Dow Jones Newswires | Apple’s upcoming iPhone, reportedly compatible with Verizon Wireless’
network, could help the carrier take the lead in its fierce two-horse
race with AT&T and have a domino effect throughout the smartphone
industry.

The nation’s two largest carriers are neck-and-neck each quarter in
nabbing the highest quality customers. But where Verizon Wireless has
done it with a myriad of products and its reputation for network
quality, AT&T has heavily relied upon its exclusive agreement with
Apple to sell the iPhone.

Companies that could be threatened if Verizon strikes a deal with Apple
include Motorola, which sells Verizon Wireless’s flagship Droid, and could struggle to create devices to match the iPhone’s hype. Motorola
shares rose 1 cent to $7.23 on Tuesday.

“There is undoubtedly enormous pent-up demand for the iPhone on Verizon’s superior network,” said Craig Moffett, an analyst at Sanford C. Bernstein.

Moffett estimates the shift to a non-exclusive model would allow Verizon Wireless to gain up to 3.5 million more new contract customers in the first six months, while AT&T would gain 1.4 million fewer customers in the same time frame.

Verizon Wireless, jointly owned by Verizon Communications and Vodafone Group. actually took the lead in customer growth in the fourth quarter, adding 1.2 million contract customers to AT&T’s 910,000.

Uncertainties remain. It’s unclear how Verizon Wireless would eventually price the device because AT&T pays a hefty premium to sell the iPhone at $200. While Apple is reportedly building an iPhone for release in September, there’s no guarantee it will run on Verizon Wireless this year. The device could instead be sold in China, where one of the dominant carriers uses the same network as Verizon Wireless.

“We wouldn’t count on a Verizon iPhone for the holidays,” said Bill Shope, analyst at Credit Suisse.