Android Will Make Verizon Relevant

Android-VerizonWired Gadget Lab recently said what a lot of people are thinking: Why does Verizon “have the worst smartphones?” Verizon’s take? “Customers don’t care about phones. They care about the network and our network is the best.” Ok, so they didn’t really say that, but it’s implied in their advertising. When was the last time you saw a Verizon commercial that wasn’t about the network?

Verizon is proud of their network. So proud, that they’ll let customers go mid-contract if the customer is having network-related problems. I know this because I used to be a Verizon customer. I had great coverage until I moved to a new house. Verizon doesn’t guarantee coverage inside buildings but I couldn’t even get a good signal in my driveway! After some calls to customer service, Verizon offered to let me cancel my account one year into my two-year contract! Without any penalties!! Verizon is all about the network.

What about the phones? Aside from Verizon’s penchant for trying to charge for features that should be free (bluetooth and GPS to name a few), are their smartphones really that bad? A quick look at Big Red’s lineup shows more or less the same Windows Mobile and Blackberry phones that Sprint carries. The same phones, yet Verizon gets the thumbs down in the smartphone department? Verizon must have thought they were pretty safe with their smartphone offerings. They obviously did not anticipate—or take seriously—the effect that new smartphone operating systems would have on consumers.

Two years ago there was the iPhone. Love it or hate it, the iPhone introduced a modern, easy to use, and exciting operating system. Add in the App Store and you have the anti-Verizon smartphone. What iPhone started, Android is building on. And then there is the Pre with WebOs. Within a span of two years, three new and modern smartphone operating systems have come onto the market and are now available with multiple hardware configurations, on multiple networks worldwide—and none of them are Verizon. Herein lies the problem for Verizon.

Customers want a phone with a modern OS, real-time updates, a place to download new apps, etc. The customers that used to buy “feature” phones are now looking at these new smartphones and getting excited. The WinMo and BBerry customers are looking at their antiquated operating systems and wondering what they were thinking. Verizon customers are wondering if they’ll ever get the chance to upgrade to a cool new smartphone.

All is not lost. Apparently Verizon has realized that they are behind in their offerings and have said that they will carry at least one Android device this year—widely believed to be the Motorola Sholes. In addition to the Sholes there are rumors that Verizon will carry three other Android phones this year. Even if the rumors prove to be false, it is fairly safe to assume that there will be additional Android phones available on Verizon over coming year. They are also slated to get the Palm Pre at the end of Sprint’s exclusivity. I am not discounting the Pre’s effect on Verizon’s phone lineup; I just believe that over the next six months to a year there will be more Android devices on Verizon than WebOS devices and thus more choice.

Current and potential Verizon customers and can once again be excited about Big Red’s phone offerings. Verizon will be relevant again, thanks in large part to Android. Verizon was famously cold towards Google and Android a year ago. There is some irony in that.

  • bruce

    I have never used Verizon so I don't have any first person experience. As I watch them from afar, one thing I admire about them is their ability to use spin and rumors. Before the iPhone first came out, the big rumor was that Verizon turned Apple down before ATT accepted the iPhone. When the Palm Pre came out, Verizon said they would have it before the end of the year. Now that people are down on the Pre, the rumor is that Verizon will not pick it up.

    There have been a lot of Android phones announced recently. So Verizon is going to carry one, and maybe three more? I wouldn't be too sure about that. One thing I am sure of is that every public statement, leak, and rumor about Verizon is designed to keep people from switching to another carrier.

    • Justa Notherguy

      Until recently, I've held Verizon Wireless accounts for a decade or more. From my experience, across all phone models and across the USA, their call network is superior. Now, I'm sure somebody can cite some towns or buildings where that's not true. And I'm not saying VZW service is flawless – quite the contrary, especially in cloudy or rainy weather. I regularly had incoming calls go straight to voicemail and many other calls, both in & out, simply vanished except for the record in my phone's call log. But, that said, there must be a good reasons they manage to keep all those millions of customers.

      Meanwhile, VZW does seem to be slowly recognizing a new danger: their lack of a hot-selling smartphone is having a significant effect on customer turnover. (Even if they chose to ignore it, they couldn't because Wall Street picked up on the trend, last year.) And its only getting worse; for 2009 Q2, cellphone sales are down, overall, but smartphone sales are up [ It doesn't take a Harvard MBA to see how this is bad news for VZW…the US carrier that's seen by most users (including their own customers) as having the worst smartphone options.

      So, sure – could be its just spin. Maybe 75% of VZW customers don't care about touch-screen UIs, 'app markets' and the like. And I have no doubt that the top VZW execs will always vote to throttle any new phone's OS, so as to keep their (increasingly archaic) 'walled garden' revenue structure intact. But you can bet they know they have got to do something about this smartphone/perception problem. And with sales of Android units set to explode over the next few quarters, they had better do it, fast.

  • Joe

    Relevant? Verizon has more subscribers than you could ever count. They’re plenty relevant. Low end phones = ARPU * volume = ca$h. VZW does not need Android. Not by a long shot.

    • You are correct. But that vision is shortsighted. As Jeremiah pointed out in the article, smartphones are what people are looking at. And as the younger generation gets older and has more money, they'll be able to go to carriers with quite respectable coverage. "It's the network" is a phrase that worked when cellular phones were in their infancy. Now the network doesn't mean so much. What they can do on that network (besides making calls) depends primarily on the phone.

  • DavidR

    While I'm inclined to agree with Joe, I also have to say that Verizon's attitude toward crippling phones so they can sell the "features" the phone was supposed to come with is going to leave most Android fans saying "Android doesn't need Verizon either".

    We'll have to see how VZW implements Android on their network, but given past history I'm going to say that the educated Android shopper (that will be most of the Android shoppers) is going to shop elsewhere.

  • David B

    I was a Verizon customer for a while as a Palm Treo user. I noticed that Verizon was much slower than other carriers rolling out new models of phones. It might have something to do with the fact that their network uses CDMA instead of GSM like the rest of the world, so phone manufacturers don't try to build for them first. Also I've heard that they do a lot more testing of the phones than other carriers do. I don't think that being first with new smartphones is important to them.

  • Stan

    It will be interesting to see how they cripple the droid. The Droid is not a "Google Experience" device, which means if Verizon wanted to be up to its old tricks of locking everything down, they could do it.

  • Stephanie

    Locking everything down? From what I've heard, the device will accept apps from any users that submit:

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