Report: Verizon iPhone deal has some kinks still

Apple has nearly saturated AT&T subscribers with its iPhone. To keep growing, it needs at least one more carrier, but can Verizon and Apple come to terms?

Fortune cites a Kaufman Bros. note to clients from analyst Brian Wu saying Apple will need to look beyond AT&T 's 90 million subscribers for new buyers. Verizon's 93 million customers would bring big numbers, but Big red is not Apple's only choice. Sprint has 48 million subscribers and has been trying to turn a tide of subscriber loss. T-Mobile brings 34 million subscribers to the table with its well received customer service.

The Verizon iPhone well is primed.

Market research firm Morpace released data purporting 51 percent of current Verizon customers are likely to purchase an iPhone if the carrier offers the device. The results confirm previous data from ChangeWave which surveyed more than 4000 customers to find that 53 percent would purchase a Verizon iPhone.  Morpace's survey also revealed that nearly 25% of current AT&T subscribers would seriously considering switching to Verizon if the iPhone makes it to the wireless company's line up.

It is widely believed a Verizon iPhone will greatly benefit Apple. Analyst Brian Marshall of Gleacher & Co. figures that Verizon could sell as many as 11 million iPhones next year.

So why would it be so hard for Apple and Verizon to agree on terms? AT&T is estimated to pay Apple around $600 per iPhone which is significantly more than what carriers typically pay for devices from other manufacturers.

It would seem Apple needs Verizon more than Verizon needs Apple. Since Verizon is competing well on its Android wares, it may not be so quick to pay the Apple tax. Also, could Verizon sense pressure from other suppliers? Motorola and HTC have developed fantastic Android smartphones for Verizon available at very reasonable prices at a staggering rate.

Verizon could have a difficult path to navigate as it tries to balance all of its concerns and needs.

Adding more fuel to the Verizon iPhone buzz, technology blog Boy Genius Report claims that code within iOS4 points to field testing for the next generation iPhone and iPad devices that are rumored to debut on Verizon this January. Some have doused this report saying similar code has been seen before, but was removed closer to or at production.

We remain skeptical of reports that a refreshed Verizon iPhone will appear with a faster processor and larger screen, but we'll entertain this briefly...with salt. If this were to be true, it could be a tactic to ensure Verizon a first day sales frenzy that might not occur if the device were to join the carrier as it exists now.

Whoever the device being developed is for, Daring fireball reports it is still a couple of steps short of production status.