Apple sets foxes lose in US smartphone henhouse

Apple’s success with the popular iPhone has set the foxes loose in the smartphone henhouse. Now Verizon, Microsoft and AT&T are all scrambling for a piece of the action – to Apple’s benefit.

It’s no surprise that everyone else wants in on Apple’s success. The company hawked some 14m iPhones last year and may sell as many as 45m this year, according to Piper Jaffray research. And it takes cuts on revenues from applications sold to users through its iTunes store.

The iPhone’s popularity has also been a boon for AT&T, as its exclusive contract in the US means each sale leads to a pricey calling and data contract. That contract expires next year, which will allow US operators to compete for Apple’s affections. And Apple might introduce a “lite” iPhone even earlier, because such a phone may fall outside the purview of the AT&T agreement.

Indeed, Apple and Verizon are now in talks about a new device that would be exclusive to the latter’s network. That would mean greater distribution for Apple, a new source of revenues for Verizon and less growth for AT&T.

OR the “lite” iPhone could merely be Apple vapourware that never comes into existence – yet leaves Apple with an attractive new contract from AT&T when it disappears.

Meanwhile, Microsoft and Verizon are also now said to be developing an iPhone rival to hit the shelves next year. But to judge by Microsoft’s track record, even if Apple gets a new rival, it’s unlikely to be a strong one. The software giant’s would-be “iPod killer”, the Zune digital music player, never caught on. It merely accentuated how good the iPod was.

Whether AT&T and Verizon end up selling Microsoft phones, Apple phones or both, it’s hard to see how Apple loses. It created a hit product and gets to sit back as everyone else tries to jump on the bandwagon.