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Verizon Loses Ground to AT&T's iPhone as RIM and Palm Fade

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Asymco's Horace Dediu offers an interesting analysis of new data on Verizon's smartphone device sales over the past year, concluding that, despite a growing Android platform, Verizon finds itself in a position in which it may have had little choice but to accept Apple's terms to bring the iPhone to the carrier.




Dediu's analysis is based on that fact that sales of Android and Windows Mobile smartphones at Verizon have grown only slightly faster than the rate at which sales of Research in Motion's BlackBerry and Palm's webOS devices have fallen so far in 2010, yielding an overall sales growth rate for Verizon far short of that seen with the iPhone on AT&T. But even Android by itself (and a small fraction of sales for Windows Mobile devices that can't be separated out from the Android data) isn't selling as well or growing nearly as quickly on Verizon as the iPhone is on AT&T.
In an apples-to-apples comparison, in Q3 the iPhone at AT&T outsold Android at Verizon (remember, same addressable market) by a factor of 2.5. This is with a variety of devices and vendors thrown in the market. We hardly ever get to see this finely grained a comparison when looking at platforms.



Analyzing the data on a month-by-month basis reveals an even sharper trend of a steep drop in Verizon smartphone unit sales since August as a diversifying range of smartphone vendors have been unable to sustain overall handset sales for the carrier in the fact of the iPhone 4 on AT&T.

Dediu concludes that Verizon has likely been forced to reconsider its 2009 strategy that saw the carrier betting on Android to slow the trend of customers defecting to AT&T for the iPhone. That change of heart coming with the realization that the iPhone is continuing to steal growth from Verizon's offering may have been responsible for the carrier finally sitting down with Apple to get a deal done for a Verizon iPhone.

Of course, there has been much rumor and speculation about AT&T's exclusivity period for the iPhone, which almost certainly played a significant role in the timing of negotiations between Apple and Verizon, but if the sales data presented in the new report is true, it represents an interesting look at Verizon sales figures that suggest that the carrier may truly need to offer the iPhone if it wishes to fight off AT&T's iPhone-driven momentum in the smartphone market.

Article Link: Verizon Loses Ground to AT&T's iPhone as RIM and Palm Fade
 

todd2fst4u

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Jul 13, 2008
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cliff notes:
MacRumors said:
Verizon finds itself in a position in which it may have had little choice but to accept Apple's terms to bring the iPhone to the carrier.
blah blah blah
 
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ten-oak-druid

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Once the iphone is available on other networks in 2012, the iphone will dominate the US market. Anyone who wants a smart phone, wants the original; the iphone. Some refuse to admit it though.
 
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croooow

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Verizon finds itself in a position in which it may have had little choice but to accept Apple's terms to bring the iPhone to the carrier

When I first read that, I thought Apple was able to demand that Verizon start carrying the iPhone, but now I see that if Verizon wants the phone they have to accept Apple's conditions.

I guess that Verizon wants a large piece of the app store action and perhaps V branding on the device (That red check mark thing) and Apple said "No"
 
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ten-oak-druid

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Have you noticed Apple's competitors try to sell their devices on the ability to use Flash? I saw that and couldn't stop laughing. That is supposed to be the selling point? Flash is either going to die or get better. If the latter, then apple will allow it and we can all thank Apple for making adobe fix it.
 
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Cleve

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Jun 7, 2007
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Data inaccurate

I got this from a guy at ITG saying the data was just an analyst guess and might not represent actual numbers:


We would like to correct some assertions in your Verizon post.

ITG Investment Research did not and does NOT receive any material nonpublic information from Verizon or any other company we cover.

The information you were referring to comes from point-of-sale data at independent wireless retailers across the United States. To be clear, we do not misappropriate or improperly obtain nonpublic information.

Our methodology is explained in more detail here: http://www.majesticresearch.com/index.php/research/telecom_handset_manufacturers

The original blogger who made the false claim about a "leak" has corrected their post - see here: http://www.asymco.com/2010/12/13/verizon-strikes-out/

We would be grateful if you would address this matter, as the incorrect speculation that we would obtain and publish material non-public information from a public company is a serious matter.

Please let me know if you have any additional questions.


Regards,​
 
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Xavier

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When I first read that, I thought Apple was able to demand that Verizon start carrying the iPhone, but now I see that if Verizon wants the phone they have to accept Apple's conditions.

I guess that Verizon wants a large piece of the app store action and perhaps V branding on the device (That red check mark thing) and Apple said "No"

This goes back to when Verizon denied the iPhone originally. Verizon wanted to have control over it, and Apple didn't want that. The App Store would be under Verizon control. And if you look at any of Verizons mobile stores, they are not very good.
 
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Xavier

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Have you noticed Apple's competitors try to sell their devices on the ability to use Flash? I saw that and couldn't stop laughing. That is supposed to be the selling point? Flash is either going to die or get better. If the latter, then apple will allow it and we can all thank Apple for making adobe fix it.

Yes, I am laughing at this too! And if there are any other people out there like me, I hardly use flash, and definitely not daily.

What a terrible selling point.
 
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alent1234

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Jun 19, 2009
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verizon isn't in the phone business, it's in the accessories business. they make money selling wires that cost a penny to make for $30 when you buy a new phone and then changing the plugs every new phone generation

and what's the dollar value of the market share that VZW has? isn't it better to have more dollars than more volume? AT&T hasn't exactly made a lot of money with the iphone either due to subsidies and network upgrades
 
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guitargoddsjm

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I guess that Verizon wants a large piece of the app store action and perhaps V branding on the device (That red check mark thing) and Apple said "No"

Exactly. Verizon probably wants/wanted control over branding, preloaded apps, the appstore, etc. Personaly, I don't care whether or not Verizon gets the iPhone, as long as they don't turn it into the vPhone. I do think AT&T has the better (faster) data network, and where I spend 99% of my time, I have perfectly good coverage. I think Verizon getting the iPhone would be great, as people would flock over there and stop congesting the AT&T network.

As evil as people make AT&T out to be, Verizon is just as bad, if not worse. They have ruined every (potentially) good handset they sell by locking them down with branding and useless apps. For example, my girlfriend was complaining to me last night about her Droid Incredible, which is supposed to be a decent phone. There is an app that charges $2/mo to see the city/state of someone when you receive a call. It was preloaded onto the phone, and when the trial ran out (she thought it was just a feature of the phone), it started bugging her about it. Problem is, she can't remove apps that were preloaded by Verizon & the manufacturer. The same thing goes for visual voicemail, it's a service you have to buy from Verizon. That's why the best android phones are the Google-developed ones (i.e., the Nexus models), as they're stock android and don't have restrictions.

Anyways, this is what prevented Apple from going to Verizon in the first place. Verizon wanted control over the handset, experience, branding, etc. The iPhone wouldn't be where it was today if it weren't for AT&T's willingness to let Apple take control. If this report is correct, that means Verizon customers may receive a true iPhone, not the Verizon-bastardized version.

-- Just my 2 cents.
 
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iOrlando

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Once the iphone is available on other networks in 2012, the iphone will dominate the US market. Anyone who wants a smart phone, wants the original; the iphone. Some refuse to admit it though.

They refuse to admit it because they are invested in other products. If you just spent $200 on android and are are tied down for 2 years, it would be hard for you to admit that iPhone is popular and the best all-around phone.

Plus denial is a big thing too. There are quite a few people that actually think Microsoft innovates more than Google and Apple. Just nod and walk away.
 
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brendu

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Once the iphone is available on other networks in 2012, the iphone will dominate the US market. Anyone who wants a smart phone, wants the original; the iphone. Some refuse to admit it though.

While I would agree that the iPhone could dominate the US market if on VZ and ATT (hopefully all US carriers though), the iPhone was not the original smartphone. It was the one that redefined the smartphone as we know it, and the first to use a touchscreen properly. But not the first smartphone.
 
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DTphonehome

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Apple needs verizon for growth in the US. Verizon needs Apple to stop the bleeding to AT&T. Quit the foreplay guys, and git 'er done.
 
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johnpaul191

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This makes sense. The Droid phones are selling well, but it's mostly people ditching Blackberries, or other VZW phones as they upgrade. It's an awesome upgrade for a current VZW customer, but it is not causing new subscribers to break down the doors, let alone bring BACK all the people they lost to AT+T because of the iPhone.

I'm on VZW, but don't really have a choice. Long story, but I need a CDMA phone because of the potential interference of GSM phones (mostly EDGE network I realize). Point is I am one of the people that for *whatever* reason can not leave VZW. There are a LOT of us that are on VZW, and would kill for an iPhone.

I have the Droid X right now and am pretty happy with it. Best phone I have ever owned, though that's comparing it to Blackberries and even my beloved Palm Treo650. I think all the excited Droid users were pent up frustrated VZW customers that had nothing better than Blackberries + Palms in the past. Until the Droids, Verizon NEVER had a cutting edge smartphone. Their first attempt at selling one was the miserable Blackberry Storm (I had one of those, ugh). The Droids are great phones, and make a lot of people happy, but there are still a lot of users that want an iPhone. Probably more importantly, there are a lot of iPhone junkies that would love to have an iPhone on Verizon's network, especially if it will be on LTE network.
 
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ten-oak-druid

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While I would agree that the iPhone could dominate the US market if on VZ and ATT (hopefully all US carriers though), the iPhone was not the original smartphone. It was the one that redefined the smartphone as we know it, and the first to use a touchscreen properly. But not the first smartphone.

It is all how you define a smart phone. The iphone was the original smart phone in my opinion. The razor was not a smart phone.
 
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junker

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.... There are quite a few people that actually think Microsoft innovates more than Google and Apple. Just nod and walk away.


So spot on - This made me burst out with laughter! Thanks, I really needed a good chuckle today! This is a common occurance for me...

To add to the discussion, Being an iphone user since version 1, I somewhat look forward to this Verizon adaptation and market diversification, but I wish all providers were included: Sprint (vowed to never use again because of bad experience), T-Mobile, etc...
 
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elhungarian

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johnpaul191 said:
This makes sense. The Droid phones are selling well, but it's mostly people ditching Blackberries, or other VZW phones as they upgrade. It's an awesome upgrade for a current VZW customer, but it is not causing new subscribers to break down the doors, let alone bring BACK all the people they lost to AT+T because of the iPhone.

I'm on VZW, but don't really have a choice. Long story, but I need a CDMA phone because of the potential interference of GSM phones (mostly EDGE network I realize). Point is I am one of the people that for *whatever* reason can not leave VZW. There are a LOT of us that are on VZW, and would kill for an iPhone.

I have the Droid X right now and am pretty happy with it. Best phone I have ever owned, though that's comparing it to Blackberries and even my beloved Palm Treo650. I think all the excited Droid users were pent up frustrated VZW customers that had nothing better than Blackberries + Palms in the past. Until the Droids, Verizon NEVER had a cutting edge smartphone. Their first attempt at selling one was the miserable Blackberry Storm (I had one of those, ugh). The Droids are great phones, and make a lot of people happy, but there are still a lot of users that want an iPhone. Probably more importantly, there are a lot of iPhone junkies that would love to have an iPhone on Verizon's network, especially if it will be on LTE network.

Tell me about it. I'm at 2+ yrs with this POS BB storm. But wanted to hold out for Verizon iphone. Not sure if I can wait till June. All I can say is if vzw doesn't get iphone by mid next year I'm buying an android. Would really prefer early next year. Heck I'd take a cdma iphone 4. Let alone iphone 5.
 
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Popeye206

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I don't see this as an iPhone vs the world thing. I see this as Verizon is getting some hefty competition.

Sorry Verizon fans, but they are not perfect either. I've had them before and they have their issues too. But I think other companies are marketing heavily and it's taking business. Plus, I think we've seen the spike in Droid phones. Fans ran out of them and now it's coming down to normal sales levels. That's all.

The real loosers here.... RIM, PALM, Nokia... they need help! They are loosing to Apple and Droid phones. Like it or not, but sexiness sells and there is nothing sexy about a BB or Palm device.
 
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guitargoddsjm

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It is all how you define a smart phone. The iphone was the original smart phone in my opinion. The razor was not a smart phone.

Of course it wasn't, nobody said that it was. The pre-iPhone smartphone market was dominated by RIM (blackberry), Palm, Nokia, and Motorola.
 
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croooow

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...I hardly use flash, and definitely not daily.

What a terrible selling point.

I do agree that most people don't care about Flash, but I do think people do care about sites not working on the iPhone, Remeber Steve Job's intro to the iPad and the "blue LEGO" brick we all saw on NYT.com?

This has gotten a lot better since 2007, web masters know there are a lot of iOS devices out there and adjusted their sites. If a site doesn't work on an iPhone/iPad because of Flash, then Apple's competitors do have a point.
 
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vincenz

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Once the iphone is available on other networks in 2012, the iphone will dominate the US market. Anyone who wants a smart phone, wants the original; the iphone. Some refuse to admit it though.

There have been plenty of smartphones prior to the iPhone era.... You can say the iPhone is the one that has changed the industry, but to call it the "original" is stretching.

Anyone think maybe the tanking numbers for VZW is caused by people who are currently waiting for the iPhone to inevitably be announced so they can purchase?
 
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DTphonehome

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I would argue that the first mass-market smartphone was the Palm Treo.
 
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bigjnyc

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The iPhone is a beast ha-ha it has been carrying the dog that is AT&T around, and has fought off the Android Blitz whoring themselves to every manufacturer and carrier in America lol.
 
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Lesser Evets

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None of these "smart phones" are particularly useful to me, and they are a hassle to use. If the iPhone wasn't an iPod touch as well, I'd just get the most simplified mobile phone possible. That's probably a unique position to take these days.
 
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