Verizon Sold 2.2M iPhones - So Who Did Apple Take Sales From?

Apple sold almost 19 million iPhones.  3 Million of them went to AT&T while 2.2 million CDMA versions were sold on Verizon's network.  Two point two million of a 9 month old, albeit fantastic, mobile device.  Who's buy them and which company had the most to lose from the Apple-Verizon partnership?

Three Distinct Groups:

Let's examine who's buy these iPhones on Verizon's aging CDMA network that does not allow the user to talk and access the data through the 3G network at the same time.  My guess is that its a mixture rather than greater subset of anyone particular group.  With over three million iPhones activated with AT&T, it is suffice to say that plenty of people stuck with Ma Bell despite its reputation of spotty network.  I am sure a large segment of the market went with Verizon that defected from AT&T.  After all, more than a few stuck with them because of the iPhone.  The demand was bad enough that Verizon struck a deal with Apple despite its popular Droid line.

Also, iPhone is a whole new device in and of itself as far as current Verizon customers are concerned.  While Android has done very well on Verizon, it largely cannibalized many Windows Mobile and Blackberry users who wanted a modern mobile device with a modern mobile OS but were not willing to switch to AT&T to get the iPhone.  Let's just say as a T-Mobile customer who wants the iPhone but wasn't willing to suffer on AT&T, I know what I'm talking about.  It's why I went with the G1, the very first Android device, and haven't upgraded since.  These Verizon customers fell into the second group.

The third group is what's interesting.  No love but AT&T but subscribers who will tolerate Verizon.  I may count myself among this group in the near future.  As a T-Mobile customer, I might consider switch to Verizon later this summer should a new magical iPhone becomes available.  T-Mobile has been bleeding customers and a large portion of those 2.2 million iPhone users with Verizon were former T-Mobile customers.  And I reckon that if T-Mobile doesn't get the iPhone in 2011, more users will defect to Verizon.  Sprint's core number of subscribers should be pretty loyal but there are likely a few million users who, won't do this business with AT&T, are going to be fine with Verizon as their iPhone carrier.  

Who Had The Most To Lose:

Android has the most to lose and had had its momentum slowed.  Believe me when I tell you that Android Proper, not variants that have been commandeered by some carriers around the world, continues to grow beyond expectation.  While the Android platform probably saw a slowdown, Google does not necessarily have a lot to lose.  After all, it continues to deliver search and mobile ads to Verizon iPhone users.  In fact, Google may benefit more from iPhone users who are more likely to spend money than Android users.  

Motorola is probably a bit loser in all this.  First off, Xoom doesn't seem to be doing the level of business for Motorola as the iPad was, and the iPad 2 is now, for Apple.  2.2 Million iPhones potentially means quite a lot of Motorola-based Droids that were not sold.  This is especially harsh for Motorola given Apple's relationship with Motorola that dated back to when Apple used to make Macs based on PowerPC chips designed and manufactured by it.  Then there was that Rokr debacle that everything that was the iPod phone that didn't quite go anywhere.  Motorola had really turned things around with the Droid devices and it was the top dog until the iPhone came along on Verizon.  Things might get better with the new Droid but that is probably going to be short-lived after the next iPhone upgrade happens to come along.

What about others?  Samsung's Galaxy S probably has not sold well since news of Galaxy S II is just weeks away but the iPhone 4 probably did not help matters.  RIM has done well with the Blackberries and global growth has been good.  However, it's position with Verizon has been diminished greatly since Verizon turned its attention to Android devices after the Blackberry Storm failed to live to up expectation.  The iPhone likely ate into a lot of sales.  iOS devices will continue to erode RIM's place in the enterprise.  

Competition is great.  We are watching an epic tech war that was a lot like the one fought and won between Apple and IBM in the early 80s and then Apple and Microsoft in the late 80s through the mid-90s.  Apple is still involved as is Microsoft but there are more elements and players involved.  Google, Adobe, RIM, Samsung, HP, and RIM just to mention a few.  A lot is at stake.  And the winner has already been determined as far as mobile device tech is concerned.  

I look forward to seeing how the rest of 2011 plays out as the mobile war becomes more interesting with tablets getting into the mix.

Again, competition is great and we mobile warriors are winning so far.

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