Market Share, Installed Base

By Don Reisinger  |  Posted 2010-03-30 Print this article Print

5. Market share concerns

The more market share Apple gains, the worse it will be for Verizon (and AT&T for that matter). The only reason Apple might be planning to bring the iPhone to Verizon's network is to increase its market share in the space and hold off any attempts by Google to cut into Apple's share with Android. But is that really good for Verizon? The more iPhones Apple sells, the more money Verizon makes. But it also gives Apple even more leverage. After all, if Apple sells millions of iPhones, Verizon simply couldn't afford to strain its relationship with Apple. The last thing the company needs is to get a new iPhone months after AT&T simply because Apple isn't happy with it. More Apple market share means more Apple power, which can only mean less power for Verizon.

6. Apple's other endeavors

Outside of the mobile market, Apple has done its part to dominate several markets. Along the way, it has made some enemies with companies that it has partnered with. Nowhere is that more evident than in the music space. After partnering with record labels and playing by their rules for awhile, Apple turned the tables once the iPod gained critical mass. The company realized that the record labels needed Apple and its iPod, and it capitalized on that situation. If it can achieve similar results with the iPhone, it might only be a matter of time before Apple turns its relationship with Verizon into a nightmare for the carrier.

7. AT&T's installed base

Although the iPhone will help Verizon, the company needs to be aware that there is a huge installed base on AT&T that might not want to switch to its service. Plus, the market is watered down a bit, since many of the folks who wanted an iPhone already have it. That doesn't mean that Verizon won't see strong iPhone sales-it definitely will-but it does mean that the benefit of being the second iPhone provider isn't nearly as great as being the first provider.

8. iPad conundrum

Lest we forget, the 3G version of the iPad uses AT&T's 3G network to help users connect to the Web away from WiFi. If Verizon decides to ink a deal with Apple, the company needs to work hard to also offer 3G connectivity to iPad customers. Although the iPad won't affect iPhone sales in any way, it does mean that Apple is cozying up to AT&T just a little too much. The last thing Verizon needs is a strong bond between Apple and AT&T. That's just not good for business.

9. The different standard

Due to the iPhone's notoriety, it's held to a different standard than most phones and it's put under a microscope far more often than any other mobile phone on the market. Verizon will need to be careful in how it handles issues that will surely arise with the iPhone. A single misstep, and the company will be forced to deal with the backlash. AT&T hasn't done a very good job of handling iPhone issues. And based on its own track record, it's doubtful that Verizon will be able to do much better. In most cases, carriers simply do what they want with policy changes, and few people notice. But when the iPhone is involved, it becomes a major story. That kind of attention isn't always a good thing.

10. Opportunities beyond Apple

Apple's iPhone is undoubtedly a great phone to offer. It enjoys the kind of attention from consumers that no other phone ever has. But it's not the end-all either. Verizon has been extremely successful without selling the iPhone. And its partnerships with other vendors have proved profitable. In other words, Verizon has found significant opportunities beyond the iPhone. and it might want to explore those more.

The iPhone is a fine device. But it carries with it significant baggage that Verizon might soon find is a costly and uncomfortable burden.

Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Since then, he has written extremely popular columns for, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at

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