RIM's BlackBerry rapidly lost Verizon share to Android
Looking for a bigger better deal
Despite now having a variety of Android phone models to offer its subscribers from more than four major vendors, Verizon is still expressing a lot of interest in Apple's iPhone.
Analysts have suggested the provider is willing to make significant concessions to Apple in order to be able to carry early next year, with analyst Shaw Wu recently saying in a note to investors that Verizon is believed not only to be accepting Apple's conditions but is also willing to pay extra to keep the iPhone exclusive to it and AT&T, prevent Sprint and T-Mobile from also offering the phone.
That's the strongest indication so far that Verizon is looking beyond Android to back the smartphones its customer want, rather than simply looking to war with Apple or AT&T in dramatic ideological battles.
Verizon has previously shifted its attention from platforms that failed to attract and retain subscribers, particularly ones that, like Microsoft's Windows Mobile, have generated additional costs related to returns prompted by user dissatisfaction. Microsoft's launch of KIN with Verizon this summer was a particularly expensive flop.
Changing of the guard
The rapid fall of BlackBerry at Verizon, foreshadowed by a similar implosion of Microsoft's Windows Mobile (which now accounts for a statistically irrelevant number of smartphone sales there) indicates how quickly customers will leave a mobile platform to adopt something that fits their needs better.
This is particularly notable given that both Microsoft's broadly licensed Windows Mobile and RIM's vertically integrated BlackBerry were historically considered strongly entrenched in business use due to their connections with enterprise server infrastructure and custom software development.
Unlike Windows Mobile or BlackBerry, Android's platform is not protected by ties to enterprise sales. Android itself lacks a variety of features significant to business users, including functional support for Exchange (particularly hardware encryption), 802.1x WPA2 wireless network authentication, corporate proxy servers, Cisco VPNs using certificates, OpenVPN, CalDAV, remote wipe, and managed apps and configurations. Apple has worked to cover those bases for iPhone (and iPad) users, resulting in strong interest from enterprise users.
Android vs iPhone at Verizon
While Android models have offered Verizon a credible alternative to the iPhone during a year when it had nothing else to sell, simply being new and different (and well marketed) isn't enough to maintain customers. This is demonstrated by Palm's tepid launch of its new webOS-based smartphones at Verizon this year. Although Palm's sales were enough to briefly surpass HTC's at Verizon this spring to become the carrier's third largest smartphone vendor, Palm couldn't sustain those sales, and has since tumbled off into irrelevance.
Android is expected to face a significant challenge from Apple's iPhone on Verizon next year. Having access to the iPhone will allow Verizon to lower its customer acquisition costs, as Apple heavily promotes its own products through its retail stores and online. Verizon has so far had to pay for a large portion of Android's promotion in the US itself.
The carrier is also expected to inhale a significant portion of existing iPhone subscribers at AT&T who are dissatisfied with the level of service coverage they currently have, a rare opportunity for the carrier. Apple's iPhone is also proven to retain subscribers and reduce the expensive churn that drives up wireless providers' costs.
Verizon's current Android licensees were once the company's Windows Mobile licensees, and many were also once Symbian licensees. Both widely-licensed platforms have rapidly crumbled since the debut of the iPhone. At the same time, the parallel failure of the Palm OS and the deteriorating share of RIM 's BlackBerry at Verizon also provide warnings to Apple that vertically integrated products that don't keep pace with their competitors won't hold onto their market share either.
On Topic: iPhone
- Eric Schmidt says he uses an iPhone, but claims to prefer Samsung's Galaxy
- Alleged 'iPhone 7' production plates, schematics show no sign of Smart Connector
- New photo purports to show 'iPhone 7' shell with single, raised rear camera opening
- Rumor: Apple prepping as many as 78 million 'iPhone 7' units for launch
- Surge in OLED equipment orders linked to Apple's upcoming iPhones - report