Analyst: Verizon iPhone will derail Android's growth

Following Tuesday's announcement that Verizon Wireless (NYSE:VZ) will launch a CDMA-based edition of Apple's (NASDAQ:AAPL) iPhone in February, most analysts and pundits are debating the move's impact on AT&T (NYSE:T), the smartphone's exclusive U.S. carrier partner since its 2007 debut. But the Verizon iPhone also threatens the continued growth of Google's (NASDAQ:GOOG) Android mobile operating system, according to Needham and Co. analyst Charlie Wolf: "The installed base of smartphone subscribers is a small percentage of the installed based of mobile phone subscribers in the U.S.," Wolf told All Things Digital. "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."

Without direct competition from the iPhone, Android has flourished on the Verizon Wireless network: According to data published by research firm Gartner, Android phones represented between 75 percent and 80 percent of all Verizon smartphone sales in Q3 2010. As of November, Android now accounts for 26 percent of the U.S. smartphone market, a 6.4 percentage points leap over the previous three-month period, per digital research firm comScore--Apple's iOS is close behind at 25 percent market share, up 0.8 percentage points. Research In Motion's (NASDAQ:RIMM) BlackBerry operating system continues to lead the U.S. market at 33.5 percent of subscribers, but its dominance is shrinking rapidly, decreasing 4.1 points over the previous three-month period.

Verizon Wireless will allow existing subscribers to pre-order the iPhone on Feb. 3; the device will be available Feb. 10 for all other consumers. Verizon's iPhone FAQ notes that subscribers can exchange recently purchased devices for the iPhone. Like the iPhone 4 at AT&T, Verizon will sell the 16 GB iPhone 4 for $199.99 with a two-year contract and the 32 GB version for $299.99. The Verizon iPhone will be the same as the GSM version, but will feature the operator's mobile hotspot service, enabling subscribers to broadcast a WiFi network to up to five other devices and connect to them to the Internet via Verizon's network. Apple COO Tim Cook said the agreement with Verizon is a multi-year deal but non-exclusive, which could open the iPhone to Sprint Nextel (NYSE:S) and other CDMA carriers.

For more:
- read this All Things Digital article

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