Verizon's Open Network Initiative - Details Emerge

Verizon Wireless released some more information about it's "Any Device, Any App" or "Open Network" initiative.

Verizon (often abbreviated as VZW) announced earlier this year that it would allow outside manufacturers to make wireless devices for activation on their network.  The device will need to adhere to certain network specifications which VZW will provide.  I'm using the word "device" instead of "phone" because it doesn't have to be a phone.  It could be an mp3 player similar to the iPod Touch.  Just instead of using WiFi to go online to surf or buy songs you'd connect over VZW's network.  Another possibility would be a GPS tracking device that would use the internet connection to report data to a website or a monitoring device. 

As far as phones are concerned, what may be most appealing is that the devices can be activated, online through VZW, without a contract. 

Here's a little more from Reuter's Sinead Carew

NEW YORK (Reuters) - Verizon Wireless, the No. 2 U.S. mobile service, plans to support a "few hundred thousand" devices linked to outsiders this year through its open network initiative, Chief Executive Lowell McAdam said on Wednesday.

...

Under the new project, device makers could sell their products independently of Verizon Wireless, with the option of having the phone company bill customers at the same rates as Verizon Wireless charges its direct customers.

But unlike most Verizon Wireless customers, who commit to a contract for a year or two in exchange for a discount on the price of the phone, the customers of these third party devices would not sign a contract or receive a device discount from Verizon Wireless.

 

The Open Network initiative is an amazingly smart move. VZW is giving its customers (and potential customers) an almost limitless device catalog without increasing their own costs.  They don't have to worry about over-buying the next big handset only to have it flop.  They don't have to spend time educating their sales reps about the new phones because the manufacturer/distributor will be responsible for that.

I know there are probably some people thinking that Verizon will lose money by not selling as many phones.  The thing is that most of the phones sold directly by a carrier are sold at a heavy discount in exchange for signing a contract.  The carrier isn't making their money off of the handset, but off of the service.  Open Network device or not, you're still buying the service, the money maker, from VZW.

Because the Open Network devices can be activated sans contract with a rate plan identical to what a contracted customer would have, it's a move that takes a huge leap into the territory outlined by the Wireless Consumer Protection bill that's currently in draft status.  Verizon's customers will still have the option to get a phone with a contract at a discount or get a full-price Open Network device and go contract-free. 

I've mentioned it before, but I really think that customers will be a lot more comfortable with signing a contract to extend or start service if they know that the contract was a choice instead of the only choice.

A few months back, Sprint also announced that it would allow non-Sprint CDMA devices to be activated on their network, but a timeline and details do not exist yet.