The latest is that a manufacturer has a contract to deliver CDMA (Verizon) iPhone 4s to Apple this fall. According to the rumor, it will be right after the September announcement that is scheduled by Apple, and in time for the holiday sales.
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It is possible for a person to replace the AT&T chip with a CDMA chip that will work on Verizon. However, five year contract means little in the business. If it is true that they signed a five year contract, Apple just has to say that AT&T is not able to support the number of iPhones and iPads being sold, and renegotiate. They might have planned on going with Verizon for a second carrier before the intro of the iPhone 4, and AT&T negotiated a 4-6 month exclusive agreement for concessions.