Saturday, January 15, 2011

Verizon iPhone to Curb Android Sales, but How Much?

Most high-tech analysts in the free world agree the CMDA-based Verizon iPhone 4 will impede both AT&T's iPhone sales and the growth of Google Android handsets on Verizon Wireless' network. Few agree, however, on just how much Android will be affected. EWEEK found some analysts who have some insight into the Verizon iPhone speculation.
Gleacher Co. analyst Mark Mckechnie, who estimated Verizon accounted for 7 million of the 14 million Motorola Android phones shipped in 2010, said that number will likely fall to 5 million through 2011.
That's quite a hit, but not catastrophic, particularly one when one considers Samsung sold 10 million Galaxy S Android units in just half a year. Remember that HTC, Sony, LG and others also make Android models for all four U.S. carriers.
Many analysts expect Verizon to ship 9 million to 15 million iPhone 4s this year, minus the benefit of a full year of sales because the device won't hit stores until Feb. 10.
Yankee Group analyst Carl Howe is going with 16.5 million Verizon iPhone 4s sold in 2011. However, Howe also believes that despite the cachet of Apple and its iPhone, Android will weather the Verizon iPhone storm well on sheer diversity of handsets.
"Android provides a lot of choices that Apple doesn't," Howe told eWEEK. "Want a hard keyboard? You're not going to be buying an iPhone. Want a 4G device? Not available on the Apple platform today. There are still lots of ways to differentiate other than with the OS."
Forrester Research analyst Charles Golvin takes a slightly dimmer view of Android's prospects as a result of the Verizon iPhone coming to the market
Golvin believes that the majority of Verizon's iPhone sales will be to its existing customers, some of whom may be trading in their Blackberry or Droid to get an iPhone.
"It's also reasonable to assume that a high percentage of those who will migrate from Sprint, T-Mobile, and smaller carriers are already carrying a phone running another smartphone platform," Golvin said. "All told, this means that Android will see some actual losses in share as well as lost sales opportunities."
However, Golvin has some caveats to keep Android from sliding to far. For example, the flagship devices from T-Mobile and Sprint are fueled by Android, and LG, Dell, Sony Ericsson, Sanyo and others are all getting into the Android handheld market.
Most importantly, he said Verizon will maintain a strong commitment to Android. "They have strategic benefits like customizing the UI, operating their own store, and promoting their own apps that are simply unavailable with Apple."
Moreover, he believes the iPhone 5 won't integrate LTE, while all of the handsets that Verizon will be promoting for its new network will run Android. The Motorola Droid Bionic, HTC Shift and Motorola Xoom tablet will all tap into Verizon's 4G LTE network later this year.
Verizon itself acknowledged that while there will be some cannibalization of Android by the iPhone, many people will stick with their Droids. A spokesperson for the company told eWEEK:
"You may have some customers who will switch from an Android phone to an iPhone but we will also have many who are perfectly satisfied with the device they are using. One of the advantages we have is our stores will be stocked with both so customers can not only look but touch before making their decision."
Yankee's Howe added that there's room for Apple, Android, RIM platforms, if not more, such as Microsoft Windows Phone 7.
"After all, the global market for cars is smaller than mobile phones, and we have hundreds of automobile manufacturers worldwide," Howe observed.

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