So Verizon is coming out with a new phone called the Droid that's based on Google's new Android software.  It's being touted as a possible iPhone killer, so I wanted to explore what makes the iPhone so dominant and why killing it isn't that straight forward.

The big plus for the iPhone at this point is the app store.  Much like iTunes helped to entrench the iPod as the dominant MP3 player, the app store is helping the iPhone similarly dominate.  If I want to switch over to the Droid, on top of all of the carrier related hassles, I have to find new apps for my phone.  While the phone itself could be far superior, there could be a number of apps I use daily that don't have suitable replacements on the Droid. 

The big plus for the Droid though is Verizon.  AT&T's network is decent but not great and there's rampant stories of people having problems with dead spots.  AT&T has been a barrier to rolling out features like MMS because of concerns over their network capacity.  I routinely spend time in gaping dead spots in AT&T's network and I've largely just learned to cope or find a WiFi network nearby.  So if I could take my iPhone onto the Verizon network I'd be thrilled.

My thinking is that a lot of the people who wanted to get an iPhone but have had reservations about AT&T's network are probably going to go with the Droid.  The big question though is how many people who have iPhones are going to switch.  My guess is it will be a pretty low number.  The people who do switch aren't going to be switching because they want the Droid more, but rather they just hate AT&T's network. 

So it would seem that Verizon is buying out Alltell to the tune of $28 billion.  I have little doubt that this sill result in synergies that will help bring better services and lower prices to customers.  So let's see, this will leave us with AT&T, T-Mobile, Sprint and Verizon.    I'm pretty sure that all other carriers are some subsidiary of those four, or are renting network time from one of them (Virgin Mobile, etc). 

Now, one of the grand theories that the FCC has been operating under of late is that there's plenty of competition and, therefore, there's no need to do much in terms of regulation.  Hogwash.  In the current market, AT&T and Verizon are dominant, and it's very likely that, before long, T-Mobile and Sprint will go away too and we'll have only two carriers for celluar service.  So if I wanted data service to my home I'd end up with a choice between:

1. AT&T
2. Verizon - would necessarily be wireless
   
3. Comcast

That's it.  That's the big competitive marketplace.  Now, today, to be fair, I do get service from Speakeasy, but that data is all routed over AT&T's local loop and I pay a premium for it.  Companies like Speakeasy have slowly been giving up on consumer DSL service because of the thin margins and the constant problems with local loop providers interfering with their service.  Without the FCC bringing down the hammer, and forcing local loop providers to open up their lines, that will only get worse.

Does anybody here honestly expect prices to remain low and services to continue improving when there's only three companies competing for my dollar?  Will customer service be a priority?  I REALLY doubt it.