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Gene Munster with Piper Jaffray on Tuesday sent investors a list of a dozen "unanswered questions" pertaining to Apple. One of those questions he addressed was whether and when the iPhone will become available on the Verizon network.
Munster said he believes Apple has made two key mistakes with the iPhone: not subsidizing the original model (an issue that was quickly addressed), and limiting the handset to AT&T in the U.S. The analyst said he believes AT&T's exclusivity has limited demand for the iPhone in the U.S.
But Munster believes that Apple will make the iPhone available on Verizon's network in the first half of 2011, as the U.S. is the only remaining country out of 89 where an exclusivity agreement is in place. When the iPhone does go to Verizon, he believes it could affect the momentous growth of Google's Android mobile operating system.
"Currently, Android phones outsell iPhones in the U.S., but we believe when Verizon gets the iPhone that trend could be reversed," Munster said. "As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android.
"The greatest factor in the success of Android has been Verizon. Customers are loyal to their carrier, and once Verizon gets the iPhone, we believe Android's success in the U.S. will be tested."
Still, Android is the iPhone's most significant competition in the smartphone space, in Munster's eyes. He said that Research in Motion and its BlackBerry line remain an "important player," but the fast market share gains of Apple and Android make them more direct competitors.
Numerous mainstream media outlets have stated that Apple and Verizon have reached a deal to sell the iPhone on the carrier's CDMA network starting in early 2011. This week, another report indicated that Verizon could even pay Apple to keep the iPhone away from other major U.S. carriers T-Mobile and Sprint.
Munster also said Tuesday that he expects Apple to move toward an increasingly subsidized model with the iPad in the future. He said that AT&T could increase its monthly data plan from $25 per month to $35 per month and decrease the cost of the 16GB 3G iPad from $629 to $389 with a two-year contract.
For both the iPhone and iPad, he said he believes component supplies are improving, which should lead to better stock of both devices around the world. Apple is believed to have ramped up its capacity for both the iPhone and iPad ahead of the holidays, though availability still remains limited in some areas.