Despite the tremendous growth of Android recently, there is mounting evidence that sales of Android devices are stagnating. Verizon, in particular, is feeling the effects of this sales shift as Android sales continue to underperform the iPhone 4. Moreover, even assuming that Android sales start trending upwards in a meaningful way, relying solely on Android puts Verizon at the mercy of Google.
Horace Dediu writes for Asymco:
For Verizon this would be a serious problem. Although Verizon used to have a disproportionate share of RIM’s products, that OS was not enabling an ecosystem like Google’s. It was a product narrowly defined around messaging. Verizon is facing the prospect of a single OS supplier who may or may not maintain alignment with Verizon’s core profit algorithm. If they diverge, Verizon’s bargaining power will be strictly limited.
With 2011 just a few days away, the iPhone on Verizon is closer to becoming a reality than ever before, and Verizon is reportedly enthused about bringing Apple’s iconic device into their smartphone family and putting an end to AT&T’s iPhone exclusivity. Kaufman Bros. analyst Shaw Wu recently wrote that Verizon is “still excited” about carrying the iPhone, especially as a means to “combat slowing Android momentum in the US.” Moreover, Wu notes that Verizon considers the iPhone “essential to its future success.”