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Apple Will Get Killed by Android Without Another iPhone Carrier, Like Verizon

Android is taking over more and more mobile operating system market share, and Apple Inc. ought to be worried.

Thats according to two Bernstein Research analysts who this week urged Apple, in a client memo, to ink an iPhone deal with Verizon Wireless and other carriers. If Apple rescinds its exclusive contract with AT&T Inc., and other providers worldwide, it may have a chance at competing with Googles Android platform, wrote Pierre Ferragu and Toni Sacconaghi, according to reports. But if Apple doesnt act, and soon, Androids base will exceed iPhones in a mere five quarters, Ferragu and Sacconaghi wrote.

To wit, about 200,000 Android-based devices now ship each day  that will total about 53 million Android-based devices this year alone, the analysts said. Apple, on the other hand, is shipping about 230,000 iOS-based devices, which include the iPhone, iPod Touch and the iPad, each day.

Android alone will contribute 25 percent points of [year-over-year] growth to the entire smartphone market,” even if its run rate doesnt change, wrote Ferragu and Sacconaghi.

That statistic, just by itself, ought to scare Apple into action. If that figure wont do it, theres always the latest Gartner report that shows Android surpassing iPhones iOS market share to take the No. 1 spot, just in North America. Steve Jobs, are you freaking out yet?

So which carriers should Apple target? Pretty much all of them. Ferrague and Sacconaghi specifically recommend, though, that Apple end carrier exclusivity in the United States and German, and add iPhone operators in countries such as Japan and South Korea.

The key to arresting Androids momentum will be for Apple to broaden distribution,” the analysts wrote, according to All Things D. We believe that a CDMA iPhone is being developed by Apple and [will] be distributed at Verizon in mid 2011  various data points suggest it could actually be sooner, likely in early 2011. We believe Apple needs to strike distribution deals with these carriers, even if it has to sacrifice some pricing power since doing so would (1) still be accretive to company gross margins; and (2) take away the strong foothold it currently provides to a potentially formidable competitor.”


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