Verizon and Motorola Bring Back the Dead
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Verizon (NYSE: VZ) was not the first carrier in the US to offer a Google (NASDAQ: GOOG) Android smartphone -- that was T-mobile followed by Sprint. However with the original Droid-branded Motorola smartphone, Verizon helped put Android on the map before Samsung had their Galaxy brand and HTC built their One Series. This was also during the years when the Apple (NASDAQ: AAPL) iPhone was only GSM, meaning that Verizon and Sprint did not have the iPhone. Thus Verizon built up and heavily promoted their Droid brand, built largely with Motorola phones. Sprint pushed their Evo-branded Android handsets with their WiMax technology. This all changed when in 2011 Verizon launched the iPhone 4. Ever since then the iPhone has been the bestselling smartphone on Verizon.
This domination of the iPhone on Big Red may be experiencing at least a small shake up in the second quarter of 2012. According to channel checks performed by the researcher Anil Doradla of William Blair, Motorola’s Droid RAZR Maxx outsold the iPhone in the second quarter of 2012. There are several reasons that contribute to this purported shift. None of these reasons are that the iPhone is doomed. The iPhone is still the best selling smartphone in the US and remains the top selling smartphone on AT&T and Sprint, according to Doradla.
Verizon is no longer accepting non-LTE equipped smartphones. They are pushing both LTE equipped smartphones and their Droid line, both of which the Droid RAZR Maxx fits and the iPhone 4S does not. Additionally the Droid RAZR and the Droid RAZR MAXX are re-boots of the Motorola RAZR. Launched in 2004 the original Motorola RAZR is the most successful clamshell phone in the world, selling over 130 million units. Combine this successful brand with the successful Droid line and the Droid RAZR, marketed as the thinnest smartphone when it launched in 2011, was very successful. A few months later Motorola launched the Droid RAZR Maxx, which was thicker and had 85% more battery capacity. The Droid RAZR Maxx, pushed by Motorola with its RAZR branding and by Verizon with its Droid branding and LTE that has ousted the iPhone on one carrier for one quarter.
CNN has even reported that Verizon sales associates are pushing the RAZR Maxx on customers who initially wanted to get an iPhone, potentially because their LTE network is faster and less congested. The iPhone should get a considerable boost later this year when the iPhone 5 launches. The RAZR Maxx will also face strengthening competition from within the Android family in early July when the Samsung Galaxy SIII launches on Verizon. The Galaxy SIII is one of the first major Android phones to be launched on Verizon without the Droid branding and customizations. Sprint, AT&T, T-Mobile and US Cellular will also be launching the SIII without modifications this summer which will increase awareness of the Galaxy brand.
Canaccord Genuity analyst Michael Walkley told AppleInsider that he performed similar channel checks with Verizon and found that the iPhone was still the best selling smartphone on Verizon. He also reported that the iPhone was the bestselling smartphone on all of the big US carriers who offer the iPhone. Walkley did note that the RAZR Maxx is gaining ground on the iPhone on Verizon.
With all of the major mobile platforms getting refreshed this month we are largely seeing iOS, Android and even Windows Phone evolve to parity. The iPhone and Android are also largely at parity on hardware with both providing high quality, high end devices. With Windows Phone 8 Nokia should be able to produce high end hardware somewhat soon. This parity results in the smartphone buying decision largely boiling down to personal preference. It is the smaller platforms like Research in Motions Blackberry and to a lesser extent Windows Phone that still need to bring their software and hardware up to snuff.
Microsoft (NASDAQ: MSFT) with their Windows Phone Summit has largely announced the needed software upgrades. Multi-core support a shared core with Windows 8, it now remains to be seen if Nokia can hang in there financially long enough to launch new phones that use Windows Phone 8. It also remains to be seen whether the upcoming release of the Blackberry operating system, Blackberry 10, will be enough to save Research in Motion.
Regardless of whose phone is number one on which carrier during which quarter, we have reached a stabilization point in the industry. Android and iOS are the dominant platforms with mature operating systems that offer a similar app selection and similar feature set. The turmoil of the last few years as Windows Mobile, BlackBerry and Symbian were surpassed by Android and iOS is over. Going forward it will be about who can clench the third spot in the mobile arena after Android and iOS.
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