Finally, after 18 months of busted rumors and false starts, Verizon got the iPhone today. Apple fanboys, still stinging from comShare’s November report that Android had passed the iPhone in U.S. market share, are delirious with joy. People who actually get paid to think about smartphone market trends are less sanguine.
“We believe that current estimates of [iPhone's] potential sales are overblown,” said Daniel Hays, who covers telecommunications for consulting firm PRTM. This is sensible, in view of the iPhone 4’s failure to reverse Apple’s market-share losses earlier this year.
Other analysts have pointed out that, now that AT&T has lost its exclusive, they’ll certainly be promoting Android phones more. “Now that AT&T has an incentive to promote Android more than it’s done until now, Android there will grow,” says Tero Kuittinen of MKM Partners LP. “It’s going to compensate for much of the decline at Verizon.” According to the Wall Street Journal, AT&T has already committed to shipping a dozen new Android models this year. This will offset the increase in iPhone sales through Verizon; given AT&T’s market position, it is even possible that Kuttinen is underestimating and the net effect on iPhone volume will be zero or negative.
My prediction is that the Verizon iPhone will prove no more effective than the iPhone 4 was at stemming the progressive weakening of Apple’s market position. It’s too late; the window when Apple could irrefutably claim superior “user experience” began to close with the release of Android 2.2 and slammed shut during the iPhone 4 antenna fiasco.
The coming wave of cheap system-on-a-chip Android phones will crank up the pressure, as the price difference between iPhone and equally capable Android models opens up to three digits in U.S. dollars. Bloomberg reported Apple’s stock slightly down and Google’s slightly up in advance of the announcement, suggesting that investors have already priced in this expectation.
I’ve already spam-binned one attempted threadjacking about this news. I will continue to do that. Comments should be attached to this post and not elsewhere. Content-free flamage will be deleted.