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iPhone killer? Verizon's LG Prada to heat up competition

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TheStreet.com wrote that Verizon (NYSE: VZ) will launch an "iPhone Killer" later this summer to stem the momentum that Apple (NASDAQ: AAPL) has already built in the market place for its iPhone. The iPhone has yet to sell one unit and already the competition is heating up.

Apple has conservatively modeled for the iPhone sales and has not let Wall Street analysts get ahead of themselves. Good strategic move, setting up Apple to under-promise and hopefully over-deliver. This has been its modus operandi since the popular iPod took off in late 2003-early 2004. But behind the scenes, several other cell phone manufacturers and carriers have been nervous and fretting about iPhone's potential ability to captivate the market. The iPhone could also raise the bar on overall performance expectations and more importantly, upset the fragile pricing structures in the industry. More bells and whistles and prices eventually coming down dramatically.

Verizon is allegedly ready to launch the "Prada" version of its own chic phone this summer. The endgame, of course, is to avoid losing customers to AT&T (NYSE: T), which currently has an exclusive with Apple. Verizon will pull-out all the stops necessary with a heavy marketing spend to attempt to slow Apple's huge momentum.

From a numbers point of view, Apple is sitting in the catbird seat, having modeled for 10 million units to be sold by end of 2008. This would represent just about 1% share of the handheld market . Apple could far exceed those estimates as the "viral" effects of the iPhone hit the market. The same I-gotta-have-one factor that propelled the iPod tidal wave.

The summer of 2007 should be most fascinating to watch as these new devices swarm an already anticipating audience. Let the games begin...

Georges Yared is the CIO of Yared Investment Research where he explores more growth stock ideas.

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Last updated: November 25, 2009: 09:24 AM

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