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Good news, bad news for Verizon, Android and iPhone

by Howard Wolinsky

Has the tide been turned in the struggle for market dominance between iPhone from Apple and Android smartphones in the United States? Or is the other shoe going to drop for iPhone with a dip in sales being reported by Verizon Wireless?

Both may be true, according to reports from the weekend.

For months, it looked as though Android from Google would rule the smartphone world. In fact, Android still does, though it is “stagnating” while Apple has been surging.

The balance of power seems to have shifted a bit, with things looking up for Apple (thanks to a boost from the iPhone for Verizon Wireless). However, if you’re picking sides, be cautious. There may be a downturn in Verizon’s sales of iPhones.

Turning the tide? Android still ahead but ‘stagnating’

“Read this and weep, Android, BlackBerry, and AT&T fans. The…launch of the Apple iPhone on Verizon appears to have turned the tide between iPhone and Android smartphones in the United States,” said Cindy Johnson of Motley Fool at MSNBC.com.

This is based on a Nielsen report showing that though Android still outsells Apple, its market share has started to stagnate at 27 percent in recent months while iPhone has experienced a surge to reach 17 percent in May, up from 10 percent in February.

Apple seems to be eating Research In Motion BlackBerry alive. Nielsen’s said RIM’s share fell to 6 percent in May from 11 percent in February.

What a difference a year makes.

In May 2010, RIM was the market leader with 12 percent market share, compared with 9 percent for Android and 7 percent for iPhone, Nielsen reports.

Verizon to the rescue

Remember the dropped-call issue problem when AT&T had the exclusive to sell iPhone?  Many observers wondered whether dropped calls and service issues in such places as New York City and San Francisco was a reason Android smartphones began outgrowing iPhones in early 2010. “Nielsen's latest survey of U.S. smartphone purchases suggests that it was, and now Verizon has come to the rescue,” said Johnson.

Verizon sales dipping?

At the same time, a Goldman Sachs Group analyst told Bloomberg that Verizon’s iPhone sales took a dip in the second quarter.

Verizon Wireless, the largest U.S. wireless provider, will probably report its “iPhone sales will likely be a touch below 2.2 million” in the first quarter, said Jason Armstrong in a research note. Verizon began sales of the smartphone Feb. 3, more than a month into the first quarter.

Verizon declined comment.

Sales of Verizon’s other smartphones, including the Android-powered HTC Thunderbolt on Verizon’s fourth-generation network, were above expectations, Armstrong said.

The smartphone wars will continue as that market is growing.

Nielsen is reporting that 38 percent of mobile phone owners in the U.S. now have smartphones, with 55 percent of the phones sold between March and May being smartphones.