Earlier this morning Nielsen released its latest smartphone data for the US market:
By comparison comScore says that 36% of mobile phone owners have smartphones. However the most recent comScore data show a comparable share distribution for Android and the iPhone (43.7% vs. 27.3%).
Nielsen also reported that smartphone ownership for those under 45 is much greater than the overall population: 54%. It goes even higher (62%) for those 25 to 34 years old.
The Pew Internet Project said in May of this year that 42% of US mobile users own smartphones. And in a release of new survey data yesterday, Pew found that 50% of all mobile phone users have downloaded apps (vs. 43% in May 2010). However, as we know, downloads and usage are not synonymous.
As the chart above indicates, 51% of mobile phone app downloaders use between 1 and 5 apps weekly. A substantial minority (31%) use 6 or more apps per week. Average weekly app usage is higher among tablet owners.
The following chart shows the general categories downloads by populatirty/penetration according to Pew. Curiously the most popular app download category, games, doesn't appear on this list. This is probably a flaw in Pew's survey question design.
Finally, Pew says that just under half (46%) of all app downloaders have paid for apps at some point, with most spending less than $5.
It's becoming clear that "shipments" is a bogus metric that obscures whether products are actually selling to consumers. Accordingly it shouldn't be used to measure market share. Sales to consumer-end users is really the only valid market-share metric. Yet IDC, Strategy Analytics, Canalys and others persist in reporting "shipments." These numbers are easier to measure and capture than actual sales.
But OEMs can also manipulate the perception of market share by reporting "shipments." For example Samsung misrepresented their tablet sales by reporting "shipments." So did RIM. And Microsoft also did this early on with Windows Phone "shipments" to show momentum that had yet to really develop. And there are many other such examples.
It fair to say that in many cases there is a positive correlation between shipments and sales for popular products. However as the examples above suggest it's not always true. Samsung claimed 1 million Galaxy Tab (7") shipped but popular reports put actual sales at well below 100,000 units.
One of the big stories today is Samsung becoming the world's top smartphone vendor. That may well be true; Samsung has had enormous success with Android and it's the leading Android OEM in North America and now globally. According to numbers released by Strategy Analytics, Samsung shipped nearly 28 million handsets in Q3 vs. 17 million for the iPhone.
The only problem is that's an "apples to oranges" comparison. Apple actually sold 17+ million iPhones in the quarter (vs. shipped). Recently Strategy Analytics, using the same "shipped" methodology, incorrectly estimated tablet market share.
As tablet OEMs release their dismal numbers we're seeing just how off "shipments" can be as an indicator of true penetration. Accordingly hardware tracking firms should shift to a consumer-sales metric rather than the more manipulable and opaque "shipped" concept.
Having said all that I don't doubt that Samsung is selling millions of smartphones and may indeed have taken the top spot from Apple. We just don't know how many the company actually sold.
Another piece of interesting information related to Samsung Android sales involves the amount of patent-licensing fees that may be changing hands. I was told (caveat: double hearsay) that Samsung is now paying Microsoft $18 per Android handset in IP licensing fees. This is in contrast to the widely reported $15 figure. Eighteen dollars is apparently the same amount that HTC pays, according to the same source, while other Android vendors are paying less.
I don't know if all this is accurate information, but I was surprised by the relatively high $18 per handset figure. This is pretty close to what I understand Microsoft charges for its own Windows Phone license. As a colleague of mine remarked, "this is the best business model I can imagine." And if we assume that about 85% of Samsung's smartphone "shipments" are Android handsets (that may be conservative) and Microsoft is getting $18 per unit that means the company would have made approximately $414 million in Q3 on Samsung Android handsets alone. Impressive.
Probably the most notable thing about the new Nokia Windows Phones (Lumia 710, 800) is that they generally look different than the iPhone and the gazillion Android models in the market. Most of the phones are colorful and stand out accordingly. This follows in the footsteps of the mostly unreleased N9 handset.
The specs are unremarkable and the software and apps ecosystem are not different or compelling enough (at this point) to grab significant adoption or attention. But the overall package, combined with color and generally nice design of the Lumia handsets, will attract some users to these phones over the blander and more generic Android handsets.
Nokia's new marketing campaign around these devices is "The Amazing Everyday." This is wrong. The campaign should focus on individuality, personality and customization -- how Nokia Lumia owners can stand out with their colorful handsets from a gray sea of other smartphone users. Nokia should emphasize the "sex appeal" of these devices. After all, handsets are fashion statements for many people.
In terms of the outlook for these new phones, I would say they are very definitely not Android or iPhone "killers." They may sell relatively well in Europe and developing markets. But they're not even being released in North America until 2012. This is a strategic mistake.
Price will be another factor in how successful they are. Nokia has fumbled on pricing in the past. If these phones show up in the US for more than $199 (subsidized) they won't sell at all. They won't sell unlocked in this market for $600 either.
This is a good first step for Nokia and Microsoft but not one that is going to dramatically alter or transform the mobile fortunes of either company at this stage.
Update: It appears that Nokia is doing some promotion around the idea of personalization and customization. This was part of an email I received today:
According to a new survey of 8,585 US adults, released by the National Retail Federation, consumers plan bring the full authority of their mobile and tablet devices to bear on the challenge and opportunity of holiday shopping. More than anything else the survey data reflect the degree to which people have come to rely on these relatively new tools for shopping.
Smartphones -- Almost 53% of smartphone owner-respondents said they will use their phones in holiday shopping in some form:
Tablets -- Just over 70% of tablet owners said they will use their "pads" for shopping and buying:
People speak of "three screens": TV, PC and mobile. We need to change that to four screens to acknowledge the growing importance of tablets. We already know that tablets (iPads) have the highest engagement metrics of any of the many screens and that the devices are much more significant for transactions -- "t-commerce" -- than smartphones.
Today the Pew Research Center's Project for Excellence in Journalism put out a report that shows tablet owners are huge news consumers, often to the detriment of other news mediums: PC, TV and print. They're also an older, more educated and more affluent bunch than other screen users.
You can read the full report, but here are a few top-level bullets:
The demographics of tablet ownership (right now) make them a way to target affluent and educated users more directly than on other screens. However all publishers and marketers will need both smartphone and tablet strategies going forward. Do you need an app or are you simply going to rely on your browser-based site?
Attribution and tracking become much more complicated as people bounce from real-world stimuli to PC to smartphone to tablet and back.
Not counting Nooks and Kindles there are 46 million tablet devices globally in market: 6 million Android devices and 40 million iPads. In the US more than 95% of tablet traffic is from iPads. Millennial Media said that iPad impressions on its network grew 456% year over year.
By the end of Q4 or early Q1 there should be several million Kindle Fires in the market and as many as 55 million iPads. Other than the Kindle Fire, however, none of the other full-fledged Android tablets are currently in a position to capture much market share.
This week Nokia is set to reveal its first batch of Windows Phones. Unless they're remarkable it's unlikely that they will dramatically alter the positions of either Nokia or Microsoft. However Microsoft has built a powerful "insurance policy" on the back of Android's success: patent licensing. The company continues to line up licensing partners in the Android ecosystem.
Yesterday Microsoft announced yet another company had licensed its patent portfolio, Taiwan-based Compal. More significantly, Microsoft also said that with this deal "over half of all Android devices have now entered into patent license agreements with Microsoft."
Google has reported that 550,000 Android handsets are activated daily. If Microsoft makes an estimated $5 per handset from 53% of all Android devices now being activated would mean Redmond is poised to take in roughly $501 million from Android on an annualized basis. As Android sales increase that number will only go up.
Nokia reported a Q3 loss of $94 million (68 million EUR) but that was better than financial analysts were anticipating. Shares jumped, accordingly, on the hope that Nokia's decline is now at an end.
The company shipped 106 million handsets but only 17 million were smartphones. On a year over year basis, growth was off in most markets. In North America, Nokia's weakest, it shipped fewer than a million devices. However there modest growth in the Middle East and Africa and strong growth in India.
Nokia has bet the farm on Windows. Reportedly the first of those handsets will be revealed next week in London, on October 26. The handsets will apparently come in three colors and physically resemble the N9.
Expectations are extremely high for these new smartphones, both for Nokia and Microsoft. If they're going to do well, Europe is probably the market to watch. It's unlikely that the initial Nokisoft devices will perform well in North America however.
Coming in at the very high end of analyst estimates the iPhone 4S sold "more than four million" units over the course of its first weekend, including pre-orders. This was "more than double the iPhone 4 launch during its first three days."
Other stats released by Apple:
Many if not most tech bloggers and analysts (including me) were disappointed by the lack of a hardware redesign and the absence of 4G capability. (However I purchased one nonetheless.) Some people have attributed the massive sales in part to Steve Jobs' death with Apple die-hards buying the 4S as a kind of tribute to Jobs. Others see the Siri "assistant" feature as driving sales.
However the sheer availability of the device -- on three of four major US carriers and in multiple countries simultaneously -- is also responsible for the quick uptake. Even though there are many improvements in the 4S over the iPhone 4, sales reflect pent-up demand for iPhones among non-iPhone owners, as well as upgrades from those with 3G and 3GS iPhones.
What would also be interesting to know is how many $99 iPhone 4 devices were sold over the weekend (not included in the 4 million figure).
During the iPhone 4S launch event Tim Cook reported 250 million iOS devices in market globally. Roughly 130 million of those are iPhones. Google's CEO Larry Page last week said that 190 million Android devices had been activated globally.
Google announced a "blockbuster" quarter yesterday: revenues of $9.72 billion which was an increase of 33% vs a year ago. Google handily beat analyts' revenue expectations.
There was also a blockbuster of a statement around mobile advertising. Google CEO Larry Page said that mobile had grown from an annualized run rate of $1 billion to $2.5 billion.
Here are the mobile-related comments and discussion from the earnings call:
Google CEO Larry Page:
I'm super pleased with Google Maps, it's a favorite with our users, especially on mobile devices. In August, we launched in 40 new countries, taking our total to 130 countries. The growth of Android is mind-boggling too. Over 190 million devices have now been activated globally. I'm super excited about the soon-to-be released new version of Android called Ice Cream Sandwich, that's right, Ice Cream Sandwich. You won't believe what we managed to get done in this release.
We're also seeing a huge positive revenue impact from Mobile, which has grown 2.5x in the last 12 months to a run rate of over $2.5 billion.
Nikesh Arora, Senior Vice President and Chief Business Officer:
Larry mentioned $2.5 billion as a run rate. Our revenue growth continues to accelerate even in Mobile, driven primarily by mobile search. This growth, obviously, is driven both by the underlying expansion of Android devices and of tablets, as well as stellar performance of our sales teams who are working closely with our customers to help them craft compelling mobile advertising solutions. Many advertisers have greatly increased the size and frequency of their mobile campaigns. Mobile is becoming a must-have. This includes clients like InterContinental Hotels Group, which spans pretty much across our entire portfolio of properties, including Mobile search, Mobile GDN and AdMob.
To repeat the nuggets:
I'm not a big fan of the Swype keyboard but many people are. Yesterday Nuance agreed to acquire Swype for $102 million, $77 million of which is up front. The rest will apparently be paid 18 months later:
The aggregate consideration payable to the former shareholders of Swype consists of $102,500,000, of which $77,500,000 was paid at the closing and the remaining $25,000,000 (the “Contingent Consideration”) is payable on the eighteen month anniversary of the closing.
Numerous people have now reported on the deal but almost no one has penetrated the rationale except to say, in effect, "Swype is popular." (Read my colleague Dan Miller's interesting and somewhat different take on the acquisition.)
When I first read about the deal on Mike Arrington's new blog Uncrunched I was puzzled. Why would Nuance be spending $102 million for technology it already owns. The Nuance Flex T9 Android keyboard does speech and Swype-like tracing, among other things. It's the most complete Android replacement keyboard in the market.
In fact Nuance often favorably compared itself to Swype, saying that it effectively out-swyped Swype itself. As mentioned Flex T9 does more than Swype; it's more flexible (hence the "flex" part). So why would Nuance buy Swype? There are a few potential reasons:
Stil it doesn't entirely add up for me. I'll be curious to get Nuance's perspective and see where they're going to try and take their keyboard business.
Flex T9 costs users $4.99; so maybe there's a revenue aspiration in the acquisition as well (bolster the offering). It's not clear whether that $4.99 pricing will be extended to the otherwise free Swype or whether Nuance will will rebrand the Flex T9 as Swype and make it all free.
You can see Flex T9's Swype-like capabilities in the video below.
There was perhaps a decade of an embryonic mobile Internet access before the iPhone appeared in 2007. But it took the Apple device to mainstream and give birth to what we know today as the mobile Internet. It can be said with some confidence that no other individual is more directly responsible for the mobile industry as it looks today, including mobile advertising, than Steve Jobs.
Apple announced that he died this evening and issued to the following statement:
At 1pm Eastern time we'll know how many of the iPhone 5 rumors are true. We'll learn whether Sprint has "bet the company" on the new iPhone and whether it's getting some form of exclusivity. (Extended exclusivity would be foolish for Apple.)
We'll know whether there are two devices or one and whether one of those is a different (larger) form factor than the iPhone 4. A larger screen is very much in demand, especially with Android devices now routinely exceeding 4 inches.
We'll also hear more about the anticipated "Assistant," built on the earlier Siri acquisition. Some people have called it a "game changer" but that very much remains to be seen. Siri itself was novel and sometimes useful but not a "game changer."
We'll also discover whether the new iPhone (or iPhones plural) run on both CDMA and GSM networks. The new device(s) won't be 4G enabled, however, according to the WSJ. This is certainly a disappointment to many.
Surveys have shown "unprecedented pent-up demand" for the next iPhone, leading some financial analysts to anticipate or predict that sales records to be "shattered." It will all be contingent on what Apple actually delivers.
Although many others don't agree, I believe that the iPhone(s) being introduced today is/are critical for Apple, which now has a less-than-annual refresh cycle. If there's only a "4S" device or one that doesn't reflect obvious improvements it will fail to generate sales that live up to the outrageous expectations that have grown up around the launch.
Android is now dominant in terms of sales and market share, though Net Applications data reflect that iOS dominates all other mobile operating systems combined in terms of Internet access.
Regardless Apple's early multi-year commitment to AT&T exclusivity in the US was a strategic mistake, allowing Android OEMs to establish momentum with "good enough" copies of the iPhone. However now, larger Android screens, 4G capabilities and other features make Android handsets preferable for many people. And for this reason and others, a Sprint-exclusive iPhone 5 won't cause many (or any) to change carriers.
Android phones are now strong enough that Apple's brand strength is not enough if the next iPhone doesn't "wow." The pressure is on the company and new CEO Tim Cook. There are only a couple more hours to wait.
The stakes are incredibly high for next week's unveiling of the iPhone -- higher than most people realize. With Android now firmly in the sales lead and fast on its way to being the top mobile OS around the world, Apple has to get this next iPhone right or Android will leave it in the dust. If the iPhone unveiled next week is great, the device will regain some lost market share and momentum.
I'm a great test case: I want to buy an "iPhone 5" but if the device is doesn't look any different and have a larger screen I won't.
At various points in the "next-iPhone hype cycle" we've heard the following rumors about what's being introduced next week:
We won't know what's true until next week. But a new survey from ad network InMobi confirms what I said above and previously argued: the next iPhone needs to be an obvious improvement (including cosmetically) over iPhone 4.
InMobi surveyed current mobile phone owners in the US, Mexico and Canada and found that a staggering 41% overall were intending to buy an iPhone 5. But far fewer were interested in an incremental iPhone 4S:
Nearly 30% of Android users were interested in switching (I'm among them) and a remarkable 52% of RIM users. As I said, however, if the next device looks the same and is merely an incremental improvement sales will turn out to be considerably lower than what they might have been.
In addition a similar looking iPhone 4S will send Apple's stock down because of fears that the company will no longer be able to compete against Android devices, which are "refreshing" much more quickly than Apple's annual cycle. I'm hopeful on a personal level that the new iPhone is not merely a minor change but offers a larger screen and new form factor overall.
This morning Amazon introduced a revamped line of E-Ink Kindles and lowered prices: Kindle Touch 3G for $149, Kindle Touch for $99 and a new, cheaper Kindle for $79. But the Kindle Fire, it's 7-inch color Android tablet was the star of the show.
It will retail for $199, which is probably break-even or a loss for Amazon. The company hopes to sell content and services to recover its costs and profit from device sales. And sell it will.
Most people will likely see it as an upgraded Kindle with benefits (apps, mobile web). Amazon's pricing strategy is not unlike giving away the printer to generate ink sales.
It will immediately become the most successful Android tablet. Yet it's an Android tablet without the Android brand or Google. Apps will come through Android's app store -- it's unclear whether the Android market will be available -- and content on the device will be dominated by Amazon's books, magazines and movies.
Here's how Amazon's pitching it to consumers:
The device was apparently built by the same company that built the RIM Playbook, which didn't sell. But the Amazon brand and software differences will propel the new Fire.
Bloggers love hyperbole and "X-Killer" headlines. But this is no iPad Killer; it's a better Kindle and a cheaper Android tablet. However its low price and "good enough" value proposition may impact some people who were thinking about buying an iPad. Where all the Android tablets to date seemed like iPad imitators the strength of the Amazon brand and the Kindle legacy will avoid that fate for Kindle Fire.
Kindle Fire is a 7-inch tablet; however it impacts the ability of other tablet makers to sell their devices, regardless of size, for more than $300 at the very outside (maybe $250). In other words, post-Fire $499 Android tablets are DOA.
All the data indicate that Android is increasingly taking over in the US market and globally. Recent Nielsen survey data argue that 43% of US mobile phone owners have smartphones now. As an aside figure is quite a bit higher than comScore's 35% number. Nielsen also (confusingly) says that 43% of smartphone owners are Android users (43% of 43%).
Significantly, however, a dominant majority of recent smartphone purchasers are choosing Android devices. The iPhone represents 28% of smartphones -- and an equal number of recent purchases.
Data released last week by ad network Millennial Media showed that Android dominated the sources of ad impressions on the company's network: 54% were from Android handsets, while iOS impressions had a 28% share -- exactly in line with the Nielsen survey data above.
Smartphones and "connected devices" (everything else) accounted for 86% of ad impressions on the network; feature phones delivered 14% of ad impressions vs. 33% in August of last year.
Despite the Android surge, the iPhone remained the top device on the Millennial chart. Herein lies something of a paradox: the iPhone bar far and away the favorite individual device. Yet, in the aggregate, Android is overwhelming it.
A recent survey conducted on behalf of UBS (confirming earlier ChangeWave surveys) shows that the iPhone has the highest loyalty and retention rates of any smartphone. While current customers of other smartphone OEMs are far less loyal, with especially bad news for RIM and Nokia (charts via GigaOm).
The iPhone's "implied retention rate" from this relatively small survey of just over 500 smartphone users is 89%, down somewhat from a year ago but much greater than competing handsets.
On the cusp of iPhone 5's release, there's considerable speculation about the device's impact on the market. It appears that Sprint will finally get the iPhone in the US, although it's less certain to come to beleaguered T-Mobile. This will give the device a boost but probably won't do much to stop Android from continuing its climb to mobile OS dominance.
Card.io was started by a couple of former AdMob engineers and product managers to solve what they perceived to be a major problem in so-called "m-commerce," accepting plastic payments. There are a ton of companies competing in the mobile payments segment but there's nobody right now doing what Card.io is doing.
Card.io uses the smartphone camera to enable consumers to get credit card information into the phone efficiently without keying in 16 digits. Their SDK is intended for developers and publishers who want to sell things via their mobile sites. Card.io doesn't compete with Google Wallet or Square; it's not merchant-facing or consumer-facing. It solves the problem of abandonment when consumers confront the proposition of entering credit card numbers for the first time into mobile websites.
One of the major reasons why Amazon is "killing it" in mobile commerce is because the company already has your credit card on file so the friction involved in completing the transaction on a smartphone is eliminated. They also have a trusted brand and have put huge effort into optimizing for mobile.
I asked CEO Mike Mettler about potential security concerns regarding taking and transmitting pictures of credit cards via smartphones. He said they don't store credit card information and are very specific and careful about security in their messaging. He said that they anticipated this problem but so far haven't seen the concern materialize.
In my view this is a potential "game changer" for e-tailers that don't or can't have per-existing direct relationships with consumers (stored credit cards). I would expect any retailer who sells goods online to integrate this capability into their mobile sites. I would also expect that Card.io will be an acquisition target in 2012.
The company currently charges a per-scan fee to developers but will probably be moving to a percentage-based transaction model. Below is a link to a video that demonstrates the process.
PayPal, Google, Visa, Amex, Square, mobile carriers and others are competing in the rapidly developing world of mobile payments. NFC is one vision (though mass adoption is several years off if at all), while there are others such as Square and PayPal that are pushing NFC-free shopping concepts or tools.
Earlier this week PayPal laid out a very comprehensive and ambitious vision for the "future of shopping" and payments. It's a holistic concept that involves merchants, consumers and advertising; and it's built in part on recent acquisitions: Zong, Milo and Where.
PayPal wants to bring together payments on any device (call it "cloud payments") with offers (demand generation), "local search" and store inventory data. It's a strong vision and being smartly knit together through acquisitions and PayPal's existing assets. Look for them to make more acquisitions.
PayPal has the resources and most of the assets to make a pretty successful run at this vision. One of its great strengths is that it doesn't require infrastructure upgrades to work: consumers don't need new NFC-enabled devices nor do merchants need new POS terminals. So adoption could be more immediate. But there's a problem in PayPal's brand clout.
Visa, Mastercard, Amex, Google (even potentially Amazon) all have stronger brands than PayPal or eBay. And I think this is a major challenge for the company in getting merchants and consumers on board en masse. PayPal will also need to revamp and reduce its fee and commission structure to gain broader usage and adoption for all the scenarios envisioned in the video below.
In my mind, however, the brand issue (strength, trust) is a profound obstacle standing in the way of the realization of this otherwise powerful vision.
The TouchPad "dumping" by HP ($99) set off a frenzy of buying and led HP to briefly reconsider its plan to discontinue the device. HP remains undecided about whether it will simply license WebOS to third parties or sell it outright. HTC is reportedly among those considering buying WebOS, if it's for sale, although Samsung has rejected the notion.
Whether buying WebOS is smart or futile is the subject for another discussion.
Regardless, the demand created for the lower-cost TouchPad may have been instrumental in convincing Amazon to price its forthcoming Kindle-Android tablet at $250 (the Nook Color is also $250). This pricing is speculation but pretty reliable speculation.
It may well be that just as there's a de facto $200 ceiling on smartphones (with carrier subsidy) there may now be a $300 or $350 ceiling emerging for non-Apple tablets. People haven't wanted "imitation" tablets that cost the same as iPads. Below is a chart from a ChangeWave survey about US consumer tablet demand.
Source: ChangeWave (via Fortune)
But consumers will buy non-iPad tablets if they're substantially cheaper -- as the TouchPad rush indicated.
Interestingly the publisher of the Philadelphia Inquirer, Philadelphia Daily News and Philly.com is offering a $99 tablet provided users agree to a two-year digital newspaper subscription. Two things are interesting about this: the $99 price point and the effort to use a wireless carrier business model in the context of a newspaper.
So far non-iPads have yet to sell very well. For example, the 7" Samsung Galaxy Tab reportedly sold only a fraction out of millions shipped. But that will change if prices come down far enough -- again below $350 or $300. Then we'll see these devices take off and probably more tablet apps for Android, which basically don't exist right now.
Apple will probably continue to keep its iPad prices where they are unless we see dramatic sales increases for Android tablets. We're still at least six months to a year from an answer to that question.
Comscore has released data this morning on smartphone usage across the "EU5," which encompasses France, Germany, Italy, Spain and the UK. Symbian-based smartphones remain the most prevalent. However they're in decline, while Android devices have now passed the iPhone to become the second most common smartphone type in these five countries.
Comscore says there are roughly 88.4 million smartphone users in the EU5 (Spain and the UK have the greatest smartphone penetration). That compares to comScore's estimate of 81.9 million smartphone owners in the US. By contrast, Nielsen says US smartphone owners comprise 40% of the market or more than 93 million people.
Microsoft mobile operating system handsets (including Windows Phones) are off almost 5%, which is an ominous sign for the coming Nokisoft partnership. However great hardware-software integration could give Europeans a reason to switch or upgrade from existing Symbian handsets.
Below are lists of "mobile content" activities and penetration rates across the EU5, contrasted with the same data from the US market. With the exception of the UK market mobile app usage in Europe is considerably lower than in the US, while text messaging is lower in the US than Europe according to these data.
It's all but 100% certain that the iPhone will be coming to Sprint -- and maybe T-Mobile as well -- as soon as next month. The rumor is that Sprint will offer unlimited data on the iPhone as a differentiator vs. AT&T and Verizon. The pricing would probably be $99 (plus a $10 data supplement) in all likelihood.
By offering unlimited data Sprint believes it can lure customers from AT&T and Verizon. I initially thought that was a correct assumption but at $100 per month it may not be. With more aggressive pricing it would work. But probably not at $100 a pop; there's too much "inertia" against switching.
There are also those who believe that Sprint would have to move to tiered pricing once really heavy iPhone data usage kicked in. I don't agree; Sprint has lots of Android customers (including me) whose data usage patterns are not substantially different than iPhone owners. And Sprint's network has considerably more capacity than AT&T for example.
Sprint would probably see upgrading by many of its customers, from feature phones or potential switching from Android devices. I would qualify as one in the intended latter category. I've been reasonably satisfied with my Android EVO but have had pent up demand for an iPhone for about five years. I just haven't wanted to switch carriers.
In a related bit of news, yesterday JD Power and Associates released its smartphone customer satisfaction rankings and found that the iPhone was on top for the sixth straight time:
Apple ranks highest among manufacturers of smartphones in customer satisfaction. Apple achieves a score of 838 and performs well in all factors, particularly in ease of operation and features. HTC (801) follows Apple in the smartphone rankings.
Samsung ranks highest in overall customer satisfaction with traditional handsets with a score of 718. Samsung performs well in three factors: performance, ease of operation and features. LG (717), Sanyo (716) and Sony Ericsson (709) follow Samsung in the traditional handset rankings.