Analyst: Verizon iPhone Would Have Minimal Impact on Android Vendors

Published on November 17, 2010
by John Paczkowski

The iPhone’s debut on Verizon next year will clearly cause some suffering over at AT&T, which is losing its long-running exclusive on the device. But there are a few other companies that will feel the pain of that transition as well: HTC, Motorola and Research in Motion. Verizon is an important distribution channel for all three, and the eagerly anticipated debut of the iPhone on its network will likely affect them–but not as much as you’d think.

“We see 3 immediate effects of expansion of the distribution of the iPhone at Verizon,” Bernstein Research analyst Pierre Ferragu said in a note to clients today. “A) Migration of existing iPhone users from AT&T to Verizon; B) Some migration of Android users at Verizon to the new iPhone; C) More support to Android from AT&T, as a consequence of the loss of the iPhone exclusivity.”

Worst-case scenario, Ferragu figures Motorola, HTC and RIM will lose 10-30 percent of their business to Verizon. But that loss will likely be offset by new gains at AT&T–at least for Android vendors like HTC and Motorola, for whom Ferragu predicts a 0-30 percent increase in shipments at the carrier. Says Ferragu, “If Verizon starts selling the iPhone, we believe there will not be a visible impact for HTC and a limited one for RIM. If there is a medium term impact on Motorola, we believe that the shortfall will be easily made up in the full year.”

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