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Last updated: Friday, December 18, 2009

Verizon Wireless made clear from the start that its Droid smartphone was designed to put pressure on Apple, the maker of the iPhone, and AT&T, the exclusive U.S. iPhone carrier. As part of a $100 million marketing push, Verizon Wireless enumerates several ways it believes the Droid outperforms the iPhone. Yet analysts say the Droid and other devices that sport the Android operating system may also take a toll on Research In Motion, the maker of another smartphone, the BlackBerry. “It’s clear there’s been a lot of marketing at Verizon around the Droid, so that is going to hurt RIM,” says Raymond James analyst Steve Li. On Dec. 17, investors will get a glimpse of how big an impact, if any, when Research In Motion releases results for the quarter that ended Nov. 28. Verizon Wireless, owned by Verizon Communications and Vodafone Group, began selling the Droid on Nov. 6. Other Android phones have been available longer, but the Motorola phone carried by Verizon Wireless has received some of the most glowing reviews and is generating the greatest buzz. Mobile analytics firm Flurry estimated that the Droid sold as many as 250,000 units its first weekend on the market. Droid sales neared 1 million by the end of November, according to RBC Capital Markets analysts. Neither Motorola nor Verizon Wireless has released an official tally. Narrowing Margins RIM’s results already reflect increasing competition from the iPhone. For the current quarter, which ends in February, RIM is expected to forecast narrowing margins, a measure of profitability, according to analysts surveyed by Bloomberg News. Slipping margins indicate that RIM is spending more to produce feature-packed phones that can more readily vie with the iPhone and other advanced handsets. In the third calendar quarter, RIM had about 19 percent of the smartphone market, compared with 38 percent for Nokia,…

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Research In Motion May Feel Android Effect

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