Apple Verizon iPhone Could Blunt Google Android Growth: Analyst

Apple's iPhone on Verizon could blunt the growth of Google Android, according to Piper Jaffray analyst Gene Munster.

Apple's iPhone on Verizon would curb Google Android's explosive growth, according to a new analyst report.

"Android phones outsell iPhones in the U.S., but we believe when Verizon gets the iPhone, that trend could be reversed," Gene Munster, an analyst with Piper Jaffray, wrote in a Dec. 7 research note widely circulated on blogs such as Apple Insider. "As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android."

AT&T currently has an exclusive lock on the iPhone in the United States, effectively curbing the device's market penetration. "The greatest factor in the success of Android has been Verizon," Munster added. "Customers are loyal to their carrier, and once Verizon gets the iPhone, we believe Android's success in the U.S. will be tested."

In a survey released Dec. 6, Consumer Reports named AT&T "the worst-rated cell-phone service carrier," based on responses from 58,000 subscribers. That represented a significant dip for AT&T since the review firm's 2009 survey.

"We take this seriously, and we continually look for new ways to improve the customer service," an AT&T spokesperson told Dec. 6.

Consumer Reports also named AT&T's GoPhone the worst provider in the no-contract category, "receiving relatively low marks for value and voice service."

Rumors suggest that AT&T will lose its exclusive hold on the iPhone sometime in early 2011. In a Dec. 6 research note, Kaufman Bros. analyst Shaw Wu suggested that Verizon may be negotiating with Apple to prevent competitors Sprint and T-Mobile from obtaining their own iPhones.

"We are hearing that [Verizon] does not want iPhone, the hottest selling smartphone, available on T-Mobile USA and/or Sprint and may be willing to pay for exclusivity for itself and AT&T," Wu wrote. "For these reasons, [Verizon] could be more willing to give in to Apple's terms and thus its iPhone economics are likely to remain favorable with the pending launch of [Verizon] in the [first half of 2011]."

Kaufman Bros. expects shipments of 62 million iPhones in 2011, with Verizon contributing 2 million to 3 million units per quarter. Adding Verizon as a carrier could effectively double the iPhone's total available market, doubtlessly a tempting prospect for Apple as it faces competition from not only Google Android, but also Research In Motion's BlackBerry and the new Windows Phone 7.