Summary
The recent aggressive posture of Verizon Wireless in pointing out the limitations of the iPhone could simply be typical competitive marketing as they push their handsets in advance of Storm2 and possibly Droid or they could be a subtle acceptance that it is hard to convince Apple to deliver their system on an alternate network (CDMA).
Analysis
Verizon is getting aggressive with the iDont campaign. This could be just posturing since Verizon has a few new high terminals coming out soon with Storm 2 and possible Droid. As a competitive marketing push they identify real differences but every weakness listed in the video is addressable by Apple using existing technology as they iterate to a next hardware design.
Lack of Multitasking and background apps are solved as they move to a new processor generation and use their existing OS better. 100% certain they will do this within 2 generations. We have already seen the Palm PRE take advantage of better CPUs so there is no reason to think Apple will not be able to.
Limited camera resolution and illumination. Handset cameras are off the shelf so there is no limitation in Apple moving to a better camera and including LED flash.
Limited Open Development, Widgets and customization. Apple is a very developer friendly, just different than Google or others. There is no real fully open system just different developer ecosystems. One could argue that the best measure of openness is the number of applications available and on that count Apple wins big.
Battery not modular. This is annoying and true but can be changed in new versions of hardware. This is one area where Apple does not seem to get it. Customers hate this and fixing it isn't a huge issue except in the industrial design and style sense.
All of the above are distractions, not sustainable differences. The real issue is that Verizon is possibly running into the age old issue of CDMA network operators in that they represent about 20% of the market so convincing handset makers to adopt their technology is an uphill battle. To create a CDMA iPhone, the wireless design would clearly be different, using a Qualcomm part instead of Infinion is a big change. It also could impact the cost and battery life of the phone in a meaningful way but that is speculation. The bottom line is that while Verizon has been very good at getting top handsets on their network, the value to a global handset design in adding CDMA is limited.
One can only speculate on the real issue but clearly building a CDMA iPhone is not the easiest path to market expansion for Apple. If they want more subscribers, just continue to sign up more GSM/UMTS operators using the existing designs (in the US this would include T-Mobile for example) and only when you exhaust that path invest in a new hardware design.
Long term though, the commonality of LTE between CDMA and GSM ecosystems, means that Apple would probably be most efficient trying to focus on early LTE share as that design would be truly universal. The downside would be that those networks wont be widely deployed for a few more years so the question for Apple is if the cost to support CDMA now is a better bet than to enhance an existing design, make sure they are well positioned for LTE, and expand their reach with the existing designs in the GSM/UMTS carriers.
The bottom line is that a CDMA iPhone would sell well through Verizon and other operators, that is not the issue. Rather, has the value of such a device exceeded the value of continued focus on GSM/UMTS versions, a future LTE opportunity and the many other activities Apple is focussed on now? I would never underestimate Verizon ability to influence the handset ecosystem as they have done a spectacular job to date in the CDMA handset space. But until we see a CDMA iPhone it is most likely due to the complexity and cost of modifying the device rather than due to some current shortcoming or feature gap seen in these adds.
