Joseph Menn Apple-Verizon is all about the audience

Perhaps the only surprising thing about Apple’s long-expected decision to end its US exclusivity with AT&T and bring the iPhone to Verizon Wireless is that it didn’t wait for the No. 1 network’s upgrade to much-faster 4G, which is still in process. The fact that it couldn’t wait shows how badly Apple wants to boost growth both for the gadgets themselves and more fundamentally for its slice of the mobile audience, where Google is pulling ahead.

True, Verizon’s network draws fewer congestion complaints than AT&T’s–and that might well continue even after the deluge of roughly 10m or so new iPhones Verizon it is expected to sell this year. But to the extent the iPhone’s data-gobbling users want to watch non-Wifi streaming video and make FaceTime calls with one another, the dramatic advance would only come with an LTE phone.

Not only did the companies not announce any such phone on Tuesday, they didn’t even say they were working on one. You could take Apple executives’ word for it that there are thorny design issues.

But it makes more sense to look at the rapid market share gains by devices running Google’s Android operating system, which have just collectively passed Apple’s total US user base, according to comScore.

For Apple, the real economic power of the iPhone is not the allure of the device itself. It is the self-reinforcing system that its once-commanding market lead made possible: a large base that attracted developers who wrote the small programs known as apps just for that audience, so that the most apps and the best ones were available on the iPhone, so that more people bought the phones, and so on.

By dint of near-universal manufacturer and carrier backing, Android has nearly leveled the playing field. Apple has already lost the dominance it enjoyed for years, and it must act quickly to shore up the audience it still has to ward off the threat of the market tipping the other way.

Even if that means adding another 3G network with unreliable calling and slow surfing, which AT&T claims and certainly hopes will be the case with Verizon, Apple has little choice in the matter.