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Verizon iPhone Wont Kill Android, BlackBerry

Now that everyone assumes the iPhone will make its debut on the Verizon Wireless network early next year, the topic turns to how others will compete with Apples behemoth.

Theres little doubt that there will be millions more iPhone owners out there when Verizon picks it up, considering the generally positive feeling surrounding Verizons wireless network when compared to the blogosphere bashing that AT&T has taken in the first three years of its exclusive deal for the device. Its natural to assume that the Android operating system which has seen a huge uptick in sales this year might take a step back, right?

Not necessarily, says Bernstein Research analyst Pierre Ferragu. In a new note to clients, Ferragu says smartphone manufacturers like HTC and Motorola wont fare as poorly as you might think. He sees three main things happening when the what-seems-to-be-mythical Verizon iPhone finally happens:

  • existing iPhone owners will make the switch from AT&T to Verizon
  • some Android users on Verizon will swap their phones for an iPhone
  • AT&T will beef up its Android lineup to account for losing iPhone exclusivity

Ferragu sees Motorola and HTC losing somewhere between 10 and 30 percent of their Verizon business, but they should get a lift from new buyers on the AT&T network. AT&T, the analyst says, could see as much as a 30-percent increase in Android phone shipments. He also expects BlackBerry-maker Research In Motion to lose 10 to 30 percent of its business on Verizon, but doesnt give as many reasons for RIM to be optimistic about new customers to replace the old ones. Nevertheless, he lumps the Canada-based manufacturer in with HTC and Motorola, none of which should be too scared.

If Verizon starts selling the iPhone,” Ferragu writes, 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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