Apparently Verizon won’t be able to for the next 5 years. USA Today via AppleInsider is reporting that Apple is barred from producing a CDMA version of the iPhone for at least 5 years. Both Sprint and Verizon utilize CDMA networks. Good business move – and is it just CDMA subscribers who will be missing out?

I would be quite surprised if Apple is truly pleased with this arrangement, as it limits the iPhone’s potential market. Now I’m not questioning the decision to select a GSM network over CDMA. GSM is clearly the more dominant global standard for cellular networks, and thus logical choice for an initial offering. But it’s not just GSM that Apple is locked into, it’s AT&T/Cingular specifically. Where does this leave Apple in its negotiations with other North American GSM providers (T-mobile for example) not to mention what are the international implications of this AT&T exclusive?

Others have been quick to point out that Apple should be selling iPhones direct at Apple stores anyway (ala the iPod.) Not so fast. I actually understand the advantages of working with an established mobile provider like AT&T. Remember, this is Apple’s 1.0 offering in the mobile phone market, and not to knock Apple’s engineering, but AT&T has been at this whole phone thing for a little while longer. Also, if by any chance, there are any technical difficulties, wouldn’t Apple rather all these end-users show up at a local wireless provider store then slam the Apple stores?

Time will tell just how big the iPhone is going to be. My bet is there are many lessons yet to be learned by the folks in Cupertino about the phone business. I’m just looking forward to a time when all the pre-realware hype to about the iPhone dies down and people start reporting real world experiences.