How a Verizon iPhone Might Upset the Smartphone World

It's hard to make too much of Tuesday's Bloomberg report that Verizon's going to start selling the iPhone come next January.

Should that change indeed come to pass, the decision to end AT&T's exclusive distribution of Apple's smartphone will reverberate throughout the consumer tech world.

Consumers who have been unhappy with AT&T's sometimes flaky reception will be ecstatic. But that's just for starters. The change also likely will impact the pace of Android adoption. For the last few months, Android phones have been selling exceptionally well through Verizon. Indeed, there's a new report that suggests Android is gaining ground on the iPhone.

But the availability of the iPhone perhaps may lure prospective Android customers who might been scared away from Apple's smartphone until now because of the reported carrier network problems nagging AT&T.

Oppenheimer analyst Yair Reiner says as much in a report he put out early Wednesday.

"Adding Verizon would significantly blunt the competitive threat from the Android platform, whose favored status at Verizon has been critical to its building momentum, he wrote. "We suspect the momentum could turn in the face of direct competition from the iPhone."

He also believes that Verizon has a good shot at selling at least 12 million additional units for Apple. At the same time, however, Reiner injected a note of due caution, reminding his subscribers that we've seen similar predictions before "so barring independent confirmation or a press release from one of the parties, it'd be rash to pop the champagne," he wrote. "Still, it's worth considering the potential implications."

All potentially good news for Apple - if it comes true - but also a double-edged sword for Verizon as it will raise questions about the company's capacity to handle the expected extra load on its network. Perhaps that's not out of reach for the nation's top wireless provider. There is a report that Verizon plans to activate and sell handsets in 25 US cities that would work on its 4G LTE network by this fall. That kind of speed would be substantially faster - perhaps by a factor of ten - than its current 3G network.

For more, check out a couple of good posts on the topic by Sam Diaz and Jason Perlow.