My reading of the situation is Verizon is probably trying to talk Apple down from their hefty iPhone hardware margins. Verizon doesn't want to subsidize a $600+

My reading of the situation is Verizon is probably trying to talk Apple down from their hefty iPhone hardware margins. Verizon doesn't want to subsidize a $600+ device. They would much rather subsidize it at $400 and make more money for themselves. Verizon's public support of Android is a way for them to test the waters. If Android sales are good and begin to impact the iPhone's sales in the next few months Verizon could very likely get a compromise from Apple -- at least they'd have a shot at it. If Android fails to captivate and doesn't stop customers jumping to AT&T they will have to accept Apple's terms. Most likely the two parties compromise somewhere in the middle because both parties will benefit greatly. If Verizon & Apple can't work out a deal I do think Sprint is a very good possibility. I don't think Apple has to sell all that many CDMA iPhones to make it a profitable move. The other possibility is Apple will go the vindictive route and simply sell an unlocked CDMA iPhone directly at the same subsidized price Verizon wanted in the first place. This way Apple still makes a good hardware profit, reaches customers outside of AT&T's 3G coverage, and still sticks it to Verizon a little. Verizon would certainly benefit from this also but not as much. The hardware subsidy is secondary to the lucrative 2 year up-sold contract requirement Verizon would be missing out on. How many folks would jump ship from AT&T and get an iPhone as data-only on Verizon? or voice only and use wifi? Lots I think. That hurts AT&T, it hurts Verizon, but not Apple.