Credit PC World

Verizon iPhone Could Sell Millions . . . If it Ships

Analysis: It's high time to wonder just how many more iPhones Apple might sell with a brand new subscriber base of 90+ million users.

By Yoni Heisler, NetworkWorld Dec 18, 2010 6:41 AM

By now, the notion of the iPhone coming to Verizon is more a matter of when than if. Over the past few months, an increasing number of credible sources, like the Wall Street Journal and the New York Times, have intimated that the iPhone will hit Verizon in early 2011.
While some speculative, if not downright fanciful, rumors have indicated that the long-sought-after Verizon iPhone will be an LTE device, the most likely scenario is that Verizon will get the same iPhone 4 currently available on AT&T. Interestingly, it's even been rumored that Verizon, during its negotiations with Apple, demanded that Apple not make the iPhone available on any other CDMA carrier -- sorry, Sprint.
With the Verizon iPhone as close to a sure thing as one can get when it comes to Apple, it's high time to wonder just how many more iPhones Apple might sell with a brand new subscriber base of 90+ million users.
Apple analyst Gene Munster recently crunched some numbers and anticipates that Apple, via Verizon, will sell anywhere between 9 million and 20 million iPhones in 2011. What are we to make of that figure? Well, to be honest, it's really hard to say. Part of the problem is that we don't know exactly when Apple is planning to unleash the iPhone on Verizon and how much time they'll have to generate sales during the 2011 calender year.
There are also a number of x factors to consider, namely iPhone saturation and the rise of Android.
First, it's hard to ascertain just how many frustrated Verizon customers are biting their nails in anticipation of the iPhone hitting their trusty network. Think about it - it's reasonable to assume that a large percentage Verizon subscribers interested in the iPhone and capable of switching over to AT&T have already done so. In other words, some believe that any Verizon owners who really wanted an iPhone already have one.
Now granted, some folks simply can't leave Verizon for a variety of reasons such as cost, reception, active contracts, and even laziness. Which now brings me to the second factor -- the impressive rise of Android. The success and popularity of Android has inevitably resulted in Verizon customers pushing their iPhone dreams aside and settling in with one of Verizon's many Android handsets. The iPhone certainly revolutionized the smartphone landscape, but the gap between the iPhone and Android is now as small as it's ever been. Indeed, for some folks, a cheap or even comparably priced Android device is preferable to the iPhone.
Taking those two factors into consideration, it's really hard to gauge how much of an effect the iPhone will have on Verizon. What we can do, however, is to look at how the iPhone fares relative to other smartphones on AT&T and apply that math to Verizon. And lo and behold, that's exactly what Gene Munster did.
Munster makes an obvious yet telling point -- AT&T currently sells an array of smartphones from Android and RIM. But the growing field of smartphone competitors on Ma Bell has done nothing to cramp Apple's style as the iPhone accounts for 80% of all of AT&T's smartphone sales. The lesson here is that though Android is a viable and worthy competitor to the iPhone, most people, when given the choice, seem to prefer an iPhone over a competing device, all things being equal.
So extrapolating from those figures, Munster theorizes that if the iPhone is able to account for 80% of Verizon's smartphone sales, Apple may very well sell upwards of 20 million iPhones on Verizon in 2011. Munster notes that if the iPhone on Verizon hits store shelves very early in 2011, the 20 million mark is achievable. An early to mid-year release, however, might be good for 9 million.