Verizon's real plan for iPhone

Posted on Jan 14, 2011 3:40 pm by Ian Paul, PC World

Verizon didn’t want the iPhone because of its cool technologies, excellent design aesthetics, or massive app store, but because iPhone users are rich and loyal. That’s one way to look at some new numbers from ComScore, anyway. The metrics firm recently published a forecast showing how the Verizon iPhone could reshape the U.S. mobile market. ComScore didn’t draw any conclusions from its data, but the numbers suggested that Verizon and the iPhone stood to do very well in 2011 at the expense of AT&T and Android.

Verizon: Poised for smartphone domination?

Verizon is currently the overall leader among U.S. mobile carriers, with 31 percent of all subscribers. AT&T is just behind Verizon at 27 percent. But when you measure market share just by smartphones, AT&T is the clear leader with 38 percent of U.S. subscribers followed by Verizon at 27 percent.

The problem is things are not all that rosy for AT&T right now. The company lost 7 percentage points of its smartphone business over the past year, according to comScore. Verizon, meanwhile, has surged by 4 percentage points during that same time.

If this trend continues, Verizon’s iPhone acquisition could mean the carrier is poised to surge ahead of AT&T in the smartphone arena.

$50K Minimum

If Verizon does move ahead of AT&T, the carrier will be taking a sought-after demographic with it. ComScore says iPhone users are typically found in some of the most desirable age brackets for marketers, such as 18- to 24-year-olds; 25- to 34-year-olds; and 35- to 44-year-olds.

These people are doing pretty well for themselves, too. About 81 percent of iPhone users in the U.S. have a household income of at least $50,000, and 47 percent earn at least $100,000, according to comScore. iPhone users are also likely to stick around. Nearly 55 percent of iPhone users in the U.S. have had an Apple smartphone for more than three years.

Android going down?

The iPhone’s market share among U.S. smartphone subscribers remained relatively steady during 2010 at 25 percent, while Android held 26 percent, according to comScore. But if iPhone sales are strong on Verizon, Apple may be able to increase its lead and possibly move past Android among U.S. users. The problem for Apple, however, is that Android continues to expand its market share at a rapid pace. Between August and November,Android’s market share grew by 6.4 percentage points in the U.S., according to comScore. I should also point out that both Apple and Android are still behind Research In Motion, which owns 33 percent of the U.S. smartphone market.

There’s little doubt the Verizon iPhone will prove to be a popular draw for new users and those looking to switch from AT&T. But we’ll have to wait a few months yet to see whether Verizon can attract enough people to overcome AT&T’s smartphone dominance.