Piper: Android will be 'tested' once Apple brings iPhone to Verizon

Posted:
in iPhone edited January 2014
Android's growth in the U.S. market will be put to the test if the iPhone arrives on Verizon's network in early 2011 as expected, one analyst believes.



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.
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Comments

  • Reply 1 of 77
    Jings - hardly sticking his neck out through wild predictions there...
  • Reply 2 of 77
    melgrossmelgross Posts: 31,341member
    We can look to the articles that show that Android's growth has already slowed or possibly stopped. In August, Schmitt stated that there were more than 200,000 new Android phone activations a day. Now, they just released that Android "devices", including tablets such as the Samsung Galaxy, have an activation of 1.5 million a week, or about 214,000 a day.



    That's no growth at all. It's also strange. I've been expecting Android's growth to slow for some time, but not this much, and not this soon. Assuming the numbers are correct, and since they were released by Google, they should be, the release of the iPhone on Verizon, when it happens, should result in a decrease in Android sales. This is surprising, and interesting. Has Android hit its peak so soon?



    And if so, what does that mean for WP7? I think it would help MS, and RIM.
  • Reply 3 of 77
    "But Munster believes that Apple will make the iPhone available on Verizon's network in the first half of 2010, as the U.S. is the only remaining country out of 89 where an exclusivity agreement is in place."



    A year late there buddy.
  • Reply 4 of 77
    The iPhone will see the biggest explosion of sales once released to Verizon because of the high demand
  • Reply 5 of 77
    Quote:
    Originally Posted by AppleInsider View Post


    ... Customers are loyal to their carrier, ...



    I would say that "customers are afraid of changing carriers," more.



    It's kind of amusing IMO how carriers do every underhanded trick in the book to lock you in and force you to stay, up to and including cash penalties (which would be illegal in most other businesses), and then the pundits turn around and talk about how "loyal" the customers are.
  • Reply 6 of 77
    This is the dude that says apple will make TV sets ... right?
  • Reply 7 of 77
    iliveriliver Posts: 299member
    Duh?!
  • Reply 8 of 77
    adonissmuadonissmu Posts: 1,772member
    Nothing is news here. This is just a chance for financial companies to grandstand and get free advertisement.
  • Reply 9 of 77
    Gene Munster with one of the worst track records for predicting IPHONE related events or news.

    Munster is merely stating his opinion not substantiated by any facts or news.

    Of course Verizon selling the IPHONE will give customers another choice other than Android and will test peoples preference. Other than that whats the point of his statement????
  • Reply 10 of 77
    pokepoke Posts: 506member
    Quote:
    Originally Posted by melgross View Post


    We can look to the articles that show that Android's growth has already slowed or possibly stopped. In August, Schmitt stated that there were more than 200,000 new Android phone activations a day. Now, they just released that Android "devices", including tablets such as the Samsung Galaxy, have an activation of 1.5 million a week, or about 214,000 a day.



    That's no growth at all. It's also strange. I've been expecting Android's growth to slow for some time, but not this much, and not this soon. Assuming the numbers are correct, and since they were released by Google, they should be, the release of the iPhone on Verizon, when it happens, should result in a decrease in Android sales. This is surprising, and interesting. Has Android hit its peak so soon?



    And if so, what does that mean for WP7? I think it would help MS, and RIM.



    Android's growth in the US has largely been about discounts and special offers. When you give something away for free you tend to see spectacular growth over the short-term but it's not robust. It can easily stall or reverse.
  • Reply 11 of 77
    tundraboytundraboy Posts: 1,598member
    The exclusivity clause is not really a mistake. Apple had to give up something to lure the carrier to cede unprecedented control over the device to Apple. Turns out that yielding that control to Apple is good for the carrier because Apple is meticulous about avoiding features that only hobble the device and annoy the user.



    Now if Apple continues to have iPhone exclusivity deals after the current commitments expire, then that would be a mistake.
  • Reply 12 of 77
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by AppleInder


    [Munster] said he believes AT&T's exclusivity has limited demand for the iPhone in the U.S.



    I can?t see how that is an issue when the iPhone demand is still outstripping supply. Still, I think next year is the time for CDMA-based iPhone to arrive.





    Quote:
    Originally Posted by melgross View Post


    We can look to the articles that show that Android's growth has already slowed or possibly stopped. In August, Schmitt stated that there were more than 200,000 new Android phone activations a day. Now, they just released that Android "devices", including tablets such as the Samsung Galaxy, have an activation of 1.5 million a week, or about 214,000 a day.



    That's no growth at all. It's also strange. I've been expecting Android's growth to slow for some time, but not this much, and not this soon. Assuming the numbers are correct, and since they were released by Google, they should be, the release of the iPhone on Verizon, when it happens, should result in a decrease in Android sales. This is surprising, and interesting. Has Android hit its peak so soon?



    And if so, what does that mean for WP7? I think it would help MS, and RIM.



    Slowing is to be expecting, but peaking isn?t. Something seems very odd about a free smartphone OS found on dozens of selling models worldwide for a great range of price plateauing when the smartphone market still moving fast. Weren?t the Black Friday reports showing strong smartphone sales, maybe these activations aren?t going to show up until after Christmas. I feel some key info is missing.
  • Reply 13 of 77
    I think many of us have been saying this for some time. The iPhone only has access to ~32% of the mobile phone users in the United States (to be fair, I'm of the opinion that the iPhone built many of those users). Android has access to nearly 100% of the market.



    The current situation looks like:



    iPhone on AT&T (~32% of the market)



    - vs -



    Android on AT&T (~32% of the market)

    Android on Verizon (~32% of the market)

    Android on Sprint Nextel (~17% of the market)

    Android on T-Mobile USA (~12% of the market)



    So, I think we will see an amazing flood of iPhone activity when you essentially double the audience.



    It would be very interesting to see how many android users are on AT&T. That is the only comparison worth mentioning.
  • Reply 14 of 77
    Quote:

    CONSUMER REPORTS: AT&T NAMED WORST CELL-PHONE SERVICE PROVIDER



    .....



    No-Contract Service



    More than 90 percent of Consumer Reports survey respondents' phones were serviced under a contract. Those with no-contract cell-phone service said they made far fewer calls and rarely used data, and perhaps due to their simpler needs were more satisfied overall. Among no-contract service providers, Consumer Cellular scored highest for satisfaction followed by TracFone. AT&T GoPhone was the worst provider in this category receiving relatively low marks for value and voice service.



    No-contract service is generally most suitable for light use, but options are expanding beyond bare-bones basics. There are now more conventional phones that provide data service without a contract, a change from the past. And carriers that specialize in no-contract service, including Virgin Mobile and Boost Mobile are offering more smart phones. Verizon and T-Mobile now offer most of their phones, smart and regular with or without a contract, but customers will pay more for the device itself.






    http://m.gizmodo.com/5707431/att-fin...nsumer-reports





    If Verison has a "No contract" option for the iPhone, I'm seriously considering getting one even though I like the Nexus S better but uses overloaded and no "No contract" AT&T GSM in the US.



    I've been very pleased with my "No contract" phone and Google Voice, with one phone number it rings on all phones (VOIP, cell, landlines) and I pick up the one that is the most suitable, cost, security, privacy etc.



    A busy month, with a lot of cell use, I pay about $40, otherwise it's mostly $10 a month. I'd be glad to pay more upfront for the phone, as I tend to keep my devices for quite some time and take good care of them so they last longer than normal 2 year contracts and rapid upgrade cycles. So why should I have to keep paying for the phone on the next contract when I can use that money for a new computer instead?



    I would like one device though, with smart features, the Nexus S is supposedly ready for VOIP, I guess it just needs a app to get it going I'm assuming. Like it to be seamless and customizable though with one device.



    Sigh
  • Reply 15 of 77
    Quote:
    Originally Posted by solipsism View Post


    I can?t see how that is an issue when the iPhone demand is still outstripping supply. Still, I think next year is the time for CDMA-based iPhone to arrive....



    Agreed. If exclusivity was a "mistake," a bigger one would be having to agree to the carriers demands.



    The iPhone might not have even got off the ground without the AT&T exclusive, and the control that Apple wrested from them in exchange for that exclusivity.
  • Reply 16 of 77
    [QUOTE=solipsism;1764555Something seems very odd about a free smartphone OS found on dozens of selling models worldwide for a great range of price plateauing when the smartphone market still moving fast. Weren’t the Black Friday reports showing strong smartphone sales, maybe these activations aren’t going to show up until after Christmas. I feel some key info is missing.[/QUOTE]



    Something odd for sure, but I can't buy into Black Friday being a big part; a physical phone makes a difficult gift, as the new unit is generally activated when it leaves the store (from the cell phone perspective). The old phone ceases to work...



    Was in Hong Kong a couple weeks back, and looking at the iPhones everywhere (including a waiter at the hotel pool!), I know the iPhone is up for some great growth. But, looking at the US, it seems like the numbers that are always quoted about Android's surge make sense. I think there is a significant gap somewhere between what we hear from Google and what we hear from Apple, but I can't even begin to understand how there could possibly be that much play.



    The only thing I can think of is that there are a lot of shipped, unsold units in the channel. But that doesn't seem to pass the smell test when you start talking about 5-10 million units missing.
  • Reply 17 of 77
    They'll both do well.
  • Reply 18 of 77
    chronsterchronster Posts: 1,894member
    Quote:
    Originally Posted by ghostface147 View Post


    They'll both do well.



    Yes but who will be crowned CHAMPION!?
  • Reply 19 of 77
    neilmneilm Posts: 571member
    Quote:
    Originally Posted by solipsism View Post


    I can?t see how that is an issue when the iPhone demand is still outstripping supply. Still, I think next year is the time for CDMA-based iPhone to arrive.



    Precisely. That's the issue with some analysts' US-centric perspective. From a worldwide point of view Apple continues to have difficulty meeting iPhone demand. Limiting demand in the US isn't necessarily bad, and might even be deliberate.



    I too believe that 2011 is likely the year for the exclusivity to break open. I also think it may be the right time, neither too late nor too early.
  • Reply 20 of 77
    Rational buyers will opt for an Andriod tablet due to it's open nature.
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