Says Ratcliffe: “Channel checks by our communications equipment and semiconductor research partners give us greater confidence that Verizon will get an iPhone in early 2011, and we are now incorporating that belief into our models for AT&T and Verizon.”

Interestingly, Ratcliffe doesn’t see the end of AT&T’s iPhone-exclusivity deal with Apple (AAPL) heralding a subscriber exodus at the carrier. While he acknowledges that perception issues with AT&T’s network quality will inevitably drive some customers to flee to Verizon, he believes that many will stay put.

All told, the analyst expects approximately 500,000 to one million “switchers,” a relatively small portion of the nine million iPhones he says Verizon will activate in 2011 (click on charts below to enlarge).

“We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T’s network take advantage of the alternative,” Ratcliffe writes.

“Overall, however, we believe that smartphone customers are relatively sticky, particularly given that (a) 70% of AT&T postpaid customers are on family plans (which would necessitate a group switch), (b) switching cost for customers currently in contract would be $375-525 per handset, (c) approximately 40% of handsets are covered under corporate discount arrangements, many of which may not have VZ equivalents, (d) for many, if not most iPhone customers, the service quality being delivered on the AT&T network is in reality comparable to what they’d receive on Verizon’s network, and (e) switching will likely result in accepting a bandwidth-capped data offering, since (we believe) that Verizon is likely to launch tiered bandwidth pricing prior to the launch of an iPhone.”

So, while the expiration of AT&T’s iPhone-exclusivity deal certainly won’t be good news for the carrier, it’s not going to be a disaster. Ratcliffe figures the carrier will still activate six million iPhones in 2011, which is quite a bit fewer than the 10 million he says it will activate this year, but a sizable number nonetheless.

In the past, Apple (AAPL) has said that many more songs will be priced at 69 cents than at $1.29. But that 69-cent bargain bin is viewed as little consolation to some who question the wisdom of introducing what amounts to a 30 percent price increase with the economy in recession and online piracy an easy option.

Said Nine Inch Nails manager Jim Guerinot, “Wouldn’t it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?”

Perhaps. But when has the recording industry ever done anything that made sense?