That’s the argument put forth by Piper Jaffray analyst Chris Larsen in a research note to investors Monday. Larsen feels that the cost to Apple (AAPL) of developing a CDMA version of the iPhone for Verizon’s (VZ) network and the subsidies the company might lose by ending its exclusivity deal with AT&T (T) would be a small price to pay for the spike in iPhone sales they would create.

“Although the iPhone is a strong player in the smartphone market, expanding its multi-vendor strategy could allow it to dominate the industry, as it does with the iPod,” Larsen writes. “The U.S. market is the world’s largest smartphone market, but we believe there is a land grab in the U.S. for smartphone share.”

Expanding his argument, Larson adds, “Apple’s exclusivity with AT&T has left the door open for strong competition from competitors, such as Research In Motion’s Blackberries, Palm’s webOS smartphones and Google’s Android operating system on multiple smartphones from OEMs such as Motorola, HTC, Samsung, LG, and others. Making the iPhone available to the other 150+ million subscribers (~2/3s of subscribers) not on AT&T’s network could result in iPod like adoption.”

Keeping the iPhone exclusive–while it might enable Apple to do more innovative things, as COO Tim Cook noted yesterday during the company’s quarterly earnings call–would also give those rival devices and platforms more time to catch up. If Apple really hopes to keep its lead in the U.S. market, it must do away with exclusivity deals, the same way it’s doing away with them abroad.

That’s bad news for AT&T. Because, as I’ve noted here before, a move to nonexclusivity in the U.S. would brutalize the carrier’s subscriber base. Analysts have long said that a material number of AT&T iPhone users would flock to Verizon’s superior network given the chance.

Larsen agrees. “A move to non-exclusivity in the U.S. could have a material impact on the U.S. wireless carriers,” he writes. “AT&T could lose meaningful smartphone share, while we think all the other carriers would gain share. We believe Verizon would be the largest beneficiary of non-exclusivity and the development of a CDMA iPhone.”

Continuing, Larson explains, “With 35% of AT&T’s iPhone sales coming from new customers, we feel it is reasonable to assume the company’s total iPhone sales could decline by 30% or more and that Verizon could pick up the bulk of this lost share (why switch to AT&T for iPhone if you haven’t left by now and the device is now available through your carrier; Verizon’s network quality could be a reason to switch from AT&T).”

In the consumer market, Apple (AAPL) scored 811 points out of a possible 1000, exceeding the industry average of 765. Its closest rival, LG–the only other company to beat that average, scored 776.

Apple’s performance in the enterprise market was equally impressive. The company scored 803 points out of a possible 1000. That was 79 points more than RIM, whose BlackBerry took second place with a score of 724 points, the industry average.

And what of Palm (PALM) devices and smart phones running Microsoft’s (MSFT) Windows Mobile OS? Neither had a particularly remarkable showing. Among consumer smart phone users, Palm devices scored 731, while WinMo devices from Samsung and HTC both scored 739. And among business users, Palm devices scored 688, while WinMo devices from Samsung and HTC scored 697 and 692, respectively. The study, it should be noted, was fielded between January and June 2009, so it does not account for Palm’s new Pre handset. (See charts below; click to enlarge.)

Clearly, the iPhone has gained a fair bit of traction in enterprise in a relatively short time. Who was it again who said the iPhone “doesn’t appeal to business because it doesn’t have a keyboard”?

[Image credits: MacDailyNews, J.D. Power and Associates ]

“Throughout this report we have focused on the main ‘branded’ smartphones like iPhone, Android, Pre, BlackBerry, and Treo,” the market researcher explained. “And yet there are many more smartphones in use today, manufactured by the likes of LG, Samsung, Motorola, and Nokia, running either the Windows Mobile or Symbian operating system. What’s going on with these smartphones? For one thing, many users can’t identify their operating system. While Android users know they have a phone on the Android platform, most Windows Mobile or Symbian users have no idea what operating system is running their phone.”

That’s bad news for Microsoft (MSFT) and Nokia (NOK) because not only do these “other” smart phones tend to perform the most poorly in customer satisfaction, most of their owners would like to abandon them for Apple’s (AAPL) iPhone, Research in Motion’s (RIMM) BlackBerry or the Palm (PALM) Pre.

“The ‘generic’ smartphone is unloved, unappreciated, and unlikely to encourage any devotion among its users,” CFI concludes. “Its main role appears to be as a stepping stone to a ‘branded’ smartphone….Our data indicates there is little future for the ‘generic’ smartphone. Or, to be exact, the first generation of ‘generic’ smartphones. The iPhone has clearly raised the bar, but given the performance of the initial versions of the Pre and Android, the gap is narrowing. It’s clear from our data that the Android and Pre are worthy competitors to the iPhone, and more recent versions of the BlackBerry pose a bigger threat.”

PREVIOUSLY:

• Windows Mobile 6.5 “an Amazing Engineering Feat,” All Right…
• Perhaps if They Think of Their Win Mobile Devices as Broken iPhones…
• Ballmer on iPhone: Mr. Mojo Risin’

Microsoft and Verizon are reportedly discussing a touchscreen multimedia cellphone that could launch on the carrier’s network in 2010. The project, code-named “Pink,” will apparently involve some ungodly combination of Windows Mobile and Zune software. That code name is particularly interesting in light of recent reports that Microsoft (MSFT) has requested proposals for a new ad campaign for a mysterious mobile application by the same name.

Beyond that, details are slim. Representatives for Verizon (VZ)–which already has six Windows Mobile touchscreen devices in its lineup–refused to comment on the report. And Microsoft is apparently holding to the party line, insisting that its mobile strategy is to provide a software solution, not devices. Consider these remarks from Microsoft CEO Steve Ballmer at a recent McGraw-Hill (MHP) media conference:

With Windows Mobile, we want to permit a range of hardware innovation, and yet, still have a pretty good experience end-to-end, with good applications, and we want the ability for software developers to target both a very high-end and a lower range or mid-range phone.

And the ability to scale up and down, to work with multiple hardware vendors, to get a range of competition and innovation and price competition amongst the hardware guys is a big asset. It is certainly what our strategy is. It’s very different than Apple’s, and it’s very different than BlackBerry’s. But, unless you assume Apple and BlackBerry are going to sell the lion’s share of most phones … which I don’t, because I think they’re going to get a lot of competition from the Samsungs, LGs, Sony Ericssons, Taiwanese. I mean, there are a lot of guys who are going to be in that phone business.

I think that the play for us is to permit broad innovation at many price points, with a very good and very feature-rich, in terms of applications, experience. If people want keyboard input, that’s great. If they want touch, that’s great. If they, you know, want voice, we need to give them a range of modalities for interaction. And that’s the direction we’re headed with Windows Mobile 6.5 and into the future.

Ah yes, Windows Mobile 6.5. When are we going to see that again?

If inking a video-on-demand deal with a declining DVR pioneer is one of them… well, that’s not much of a plan, is it? But when your financial statements look like Blockbuster’s, I suppose you cling to life however you can (Blockbuster shares have fallen about 80 percent over the last 12 months). And so, beginning in the second half of 2009, the company will make its Blockbuster On Demand service available to TiVo subscribers. The agreement also calls for Blockbuster’s brick-and-mortar stores to sell TiVo DVRs. “We are excited to be teaming with TiVo, the company that created the DVR, to make Blockbuster’s entertainment content readily available to their millions of subscribers,” said Blockbuster CEO Jim Keyes. “Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our On Demand service but also from our stores and through our by-mail service as well.”

For Blockbuster (BBI), the deal is a means of capitalizing on the rising popularity of on-demand video. But to really do that effectively, the company needs alliances with more electronics manufacturers than just TiVo (TIVO). After all, the DVR pioneer isn’t in the greatest of health these days. And Netflix (NLFX) already delivers online video to TiVo and PCs, Macs, Xbox 360s, and selected LG and Samsung Blu-ray players as well. Clearly, Blockbuster is as late to on-demand as it was to DVD-by-mail.

It’s also apparently raised Palm’s profile as an acquisition target. Says Abramsky, “Given Pre’s and webOS’s competitive advantages and the rising importance of the Smartphone market, we foresee Palm’s rising attractiveness as an acquisition candidate.” The companies most likely to consider it as such: RIM (RIMM), Microsoft (MSFT), Nokia (NOK), Samsung, LG, Sony Ericsson, Hewlett-Packard (HPQ) and Dell (DELL).

Quite an endorsement–especially for a company that hasn’t yet launched the product capable of working the restorative magic Abramsky describes.

Palm shares are up well over two percent this morning at $8.07.

“We believe demand has deteriorated across most of the company’s core end-markets, with a particularly sharp slowdown in handsets, evidenced by a number of key supplier and competitor pre-announcements,” Sheerin wrote in a note to clients. “[The economic downturn] will make a recovery in the core handset business even more challenging and could accelerate cash burn.”

More ugly news for Motorola (MOT), which last week had its credit rating slashed to Junk by Standard & Poor’s.

Apple beat RIM. In their most recent quarter, Research in Motion, or RIM, reported selling 6.1 million BlackBerry devices. Compared to our most recent quarter sales of 6.9 million iPhones, Apple outsold RIM last quarter and this is a milestone for us. RIM is a good company that makes good products and so it is surprising that after only 15 months in the market, we could outsell them in any quarter. But even more remarkable is this–measured by revenues, Apple has become the world’s third largest mobile phone supplier. I know this sounds crazy, but it’s true–as measured in revenues, not units, Apple has become the third largest mobile phone supplier.”

– Apple CEO Steve Jobs, Oct. 21, 2008

You can stop gloating now, Steve.

Though Apple shipped more iPhones this summer than RIM shipped Blackberries, its share of the U.S. market still is still dwarfed by its Canadian rival. According to Strategy Analytics, Apple (AAPL) accounted for just 5.7 percent of the mobile phone market in the states in the third quarter, while Research in Motion claimed nearly twice as much–10.2 percent. That places it sixth in the research outfit’s ranking, two spots below RIM (RIM). Quite an achievement for a company with a single handset in a market ruled by the likes of Samsung, which has just overtaken Motorola as the leading mobile phone supplier in the states. Samsung claimed 22.4 percent of U.S. sales in Q3, up from 17.9 percent a year earlier. Meanwhile, Motorola’s (MOT) share dropped to 21.1 percent from 32.7 percent year-over-year.

Said analyst Bonny Joy, “Samsung’s growing retail presence and an attractive high-tier handset portfolio for all of the big four operators have proved crucial in grabbing the prestigious title of the No. 1 vendor in the world’s single largest handset market.”

More specifically, they’re buying fewer Motorola (MOT) phones. The company saw its share of the handset market fall to 21 percent from 32 percent a year ago. And that 11 percent loss was the competition’s gain. “Quarterly unit-sales of handsets fell to their lowest level since NPD begin tracking the category in 2005,” Ross Rubin, director of industry analysis for NPD, said in a statement. “Even so, most major manufacturers picked up market share that was lost by Motorola.” And that’s left the market in a bit of a three-way tie. Samsung and LG each have 20 percent share to Motorola’s 21 percent. Bringing up the rear: Nokia (NOK) and RIM (RIM) with 9 percent and 7 percent respectively.

A few other data points worth noting: Consumers who actually bought handsets in the quarter paid an average of $84 for them. Of those handsets, 81 percent were Bluetooth-enabled, compared with 69 percent last year. And 65 percent were music-enabled, compared with only 45 percent last year. Finally, sales of handsets with a QWERTY keyboard rose to 28 percent from 12 percent. So while Americans may be purchasing few cellphones, the ones they are buying are more feature-rich and more expensive.

Google never said much about the acquisition or its plans for Rubin, but he’s been on the company’s payroll ever since, presumably holed up somewhere on its campus in Mountain View, Calif., working on something–perhaps with the “graphics-software fanatics” from Skia, another mysterious mobile start-up Google acquired in 2005. Together they’d make quite a team–Rubin with his passion for location-aware mobile devices and Skia’s engineers with theirs for the robust, but portable, graphics engines that could be used in them. Theoretically, of course.

Why the history lesson? Well, industry sources tell The Wall Street Journal that Google might publicly detail its long-rumored mobile-phone project as early as Monday. “U.S. carriers likely to be part of the announcement are T-Mobile and Sprint, according to our sources, but there could be others by the time Google says its piece,” the Journal reports. “While Sprint appears to be agreeing to work with Google to put the Web giant’s new Linux-based open operating system into phones, T-Mobile will probably go even further: the company has worked with Google for months on plans to build Google-powered phones with a variety of Google software and applications. As far as handset partners for Google, Taiwan’s HTC is a likely bet, our sources say. Samsung, LG and Sony Ericsson are also possible, but we’ll wait and see the full roster. Equally interesting will be who isn’t on the list.”

Indeed. Because whoever’s not on that list could be losing out on a chance to become a true player in the mobile-search advertising business, which research outfit the Kelsey Group recently claimed will grow to $1.4 billion in 2012 from $33.2 million this year–in the United States alone.

Expected at market before Thanksgiving, the Voyager, with its touchscreen (which folds out to reveal a full QWERTY keypad), Web browser and multimedia capabilities is clearly crafted in the iPhone’s image and aimed at prospective iPhone customers.

But is it slick enough to kill Apple’s iconic device? Observers aren’t so sure. “If you have your heart set on an iPhone, I don’t think that the Voyager–or LG’s brand–is strong enough to overcome that,” said Current Analysis analyst Avi Greengart.

No iPhone killer here, it would seem. “… This is not, nor is anything else without an Apple logo, anyway, an iPhone killer,” said Farpoint Group analyst Craig Mathias. “Apple is unique in high tech, in that they are not just a manufacturer, marketer and brand. They are, rather, a destination, and many people would simply never consider buying a product competitive with Apple’s rendition of same. We’ve seen this with the Mac, and the iPod, and we’ll see it with the iPhone as well.”