Verizon iPhone Will "Suck The Wind Out of Android's Growth"
It’s long been popular belief that the biggest loser in a Verizon-Apple iPhone deal would be AT&T. Since the iPhone’s debut in 2007, the device has drawn millions of new customers to the carrier and done much to revitalize its brand. There’s no question that AT&T’s iPhone-exclusivity deal was a strategic coup for the carrier and that its loss will be painful, though perhaps not as painful as some have predicted–according to AT&T, anyway.
But there’s another loser in the Verizon-iPhone deal as well: Google. Verizon is an Android stronghold. And one of the main reasons for that has been the absence of the iPhone on the carrier’s network. That’s going to change on February 10. And when it does, expect to see some migration of Verizon Android users to the iPhone.* And that may tip the scale of competition between it and Android in Apple’s favor, particularly as more and more feature-phone users upgrade to smartphones.
“The installed base of smartphone subscribers is a small percentage of the installed based of mobile phone subscribers in the U.S.,” Needham and Co. analyst Charlie Wolf told me. “Just 23 percent of Verzon’s 83 million post-paid subs (Q3 release)….Where the iPhone will have a dramatic impact is on the brand choices of feature phone users migrating to smartphones going forward. The iPhone will suck the wind out of Android’s growth on Verizon.”
Verizon’s original motivation for embracing Android was to offer its subscribers an iPhone-equivalent. Now that it’s able to offer them the real thing, Wolf feels they’ll likely opt for it over competing Android devices.
“With the iPhone soon available on Verizon, we suspect that virtually all of the subscribers migrating from a feature phone to a smartphone will choose the iPhone over one running Android’s operating system,” Wolf explained. “Indeed, the presence of the iPhone on Verizon’s network could accelerate this migration. While phones running the two platforms are priced identically, the iPhone has a brand cachet that overwhelms Android. In addition, the iPhone App Store not only carries a much wider selection than does the Android Marketplace, but the applications themselves are also superior.”
*Interestingly, Verizon’s iPhone FAQ specifically notes that subscribers can exchange recently purchased devices for the iPhone. Makes you wonder how many Christmas-given Droids will be swapped out for iPhones in the days ahead.
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