updated 09:15 am EST, Mon December 6, 2010
Verizon iPhone said helped by slow Android, BB6
Verizon's CDMA iPhone may be coming about because of a loss of favor for BlackBerry and likely Android, Kaufman Bros analyst Shaw Wu said in an investment note today. Sources told Wu that Verizon doesn't think the upcoming launch of BlackBerry 6 devices on its network will have a "material impact" on its sales, ruling it out as a savior. The researcher also believed that even Android was leading to a change of heart as its growth has lagged AT&T despite multiple high-profile devices from HTC and Motorola, giving Apple a larger bargaining chip.
The purported insiders also mentioned that Verizon considered the iPhone so important that it was hoping to prevent the iPhone from going to any additional carriers beyond itself and AT&T. No deal was known to be in place, but it might pay for a pseudo-exclusive that would prevent Sprint, T-Mobile and other smaller carriers from getting the iPhone for a set period. Apple might be willing to accept such a deal since the combined carriers would represent about two thirds of all US cellular users.
Unnamed sources also said said the cost of the phone and other carrier terms would be "favorable" and close enough to AT&T that they would be non-factors. The current preference for Android at Verizon and the higher prices of Qualcomm's CDMA chipsets may have triggered price concerns.
Spreading the iPhone to Verizon is expected to have a significant impact on Apple's iPhone sales in the US. The one extra carrier could add two to three million iPhone shipments each quarter in 2011 after factoring in some converts from AT&T, Wu estimated. By comparison, AT&T activated 5.2 million iPhones this summer and could still be the largest iPhone provider in the US, but the results could give Apple considerably more sway in the US and dampen Android's effect.
Regardless of accuracy, the Kaufman Bros report if close to reality could represent a turning point for both Apple and Android. The extension to Verizon is widely believed to reflect Apple's determination to stifle Google's rapid but slightly slowing growth as well as to challenge RIM's doubts on how the iPhone will fare. Google is now nearly even with Apple in US market share but has in part been counting on Verizon as a shelter, since the iPhone's AT&T exclusivity has led to Verizon devoting its full marketing attention to Android. Many customers have also bought an Android phone primarily after refusing to switch to AT&T or having no choice.