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January 11, 2011, 10:04 AM EST
By Adam Satariano and Peter Burrows
(Adds today’s share trading in last paragraph.)
Jan. 11 (Bloomberg) -- Google Inc. may lose business as Verizon Wireless starts selling Apple Inc.’s iPhone, giving the carrier’s customers a new alternative to smartphones running the Android operating system.
Verizon is set to announce plans in New York today to bring the iPhone to its network, according to a person familiar with the matter. A Verizon iPhone may cannibalize about 2 million Android phone shipments a year, said Dan Hays, partner at management consultant firm PRTM. Gartner Inc. says 20.5 million Android devices were sold in the third quarter.
“A lot of people who bought Android phones were buying it in lieu of an iPhone because they couldn’t get one on the Verizon network,” said Charlie Wolf, a Needham & Co. analyst in New York.
At AT&T Inc. -- now the exclusive U.S. iPhone carrier --the device accounted for 80 percent of smartphone purchases in the third quarter, said Gene Munster, an analyst at Piper Jaffray Cos. in Minneapolis. If that’s any indication, many Verizon Wireless customers will pick the iPhone over Android-based devices. Even Verizon’s existing Android users may switch, he said, estimating that as many as half may opt for the iPhone.
Apple would ship about 9 million iPhones this year through a partnership with Verizon, Munster predicted. That’s in addition to 11 million units through AT&T. He estimated that AT&T shipped 15.6 million of the devices last year.
While Apple manufactures and maintains strict control over the handsets that run its software, Google supplies Android to a range of phone makers, such as Motorola Mobility Holdings Inc. and Samsung Electronics Co.
First-Quarter Sales
Android has become a top-seller in the U.S., according to ComScore Inc., accounting for 26 percent of the smartphone market in November, compared with 25 percent for the iPhone. BlackBerry maker Research In Motion Ltd. was first with more than 33 percent.
Tero Kuittinen, an analyst with MKM Partners LP, said sales of Android phones at Verizon in the first quarter may be cut in half as a result of an iPhone introduction. Still, he doesn’t expect the impact to last because the carrier will likely begin promoting its faster long-term evolution network in the second quarter.
Several Android-based LTE-compatible phones are set for release in the first half. An iPhone on the LTE network may not be available until later, said analysts including Kuittinen.
For now, “most of the LTE marketing spend will go to Android,” Kuittinen said.
Trading Up
Apple may do a better job than Google in helping get more Verizon users to switch to a smartphone for the first time, said Carl Howe, an analyst at the Yankee Group, a consulting firm in Boston. About 38 percent of AT&T customers use a smartphone, compared with about 30 percent of Verizon’s, he said. IPhone users’ bills are about $120 a month, compared with about $40 to $80 for users of a regular feature phone, according to Howe.
“If they can get people who are currently on feature phones to upgrade, that would be huge because smartphone users pay a lot more,” Howe said.
Google representatives didn’t immediately respond to requests for comment outside regular business hours.
Google would benefit if AT&T starts to more heavily promote Android devices after losing its exclusivity with the iPhone, Kuittinen said. This quarter, Motorola will roll out through AT&T its Android-based smartphone that sports a so-called dual- core processor, capable of handling more tasks simultaneously. The new handset is likely to be heavily promoted, he said.
AT&T’s Response
“Now that AT&T has an incentive to promote Android more than it’s done until now, Android there will grow,” Kuittinen said. “It’s going to compensate for much of the decline at Verizon.”
AT&T has been cutting prices for the iPhone and upgrading its network to keep customers from switching to Verizon. The company reduced the price of the iPhone 3GS, a generation behind the current version, to $49 last week. The company suffered from customer complaints about dropped calls and slow speeds as traffic from the device overwhelmed parts of its network.
Even if iPhone software gains ground in the U.S., it may lose share globally as consumers abroad snap up Android-based phones, said Will Stofega, program director at research firm IDC in Framingham, Massachusetts.
Google gained $1.31 to $615.52 at 10 a.m. New York time in Nasdaq Stock Market trading. Verizon Communications Inc., which co-owns Verizon Wireless with Vodafone Group Plc, fell 59 cents to $35.33 in composite trading on the New York Stock Exchange.
--With assistance from Olga Kharif in Portland, Douglas MacMillan in San Francisco and Amy Thomson in New York. Editors: Lisa Wolfson, Tom Giles.
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net.
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
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(Adds today’s share trading in last paragraph.)
Jan. 11 (Bloomberg) -- Google Inc. may lose business as Verizon Wireless starts selling Apple Inc.’s iPhone, giving the carrier’s customers a new alternative to smartphones running the Android operating system.
Verizon is set to announce plans in New York today to bring the iPhone to its network, according to a person familiar with the matter. A Verizon iPhone may cannibalize about 2 million Android phone shipments a year, said Dan Hays, partner at management consultant firm PRTM. Gartner Inc. says 20.5 million Android devices were sold in the third quarter.
“A lot of people who bought Android phones were buying it in lieu of an iPhone because they couldn’t get one on the Verizon network,” said Charlie Wolf, a Needham & Co. analyst in New York.
At AT&T Inc. -- now the exclusive U.S. iPhone carrier --the device accounted for 80 percent of smartphone purchases in the third quarter, said Gene Munster, an analyst at Piper Jaffray Cos. in Minneapolis. If that’s any indication, many Verizon Wireless customers will pick the iPhone over Android-based devices. Even Verizon’s existing Android users may switch, he said, estimating that as many as half may opt for the iPhone.
Apple would ship about 9 million iPhones this year through a partnership with Verizon, Munster predicted. That’s in addition to 11 million units through AT&T. He estimated that AT&T shipped 15.6 million of the devices last year.
While Apple manufactures and maintains strict control over the handsets that run its software, Google supplies Android to a range of phone makers, such as Motorola Mobility Holdings Inc. and Samsung Electronics Co.
First-Quarter Sales
Android has become a top-seller in the U.S., according to ComScore Inc., accounting for 26 percent of the smartphone market in November, compared with 25 percent for the iPhone. BlackBerry maker Research In Motion Ltd. was first with more than 33 percent.
Tero Kuittinen, an analyst with MKM Partners LP, said sales of Android phones at Verizon in the first quarter may be cut in half as a result of an iPhone introduction. Still, he doesn’t expect the impact to last because the carrier will likely begin promoting its faster long-term evolution network in the second quarter.
Several Android-based LTE-compatible phones are set for release in the first half. An iPhone on the LTE network may not be available until later, said analysts including Kuittinen.
For now, “most of the LTE marketing spend will go to Android,” Kuittinen said.
Trading Up
Apple may do a better job than Google in helping get more Verizon users to switch to a smartphone for the first time, said Carl Howe, an analyst at the Yankee Group, a consulting firm in Boston. About 38 percent of AT&T customers use a smartphone, compared with about 30 percent of Verizon’s, he said. IPhone users’ bills are about $120 a month, compared with about $40 to $80 for users of a regular feature phone, according to Howe.
“If they can get people who are currently on feature phones to upgrade, that would be huge because smartphone users pay a lot more,” Howe said.
Google representatives didn’t immediately respond to requests for comment outside regular business hours.
Google would benefit if AT&T starts to more heavily promote Android devices after losing its exclusivity with the iPhone, Kuittinen said. This quarter, Motorola will roll out through AT&T its Android-based smartphone that sports a so-called dual- core processor, capable of handling more tasks simultaneously. The new handset is likely to be heavily promoted, he said.
AT&T’s Response
“Now that AT&T has an incentive to promote Android more than it’s done until now, Android there will grow,” Kuittinen said. “It’s going to compensate for much of the decline at Verizon.”
AT&T has been cutting prices for the iPhone and upgrading its network to keep customers from switching to Verizon. The company reduced the price of the iPhone 3GS, a generation behind the current version, to $49 last week. The company suffered from customer complaints about dropped calls and slow speeds as traffic from the device overwhelmed parts of its network.
Even if iPhone software gains ground in the U.S., it may lose share globally as consumers abroad snap up Android-based phones, said Will Stofega, program director at research firm IDC in Framingham, Massachusetts.
Google gained $1.31 to $615.52 at 10 a.m. New York time in Nasdaq Stock Market trading. Verizon Communications Inc., which co-owns Verizon Wireless with Vodafone Group Plc, fell 59 cents to $35.33 in composite trading on the New York Stock Exchange.
--With assistance from Olga Kharif in Portland, Douglas MacMillan in San Francisco and Amy Thomson in New York. Editors: Lisa Wolfson, Tom Giles.
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net.
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
Webmaster Forum | SEO Forum | Coding Forum | Graphics Forum</b>