AT&T and Verizon Wireless: It All Comes Down to the iPhone

Apple’s iPhone is a large enough player in the smartphone market to be the deciding factor in a major carrier’s market plan. The two carriers whose future depends on the iPhone? AT&T and Verizon Wireless. AT&T has had the iPhone for three years and now Verizon is expected to finally get it.

The success of Google’s Android OS is largely due to Verizon’s conspicuous lack of Apple’s iPhone. You all know the story:  Apple offered the iPhone to Verizon first but the carrier passed on it. AT&T got it and is within 400,000 customers of Verizon’s user base. Big news? You bet. With the millions of iPhone activations this year alone, AT&T’s move to being within grasp of the most popular network in the US is possible.

Right now the numbers are in Verizon’s favor: 93.2 million subscribers for Verizon Wireless versus 92.8 million for AT&T. When you realize the number of smartphones being shipped every year along with the fact that families are moving away from house phones to smartphone plans is in the millions and millions, 400K doesn’t sound like much at all. I would presume the leader in cellular communications in the US is easily within a year’s striking distance

However, when you factor in revenue, Verizon is down 2.9% from last year despite huge Android smartphone growth. In comparison, AT&T’s revenue is up 2.8% from last year. Apple is shipping every iOS device it makes with demand exceeding supply (what’s new?) and its iPhone 4 has only helped AT&T despite ‘Antennagate’.

In comparison for new subscribers, Verizon was up less than a million new customers this third quarter. AT&T on the other hand had 2.6 million new subscribers. Half of which were iPhone users. Just think about when the Verizone iPhone comes out (rumored early 2011). According to Drake Johnstone—an analyst for Davenport & Co.—up to 6 million AT&T customers could jump ship to Verizon. That would certainly shift the balance back to more traditional levels. Conclusion? Android OS is good, but iOS matters more for carriers.

So what do you think? Going to jump ship from AT&T for Verizon Wireless? You know they’re working on fixing the either cellular calling or cellular data problem on their CDMA network like AT&T likes to poke fun at. Or how about Android versus iOS? You on Verizon’s network and holding out with an Android phone just until the iPhone comes out with a Verizon sticker attached? Let me know in the comments. Regardless of whether or not an iPhone comes out for Verizon early next year, the iPhone seems to be just the device that is keeping the two carriers almost in sync with each other…

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