iPhone impact on Verizon

(This is another extract from a report I published a couple of weeks ago for Enders Analysis)

As most people know, for the last couple of years Verizon Wireless aggressively promoted Android, while AT&T had an exclusive agreement to sell the iPhone. How well did that work? 

Well, neither company discloses Android share, but in Q4 2010 smartphone penetration of Verizon Wireless’s base was 25% versus 34% at AT&T. Not good. 

However, by Q1 2012 it had risen to 44%, catching up with AT&T. What had changed? 5 quarters of iPhone sales on Verizon, as the bestselling handset, and two quarters of 50%+ sales. Not as high as AT&T, where the iPhone is utterly dominant, but still pretty strong. 

VZW discloses iPhone unit sales and the total smartphone base (as does AT&T), which allows us to calculate the proportion that the iPhone makes up of the total VZW smartphone base. It appears that the entirety of this catch-up in smartphone penetration (with accompanying ARPU growth) was due to the iPhone, which is now around a third of Verizon’s base and still growing. 

So, even on the carrier that largely created Android and created the Droid brand, iPhone is substantially outselling Android. Verizon does not disclose Android sales, and so that ‘non-iPhone’ category includes RIM and Windows Phone, but it seems quite possible that there are already more iPhones than Android phones on VZW’s network.