Analyst: iPhone 4 Top Selling Smartphone at AT&T, Verizon

Apple’s iPhone 4 remains the top selling smartphone “by far” at both AT&T and Verizon, according to Canaccord Genuity analyst T. Michael Walkley. He added that this was the case, “despite the introduction of several new high-end Android smartphones.”

He also believes that the iPad 2 is selling well, and in a research note obtained by The Mac Observer, he told clients that he expects Apple to have strong sales of both the iPhone and iPad in the second half of 2011.

He said that at Verizon, the iPhone 4 was the #1 device in May and June, even though there were a grand total of six — count ‘em, six — new Android devices: HTC (Thunderbolt – LTE, Incredible 2), Motorola Mobility (Droid X2), Samsung (Droid Charge - LTE), Sony Ericsson (Play), and LG (Revolution – LTE).

Even Apple’s two year old iPhone 3GS is doing well. The analyst wrote, “Interestingly, our checks indicated continued strong demand for the iPhone 3GS at AT&T as this older generation product with a reduced price of $49 often outsold new Android products.”

He added, “We believe this highlights Apple’s significant competitive advantage and allows Apple to offer a tiered pricing strategy at key channels. In fact, store reps at AT&T consistently recommended the iPhone 3GS as the top entry-level smartphone.

The flip side of that reality, however, is that the cumulative effect of the many and more Android models there are on the market combine to give Android the larger overall market share, even while Apple dominates profits.

Still, Mr. Walkley believes that Apple will continue to have a strong position in market share in the smartphone category, and that it will definitely continue to dominate industry profits.

In the chart below, Mr. Walkley offered clients a look at industry market share going back to 2007, when Nokia dominated the smartphone market. The last year and a half in the chart represents projections.

Note that Microsoft shows a strong uptick, as Nokia ditches its own Symbian for Windows Mobile 7 and its successors, but that that is nowhere near the share lost by Nokia in even the year before that transition, let alone prior years.

Canaccord Genuity Chart

Source: Company reports, Gartner, Inc., and Canaccord Genuity estimates
(Click the chart for a larger version) 

Lastly, the analyst noted that there continue to be major issues with battery performance on Android LTE devices, which began hitting the market in recent weeks.

“While such issues are typical of most wireless technology transitions,” he wrote, “we believe this is positive for continued strong sales of the iPhone 4 and iPad 2.”

For an example he said that both the Samsung Charge and HTC Thunderbolt LTE have sold well, but that customers have had to buy extra batteries, and that return rates for the devices has been “much higher” than for comparable 3G devices.

Apple has reportedly been unwilling to embrace LTE with its iPhone line in part because of these battery issues for LTE devices. The industry has a ways to go in the way the devices interact with the network to bring battery performance to a point where Apple is satisfied.

Mr. Walkley maintained his “Buy” rating and a US$485 price target for AAPL.

Shares in Apple ended the day higher at $326.62, up $0.72 (+0.22%), on moderate volume of 11.8 million shares trading hands.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.