Yesterday I wrote about comments made by Verizon Wireless CEO Ivan Seidenberg regarding whether the company will ever offer its 92 million subscribers Apple's wildly popular iPhone.
Actually, Seidenberg's comments about Verizon and the iPhone amounted to a "no comment," as he essentially punted the question by saying he "couldn't speak for Apple." He did, however, indicate that Verizon Wireless would like to carry the iPhone, which right now runs exclusively on AT&T's wireless network.
But in a post this morning by Philip Elmer-DeWitt over at Fortune, RBC Capital Markets managing director Mike Abramsky suggests that an Apple-Verizon deal may never go down.
According to Abramsky's note sent to clients on Friday (and as reported by Elmer-DeWitt), the sticking point is Google's Android mobile OS. From Verizon's perspective, signing a deal with Apple could undermine the wireless carrier's Android franchise, which is becoming increasingly valuable.
Android has increased its smartphone market share in the U.S. to 17 percent in July from 12 percent in April, according to comScore. This comes at the expense of RIM, Microsoft and, yes, Apple, whose share dipped during that period to 24 percent from 25 percent. Which might not seem like much, but again, this is just a three-month period.
On the other side of the bargaining table, Abramsky writes, Apple "may not want iPhone to be second banana to Android at Verizon, and may be unwilling to accept less than prime marketing, subsidy support for a Verizon iPhone."
I don't want to misread Abramsky's point, but it almost sounds as if he's suggesting this is about Steve Jobs's ego. Jobs certainly has an ego, but Apple got where it is today on his business acumen, drive, ability to deliver quality products and incredible marketing ability. I can't imagine Jobs refusing to cut a deal with Verizon Wireless because the iPhone won't get top billing, not if he can sell a few million more of his smartphones.
Business deals are struck when both sides see benefits. Millions of Verizon subscribers would love to have iPhones. Apple wants to preserve and grow its market share. Given those goals, second banana is better than no banana.
Also consider this: A new study released by Deloitte suggests that nearly half of all iPhone users would dump AT&T in a heartbeat if Verizon began offering the Apple smartphone.
I'm no analyst, but just looking at the broad picture, it seems likely the two companies will get past the posturing and work out an agreement. Otherwise they're leaving money on the table.