Apple To Benefit From Verizon iPhone Sales Windfall

Apple’s ongoing sales success shows no sign of slowing down, after an analyst predicted that Verizon could could sell 25 million iPhones in 2011, a substantial rise over other analyst estimates.

That is according to William Power, an analyst with R.W. Baird & Co., who suggested that some 25 million iPhones will be activated by the carrier in 2011, a number deduced from a 1,000-person survey. That includes not only current Verizon smartphone users switching to the iPhone, but also a sizeable percentage of the carrier’s feature-phone users deciding to upgrade.

According to AllThingsD, Power is cautioning that his astronomical sales figure is a “directional number” as opposed to a set-in-stone forecast. Factors such as manufacturing capacity could significantly affect the number of iPhones eventually reaching Verizon customers.

Android Beware

Other analysts peg Verizon iPhone sales at a somewhat lower number. Piper Jaffray analyst Gene Munster suggested in a 10 January research note that 15 million units would find their way into Verizon customers’ hands by the end of the calendar year, while Gleacher and Co.’s Brian Marshall put the number at closer to 12 million.

Ahead of the Verizon iPhone’s unveiling, Munster also theorised that the smartphone’s appearance on the carrier’s network could have a negative effect on Android phone sales.

“Android phones outsell iPhones in the US, but we believe when Verizon gets the iPhone, that trend could be reversed,” he wrote in a 7 December research note. “As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android.”

Since the Verizon iPhone 4’s unveiling at a high-profile event in New York City 11 January, pundits and analysts have also debated on how the smartphone’s presence on the new carrier will affect the fortunes of AT&T, which previously had an exclusive lock on the iPhone in the United States. Analysts generally feel there will be some cannibalisation, as a percentage of AT&T iPhone customers jump onto Verizon, but they disagree on exact numbers.

No LTE

Due for general release 10 February, the Verizon iPhone will sell for $199 (£125) for the 16GB model and $299 (£188) for the 32GB model with a two-year contract. It will not utilise the carrier’s faster LTE (Long-Term Evolution) network, which is currently ramping to life in various parts of the country, because of what Apple COO Tim Cook has cited as the company’s unwillingness to make “compromises” in hardware design.

Hardware- and software-wise, the Verizon iPhone features few differences from the AT&T version, with the exception of a redesigned exterior antenna. Verizon and Apple executives claim this redesigned antenna will make the device compatible with the carrier’s CDMA (Code Division Multiple Access)-based network. However, it may have also been to prevent the same sort of reception issues that plagued AT&T’s iPhone 4 throughout the summer.

Verizon plans on offering a 3G wireless hotspot feature with the iPhone 4 for $20 (£12.61)per month for 2GB data, according to online reports.