iPhone 5 in Sept, 'iPhone Lite' later will trounce Android: analysts

Google's Android platform reigns supreme among mobile operating systems, having a healthy installation across a number of devices, but Apple's iPhone is quickly changing that.

Couple this with the upcoming iPhone 5, and perhaps a pre-paid version, analysts are predicting that Apple would finally hoist away the number one mobile platform spot from Google.

Needham analyst Charlie Wolf notes that Android commanded 36.2 percent of worldwide smartphone market share in March.

But its month-to-month gain was just 3 percentage points, down from a 7.5-percentage-point gain in the December quarter, and a 9.5-percentage-point gain in the September quarter.

The slowing is because the Android platform fell from 52.4 percent of U.S. smartphone sales to 49.5 percent in the quarter - Android's first sequential loss in any region, he writes.

In our opinion, this is just the beginning of Android's share loss in the U.S., Wolf told investors.

The migration of subscribers to the iPhone on the Verizon network should accelerate this fall when Apple coordinates the launch of iPhone 5 on the GSM and CDMA networks. The iPhone could also launch on the Sprint and T-Mobile networks.

On the contrary, iPhone rose from 17.2 percent in December to 29.5 percent by March, according to IDC numbers.

He thinks the Verizon iPhone 4 launch, however, was mediocre. The real kicker, he explained, will be the launch of the iPhone 5.

On the one hand, many Verizon subscribers who plan to switch to the iPhone are still under contract and would have had to pay a significant early termination fee if they switched, he said.

On the other hand, when iPhone 4 launched on Verizon it was already eight months old, an eternity in the smartphone market. One reason Apple delayed the launch of iPhone 5 until September is that it reportedly plans to coordinate the launch of the GSM and CDMA versions of the phone. It's our expectation, then, that the anticipated surge in iPhone sales on the Verizon network is likely to occur this fall after Apple launches iPhone 5.

The Asia-Pacific theater could see a price war in Android handsets, as 38 different licensees compete, with top vendors Samsung and HTC perhaps drawn into the fray by the cut-throat white box makers of phones.

Emerging economies will force Apple to adjust its pricing scheme, Wolf believes, allowing for an emergence of what he calls an iPhone Lite, a lower cost prepaid iPhone.

The only way these second-tier licensees can survive is to compete on price rather than features. This, in turn, most likely will trigger a price war between Android licensees that could even engulf the name brand vendors.