UBS: iPhone to be dominant device on Verizon at launch

An analyst with UBS AG says Apple's Verizon iPhone will immediately become the carrier's top model, eating up sales of other devices, including Android licensees and RIM's BlackBerry.

John Hodulik, in an interview with Bloomberg, said his firm predicts Verizon will sell as many as 13 million iPhones this year, "largely because of pent-up demand from existing customers."

"It’s going to be the dominant device at Verizon as soon as it’s launched, and, I think, cannibalize the other devices they sell,” Hodulik said.

Verizon will provide Apple access to 93.2 million customers, although Verizon has a smaller mix of smartphone users compared to AT&T. Availability of a compatible iPhone may help change that mix for Verizon, which hopes to upgrade a larger percentage of its subscribers to data plans.

Apple has successfully helped AT&T to gain and retain new smartphone customers since launching the iPhone exclusively with that carrier in the US back in 2007. Doing the same thing at Verizon could allow Apple to vastly increase its iPhone sales without major losses at AT&T, which has expressed confidence that it can retain its existing users.

If Verizon can sell 13 million iPhones for Apple this year, it would give Apple an additional $5.2 billion in sales, Hodulik estimated. Apple's stock closed today at $342.45, jumping over 6 points today as Verizon talk reached a fevered pitch.

Last year, Verizon worked to counter the iPhone by promoting phones based on Google's free Android OS. That strategy had replaced the company's focus on RIM's BlackBerry in 2009, and appeared to be successful until the release of iPhone 4. After that, Verizon appeared to see dramatically flatter growth from Android, which seems to have prompted the carrier to partner with Apple on the iPad and begin talks on carrying the iPhone.