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Asymco: Android not helping Verizon fight the iPhone [U]

updated 10:55 am EST, Mon December 13, 2010

Asymco study shows Verizon down despite Android

(Updated with ITG methodology) The popularity of Android on Verizon hasn't been enough to stop AT&T from walking away with the US smartphone market with the iPhone, Asymco's Horace Dediu said Monday. Basing his information on potential insider info from ITG Investment Research's Matthew Goodman compared with AT&T's recent results, the analyst noted that Google's platform wasn't stopping Verizon's smartphone sales from declining and was mostly preventing an even steeper drop. They were mostly feeding on other platforms at the carrier rather than attracting new customers, Dediu said.

"Android is barely enough to keep the battle with AT&T from becoming a rout," he said, noting that the drops began in earnest in August, as the iPhone 4 reached healthy enough supply to overcome some early shortages.

The researcher added that Android could ultimately be a liability as it was creating a lack of diversity. Despite doubling the number of companies offering smartphones, 75 percent advanced devices on the network were now using Google's OS and could increase to 90 percent if RIM or another alternative didn't step in. Google isn't necessarily aligned with Verizon's goals and could work against it by forcing Verizon to agree to Google demands if it wants to keep its sales alive, Dediu argued.

It was also implied that any sudden loss of favor for Android could lead to a rapid fall-off in Verizon's total smartphone business. AT&T has already been building up a diversity of smartphone platforms like Android and Windows Phone 7 as a hedge against an expected loss of subscribers once the iPhone reaches Verizon.

The figures, if leaked from Verizon as suspected, would support notions that the carrier was switching attention to Apple after determining that Android wasn't having the intended effect. AT&T as of the summer was now growing at about 2.5 times the rate of Verizon, owed almost entirely to the iPhone, and at four million iPhones per quarter on average, was moving more Apple handsets alone than Verizon's entire smartphone base.

Dediu expected Verizon could sell as many as eight million to 12 million iPhones in 2011 but added that it wasn't clear Apple would necessarily cannibalize Verizon's existing platform. However, Verizon often sets aside marketing money as a percentage relative to sales and thus has only limited resources to promote its phones. Any marketing Verizon spends on Apple is money that doesn't go towards Android, the analyst said.

Losing Verizon's primary attention could cost Google significant market share. Although its Android activations are up to 300,000 per day based on tablets and sales outside of the US, Verizon remains the single largest Android-supporting carrier. The provider has made Google dependent enough that it was willing to compromise on its net neutrality policy to keep pleasing its most important US partner.

Update: An ITG spokesman said the data came from independent resellers in the US and not, as originally suggested by Dediu, leaked information. The information thus wouldn't include Verizon's own stores but could still be reflective of actual trends.

by MacNN Staff



  1. iphonerulez

    Joined: Dec 1969


    Good news for Apple long-termers

    As an Apple shareholder, I don't give a darn about whether iOS has a smaller market share than Android. I'm only interested in profits, not volume sales. As long as consumers and the carriers see the iPhone as having higher value than Android devices, that's more than good enough. I've heard claims that the iPhone will continue to hold its value as long as the quality and customer service is kept above satisfactory. It should be relatively easy to do as long as Apple doesn't start getting greedy or try to cut corners. Apple is smart to have a goal of high quality and not some goal of trying to capture the entire mobile market. I suppose Google has the same goal that Microsoft had of dominating the industry (at least one Android device for every living human). It probably won't work because there are still other choices in mobile OSes. I'll be satisfied if Apple can carve out a smartphone market of 30% repeat high-end customers. That percentage should keep Apple's cash flow going for quite a while.

  1. climacs

    Joined: Dec 1969


    Android killing Cr*pberry

    looking at that last chart, wow. Once Verizon has iPhone, RIM is screwed. For now they will hang on by their fingernails thanks to all those corporate-purchased phones, but that won't last forever.

  1. space-e

    Joined: Dec 1969



    your thoughts?

  1. Jonathan-Tanya

    Joined: Dec 1969


    Buy One Get 10 free

    That's hilarious, that Android is preventing 'an even steeper loss', do you think?

    RIM wasn't going to stem the tide?

    Look Verizon has mostly kept even with AT&T which is an amazing feat - Verizon doesn't have iPhone.

    AT&T does have Android, they've had it the whole time. So Verizon is at a loss for not having iPhone no doubt.

    But that is not a comment on the strength of Android versus iOS. The reality is AT&T would have been hurting badly if they were iPhone only. The advantage they have - is they can sell their customers any OS they want.

  1. Jonathan-Tanya

    Joined: Dec 1969


    interesting about Palm too

    They said Palm was still selling - not huge numbers, but not "kin fiasco" levels either.

    This is the first numbers I've seen. Of course, Verizon spiked the Palm sales with the free wi-fi hotspot offer, but still - shows that people were not averse to Palm, when the carrier got behind it.

    HP still has room to make a move next year, but they better execute perfectly.

  1. wrenchy

    Joined: Dec 1969


    Well the analysis from this group

    today must mean it's lights out for Android!

    Soon, everyone will be walking around with iPhones. All of us living in Stevie's Vision of Smartphone Utopia. All our problems taken care of by Apple. After all, our phones will just work!

    Sony, Motorola, Nokia, Blackberry, HTC, Samsung and all those wanna-bees should file for bankruptcy now and and minimize the pain and the shame.

    But wait, next week some other analytic group will want to make a name for themselves and come up with another scenario - like an alternate universe. In this one, Windows Phone 7 will be projected to surge to #1 and Apple will play second fiddle with Android and Blackberry fighting for the leftover scraps.

    Oh but there are a few dozen other groups of analysts that beg to differ...

    These clowns are a dime a dozen. How many AT&T iPhone subscribers will jump ship to VZW? How will the the increase of hardware specs change the mobile space?

    Enjoy the hardware/platform you have now. Many people have jumped from BB to Android to iOS and back and forth. Each with a different experience of each platform. Do you think everyone's experience with iOS is great? I think not.

    Android is 'ok/pretty good' for now, but what if Google pushes the envelope and Android eventually becomes better and more "polished" than iOS??

    I expect Apple and Google to push each other to greatness. And as long as Windows Phone 7/8 is in the s*** heap, I'm happy.

    Love wrenchy

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