Verizon-Apple iPhone agreement 'may not ever get resolved'

Struggles between Verizon and Apple are a sign that a deal to bring the iPhone to Verizon's network may never happen, even once the carrier's high-speed 4G network is established, one Wall Street analyst has said.

Mike Abramsky with RBC Capital Markets said in a note to investors Friday that he believes Apple is likely to turn to T-Mobile and possibly Sprint in the U.S. to counter the expansion of phones running the Google Android operating system. But comments made by Verizon's chief executive this week could be a sign that the nation's largest wireless carrier still cannot reach a deal with Apple.

"Verizon may not accept Apple's contract terms that risk its Android franchise, which could face significant cannibalization from pent up iPhone demand on its network," Abramsky wrote. "And Apple may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."

He continued: "This may or not ever get resolved even under LTE; the longer this takes, the more entrenched Android becomes at Verizon so the more difficult to strike a deal."

Last October, Google and Verizon announced a partnership in which they would help to create, market and distribute products running the Android mobile operating system. Verizon's push has helped Android grow exponentially in the U.S. smartphone market.

Abramsky said he believes that recent reports of a CDMA iPhone set for manufacturing in December could be destined for other carriers around the world, including KDDI in Japan, China Telecom, and Mexico's Telefonica. Verizon also runs a CDMA network, but it's possible the carrier cannot reach a deal with Apple.

The analyst said the impact of a delayed Verizon iPhone, or no iPhone on its network at all, would be minimal to Apple's stock. Abramsky had previously predicted that Apple would sell between 6 million and 8 million iPhones on Verizon's network in 2011, though the addition of T-Mobile and Sprint could add between 4 million and 5 million sales.

He also said he's heard that the iPad could possibly come to Verizon in the first half of 2011, but cautioned that he has not "confirmed" the rumor. RBC Capital Markets has currently forecast sales of 24 million iPads next year.

In recent months, numerous rumors have claimed that Apple will release a CDMA iPhone, compatible with the Verizon network, in January of 2011. A CDMA variant of the iPhone has reportedly been in testing, and in August was said to be just two steps away from production.