Bloomberg News is reporting that the iPhone is coming to Verizon in January. Research in Motion shares were getting crushed on the news in the pre-market. This will also be a net negative for AT&T as well since Apple has been under pressure to move away from AT&T exclusivity due to AT&T’s poor coverage and dropped calls (see Apple iPhone 4: Great But Needs New Network). Expect people to switch away from AT&T irrespective of two-year contracts. Moreover, I suspect that AT&T has a really good revenue share deal with Apple and this is going to hurt margins.
Given the robust sales of the iPhone 4, this should be a boon to Apple as Verizon has the largest network in the US. It also finally puts the Android Menace in check as Verizon has been releasing a bevy of new Android phones. This is the best news I have heard from Apple in a long time – more important than either the iPad or iPhone 4. Verizon (and Vodafone) should benefit of course as they now have another sales point for customers – and analysts suggest it could mean 12 million new handset sales per year.
Where is Sprint in all this? I see Sprint as the biggest loser unless they can get on the bandwagon here because all the other US carriers have iPhones in their product palette (T-Mobile through unlocked GSM iPhones). Since the mobile phone market has finally matured in the U.S., carriers’ net subscriber additions will increasingly come from other carriers. So, if someone like Verizon is expected to gain a lot of subscribers, someone else will probably lose a good deal too. I expect the losers to be AT&T and Sprint.
While I still think Apple’s competing as one manufacturer against an Army of Android platform manufacturers is a tough road to hoe, even Research in Motion has been able to keep up Smart Phone market share using this model. Let’s see how many inroads Android makes before January comes and what impact this has.
Two related videos below. Enjoy.