In its second-largest acquisition, Amazon buys the company for $970 million.
The deal will expand adoption of smartphones and subsequently boost m-commerce, experts say.
Apple Inc. and telecommunications giant Verizon announced today that beginning Feb. 10 Verizon will begin shipping iPhones for use on the Verizon wireless network. Through a deal with Apple, AT&T has offered the iPhone exclusively since the popular smartphone launched in June 2007. The new deal with Verizon gives Apple the opportunity to sell millions more iPhones and expand its growing share of the competitive smartphone market. Verizon reports 93.2 million wireless subscribers; AT&T reports 92.8 million.
The Nielsen Co. recently released figures showing from June 2010 to November 2010, the iPhone grew smartphone market share from 27.9% to 28.6%, Research in Motion’s BlackBerry fell from 33.9% to 26.1% and Google Inc.’s Android rose from 15.0% to 25.8%. According to comScore Inc., comparing the three-month period ending in August 2010 to the three-month period ending in November 2010, BlackBerry’s market share dropped from 37.6% to 33.5%, Android jumped from 19.6% to 26.0% and the iPhone increased from 24.2% to 25.0%.
The difference in market share projections stems from the number of consumers in the research firms’ mobile phone user panels: Nielsen surveys 20,000 mobile phone users while comScore surveys 10,000.
One way or another, the iPhone has always been the initial focus of most retailers going into mobile commerce. Apple took the lead in the advanced, touchscreen smartphone market from the beginning. And its users differed from those of its then chief rival BlackBerry. IPhone owners use the web and mobile apps more heavily than BlackBerry users, who tend to focus more on business use of their phones. Now Android is coming on strong, and Android users behave more like iPhone users. The Verizon deal gives Apple the opportunity to grow its massive customer base even more.
“With Verizon’s introduction of the iPhone, millions of Verizon customers now have the opportunity to purchase the smartphone that helped make mobile commerce a reality,” says Dave Sikora, founder and CEO of m-commerce technology provider Digby. “Verizon’s iPhone investments will accelerate adoption of smartphones, which is the precondition necessary for quality mobile experiences.”
And retailers, experts say, will have to make sure they have quality mobile experiences for the iPhone, which now with a greater audience will juice up mobile commerce even more.
“In terms of relative priority, assuring a good iPhone experience is already likely as high a priority as there can be when developing for mobile unless your audience skews decidedly to Android or BlackBerry for some reason. The activity in apps and on the mobile web already indexes highest on Apple iOS devices,” says Dave Lawson, director of mobile engagement at Knotice, a direct digital marketing firm, referring to the iPhone operating system. “In m-commerce, I think that we might see a slight acceleration in what is already a historically unprecedented adoption curve. The brakes are already off the speeding train, this will just give it an additional push.”
Verizon will sell the 16-gigabyte version of the iPhone for $199 with a two-year contract, the same price as AT&T. It will sell a 32-gigabyte version for $299. The iPhones both companies offer are essentially the same. However, Verizon will enable its iPhone users to turn their iPhones into Wi-Fi hotspots for up to five other users, a service AT&T does not offer.