Verizon's Android gamble is paying off

Verizon Wireless' (NYSE:VZ) deepening partnership with Google, and its launch of six devices running Google's Android operating system (including the Droid X, which commercially launches today), is helping the wireless carrier grow its share of the smartphone market and effectively compete against AT&T Mobility (NYSE:T)--despite the fact that AT&T is the exclusive carrier for the popular Apple (NASDAQ:AAPL) iPhone.

A New York Times article notes that despite ongoing rumors that Verizon will begin selling the iPhone in the future, the operator doesn't need the iPhone to stay competitive. In fact, Verizon has steadily increased its smartphone market share to 26 percent in May, up from 20 percent in late 2008. In the same period, AT&T's smartphone market share slipped to 40 percent from around 45 percent, according to comScore.

Nevertheless, neither Verizon nor Apple has ruled out the possibility of Verizon eventually selling the iPhone. Analysts say a partnership between the two could double Apple's smartphone share. However, Verizon is known for keeping a tight grip on the devices it releases to the market; it typically controls the marketing campaigns and often installs its own applications. Apple, meanwhile, is known for driving a hard bargain with operators. Indeed, Apple is rumored to have secured AT&T as its operator partner because AT&T offered the best terms. Analysts estimate that Apple earns an average of $650 for each iPhone sold--the consumer pays upward of $200 and AT&T subsidizes the rest.

For more:
- see this NYT article

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