By Philip Elmer-DeWitt
October 7, 2010

Wednesday’s leak didn’t go far enough, so someone filled in the blanks overnight

Wall Street Journal
story that moved on the business wires Wednesday afternoon was supposed to be big news.

Apple (AAPL), according to Wednesday’s item, was about to start mass-producing an iPhone that could run on Verizon’s (VZ) cellular network, which is built around a technology called CDMA and not the GSM protocol AT&T (T) uses .

But the item didn’t actually say that Verizon would be allowed to sell the new phone, which made it the same unsatisfactory story the same reporters filed six months earlier. (See What is a ‘Verizon-ready’ iPhone?)

Apparently that didn’t do whatever the Journal‘s source (Apple? Verizon? Who knows.) was hoping to accomplish. So overnight, some key blanks in the original piece were filled in, and the version that appeared in Thursday’s paper actually comes out and says what the first one didn’t:

“Apple Inc. is making a version of its iPhone that Verizon Wireless will sell early next year.”

The critical Verizon material added overnight is copied below the fold. For a smart analysis of why it was leaked at this particular point in time, see MG Siegler’s The Impeccable Timing of the iPhone Verizon Rumors.

“Apple Inc. is making a version of its iPhone that Verizon Wireless will sell early next year, according to people familiar with the matter, ending an exclusive deal with AT&T and sharpening the competition with Google Inc.-based phones.

“Verizon Wireless has been meeting with Apple, adding capacity and testing its networks to prepare for the heavy data load by iPhone users, according to one person familiar with the matter. The carrier is seeking to avoid the kind of public-relations hit that AT&T took when the boom in data-hungry iPhones overtaxed its network, especially in New York and San Francisco…

“Apple originally decided against developing a phone for Verizon to focus on a version based on GSM, a more prevalent mobile technology used by AT&T and most mobile operators in the world, people familiar with the decisions have said.

“Verizon, in those earlier discussions, balked at Apple’s requirement that Verizon not allow its retail partners to sell the phone, people familiar with the discussion said at the time. Verizon also declined to give up its ability to sell content like music and videos through its proprietary service, these people said.”

There’s an unsettling ambiguity in that last sentence. Did or did not Verizon finally give up its right to sell content through its proprietary service? If not, be prepared to see the iPhone’s carefully crafted look and feel defaced with some V CAST ugliness.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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