advertising firm Landor Associates to handle a summer advertising blitz for the launch of a CDMA iPhone.

The bottom line is that problems with simultaneous voice & data could be overcome relatively easily if Verizon really wanted the iPhone.

2. Would Verizon restrict iPhone features & services?

Aside from carrier-side services such as visual voicemail and tethering, it’s hard to imagine how Verizon could limit features within the iPhone ecosystem without exposing itself to a PR shit storm. It’s easy enough to pull the wool over consumer’s eyes when you can confuse them with 117 different models of handsets, but Apple customers know exactly what features their iPhone should come with.

Verizon’s “There’s a Map for That” ads mocked AT&T for shortcomings in its iPhone offerings. Delivering anything but the full iPhone experience would open Verizon up to reciprocal criticism.

3. Apple’s aversion to retailing multiple handsets

Matt Drance thinks Apple’s retail process could be upset by inclusion of a CDMA iPhone, but I’m not convinced this is an issue at all. There are currently four models of iPhone 3Gs – 16Gb Black or White and 32Gb Black or White. Admittedly adding a second chipset would double this to eight models, but the process for handling different customer preferences at point of sale exists today.

The good news is that a second chipset device may not be necessary. Apple may be working on a combined GSM + CDMA handset.

In February of this year, Taiwan’s DigiTimes claimed:

Pegatron Technology (a Taiwanese electronics manufacturer) has landed a contract to produce Apple’s iPhone next generation iPhone 4G — rumored to be a “world phone” (both CDMA + GSM capable).

Nothing in Gizmodo’s tear down of the ‘lost’ iPhone 4G contradicted this rumour. Jason Chen stopped short of exposing the internal chips that could have revealed dual GSM and CDMA chipsets, explaining:

I wanted to make sure I didn’t damage the components beyond repair, so I didn’t take the metal off. So this is as much as I could learn without actually breaking the phone…I also couldn’t really identify many parts, because they were hidden under the metal sheath.

Regardless of Verizon’s plans, and whether or not it requires a separate handset, supporting CDMA on iPhone is just too big an opportunity for Apple to pass up. Verizon’s 92 million mobile subscribers are an attractive prize, but they are only a subset of the potential target market. Other global operators of CDMA networks who might offer iPhone if it was capable include:

• China Telecom (China’s largest mobile carrier), with over 100 million subscribers.

• Reliance Communications (India’s 3rd largest mobile carrier), with 56 million subscribers

• Sprint Nextel (USA’s 3rd largest mobile carrier), with 48 million subscribers.

• Au by KDDI (Japan’s 2nd largest mobile carrier), with 32 million subscribers.

There are also competitive reasons to support CDMA, not least of which is that multiple Google Android devices already do so. Apple is not about to stand by as market share goes unchallenged to it’s chief rival.

4. A Verizon branded iPhone

If Apple does release a CDMA capable iPhone, it won’t be exclusively for Verizon.

According to Portio Research, there were 4.3 billion mobile subscribers worldwide in 2009. This number is expected to grow to 5.8 billion by 2013 – of which 1.6 billion will be smartphone subscribers. Most of the growth be in the Asia-Pacific, which by 2013 will account for 43.9 percent of subscribers, followed by Europe (25.0 percent), Africa and Middle East (12.2 percent), Latin America (11.2 percent) and North America (7.6 percent).

So, if Steve Jobs says “There’ll be no Verizon logos on my iPhones”, Verizon really shouldn’t call his bluff.

In Summary

There are compelling reasons for Apple to support CDMA on iPhone, many of which have nothing to do with Verizon or the domestic US market. Global competition in smartphones is fierce, and time is of the essence. Regardless of Verizon, or of its exclusive contract with AT&T, Apple can’t afford to wait too long before it addresses global opportunities and challenges.

In any case, the first CDMA capable iPhone almost certainly won’t be a ‘Verizon iPhone’. It will be a world iPhone.