Apple may not have reached its goal of selling 10 million iPhone 3Gs yet, but the company has spurred a large number of consumers to abandon their carriers and flock to AT&T, the exclusive mobile carrier for the iPhone in the U.S.
News reports are circulating that predict Apple is nearing the sale of the 10 millionth iPhone 3G. Apple hasn't confirmed the rumor, but analysts said it's possible. Apple sold one million of the devices in the first weekend after its introduction.
"Apple executed well. The company took sufficient time to build up enthusiasm prior to launch. They launched two successful iterations of the device. They managed to get the device sold in more than 20 countries. And they've become a player in the market," said Michael Gartenberg, vice president of mobile strategy for Jupitermedia.
Verizon Loses to AT&T
While the tech world waits for Apple to report the 10 million iPhone 3G mark, the NPD Group has reported that 30 percent of U.S. consumers who purchased Apple's iPhone 3G from June through August switched to AT&T from other mobile carriers.
Nearly half (47 percent) of new AT&T iPhone customers who switched carriers came from Verizon Wireless. Another 24 percent switched from T-Mobile, and 19 percent switched from Sprint, according to the NPD's iPhone 3G Report.
"The launch of the lower-priced iPhone 3G was a boon to overall consumer smartphone sales," said Ross Rubin, director of industry analysis for the NPD Group. "While the original iPhone also helped win customers for AT&T, the faster network speeds of the iPhone 3G have proven more appealing to customers that already had access to a 3G network."
iPhone Gains 17 Percent of Market
Before the iPhone 3G's launch, iPhone sales made up a mere 11 percent of the smartphone market. Since the launch, Apple has gained an additional six percent of the market.
Apple has made headway, in part, by cutting prices. NPD data show the average price of a smartphone sold between June and August was $174, down 26 percent from $236 during the same period last year. Apple lowered the iPhone 3G's price to $199 through a deal with AT&T.
The result is that AT&T had the best-selling smartphone during June through August, based on unit sales. RIM's BlackBerry Curve was second, followed by the BlackBerry Pearl and the Palm Centrino. But the iPhone has a new competitor coming for the fourth quarter -- T-Mobile's Android-based G1, due out later this month.
Google's iPhone Challenge
Of course, there are no guarantees that a Google Android-based phone will repeat the iPhone's success. If Google wants to compete with Apple on the smartphone front, the company must focus on getting its platform beyond one device and one carrier in the U.S., according to Gartenberg. And Google also needs a strong story.
"Google has a slightly different message because at the end of the day Apple is an end-to-end controlled system. In many ways, Android is almost the antithesis of Apple. It's designed to be an operating system available for anyone, a platform available to anyone," Gartenberg said.
"We are going to see many different interpretations of Android," he continued. "The key for Google is to get those other interpretations into the marketplace while making sure those interpretations are complementary rather than contradictory to each other."