Verizon iPhone Looks Like Bad News for Motorola: 10 Reasons Why

By Don Reisinger  |  Posted 2010-08-16

Verizon iPhone Looks Like Bad News for Motorola: 10 Reasons Why

The talk over Apple's iPhone coming to Verizon's network won't go away. More and more reports are piling up, claiming that the device will be landing on Verizon's network in January. If and when that happens, the market will be a much different place. Millions more customers will have a chance to get their hands on Apple's smartphone. And all the devices that currently enjoy success on Verizon's network could be in trouble.

One of those devices is Motorola's Droid X. Widely regarded as the best alternative to Apple's iPhone, the Droid X boasts a big, 4.3-inch display, a 1GHz processor and some of the best entertainment functions of any smartphone on the market. It's supported by the Droid 2, another fine iPhone alternative to Motorola. For now, both devices are enjoying relative success.

But Motorola's success in the mobile market could be short-lived when Apple's iPhone arrives on Verizon's service. The carrier will focus its efforts on Apple, the market will buy into the hype, and all the while, the Droid X and Droid 2 could flounder on store shelves. Simply put, a Verizon iPhone would be bad news for Motorola. Here's why:

1. Verizon would go elsewhere

If the iPhone comes to Verizon's network, expect the carrier to focus all of its efforts on Apple. Whereas Verizon currently helps to promote and support Motorola's smartphones, an iPhone running on its network would change all that. To some extent, the change makes sense. Apple's iPhone would be the biggest release on Verizon's network in years. And it would undoubtedly take the sales lead. Why wouldn't Verizon want to work hard to make the iPhone an unbridled success? 

2. The hype would be overwhelming

Considering Verizon customers have been waiting for an iPhone for four generations now, the hype surrounding the device would undoubtedly drive unprecedented demand for the smartphone. That, in turn, could significantly hurt demand for Motorola's smartphones. All the customers who might have purchased a Droid X would turn to Apple's smartphone instead. The hype following the Verizon iPhone's announcement could single-handedly take out Motorola's smartphone efforts. 

3. It's heavily invested in Verizon

Motorola has become heavily invested in Verizon. Because AT&T has the exclusive rights to the iPhone, Verizon needed to find a viable alternative for its customers. It did so with the Droid and the Droid X. And so far, Motorola has reaped the rewards of that. But by putting so many of its eggs in Verizon's basket, it's leaving itself wide open for problems when the iPhone comes to the new carrier. That's not a good thing. 

4. Apple would make the Droid X look bad

Make no mistake that Apple has the unique ability to make the competition look bad. When the iPhone was first launched, AT&T displayed it prominently in stores. Consumers were then able to compare, say, a BlackBerry's functionality with the iPhone's. Upon doing so, they fell in love with Apple's smartphone. The same will undoubtedly happen at Verizon stores. When consumers need to renew their contracts and compare a Droid X to an iPhone, they will pick the latter every time. The Droid X is great, but it's not an iPhone.

Motorola Has Few Options in Competition with iPhone


5. It would become the other smartphone

Following that, it's entirely possible that the Droid X or the Droid 2 will become the other smartphone that consumers buy if they don't want to an iPhone. As nice as Apple's smartphone is, there are some people who have no desire to buy a product from Apple. Those folks will opt for the Droid X. Those who want the best smartphone on the market will choose Apple's iPhone. And unfortunately for Motorola, those who want the iPhone far outnumber those who don't. 

6. It has no influence elsewhere

By making the Droid 2 and the Droid X available exclusively to Verizon, Motorola has effectively left itself open to Apple's onslaught. Motorola chose Verizon. And by doing so, it decided against other carriers. At the time, it seemed like a smart idea. But now, the company has such little influence with other carriers, it will likely have no recourse but to hope its smartphones hold their own against the iPhone if Apple brings its smartphone to Verizon's network. Unfortunately for Motorola, the chances of that seem slim. 

7. The advertising would fail

Motorola's advertising efforts have been outstanding over the past couple years. But most of its ads have highlighted the fact that Apple misses out on a few key features. With the iPhone 4, it's tough to find many areas where the Droid X beats Apple's smartphone. The biggest issue standing in Apple's way is that it's available exclusively to AT&T. For most customers, that's the only problem with the device. If Apple's iPhone comes to Verizon, Motorola's advertising efforts would fall flat. The company could say that the Droid X has a nicer screen, but in the end, the one issue consumers really cared about would have been solved. 

8. Market share would slip

From a business perspective, Motorola's operation would get hit hard by a Verizon iPhone. Right now, the handset maker is enjoying increasing market share, as more and more consumers pick up the Droid 2 and the Droid X. But with more iPhones available to customers, expect Motorola's market share to slip. And when that happens, it will be extremely difficult for the company to rebuild. 

9. Google would focus efforts elsewhere

Google has been focusing most of its efforts with Motorola, due to the success of the Droid and the Droid X. But when Apple's iPhone makes its way to Verizon's shores, it won't be long before Google sees the writing on the wall and starts focusing more of its efforts elsewhere. Motorola has little chance of beating Apple's iPhone on Verizon's network. And Google, as a software provider, needs to focus on devices that have the best chance of competing. That could be an HTC device, or something else from another company. But it certainly won't be Motorola's smartphones. 

10. AT&T is the only other viable option

When one looks at the mobile market today, it quickly becomes clear that two companies-AT&T and Verizon-are performing well. Sprint-Nextel seems lost, and T-Mobile is the also-ran in the space. Realizing that, Motorola really has only one option-to bring its smartphones to AT&T. But by doing so, it's once again pitting its devices against Apple's iPhone. Simply put, Apple has all the bases covered. And that will only further hurt Motorola's bottom line.

Rocket Fuel