Will Apple’s iPhone be the last handheld standing?

A prominent Wall Street analyst believes that Microsoft (WP7) and Google (Android) will compete fiercely for smartphone market share – leaving Apple’s iPhone the “last man standing.”

“In the short run, the [bloody] turf war could put the smartphone manufacturers in the driver’s seat,” Needham & Company analyst Charlie Wolf posited in an industry note obtained by Appleinsider.

“Ultimately, however, commoditization, accompanied by deteriorating prices and gross margins, appears inevitable for licensees of the Android and Windows Phone 7 operating systems. 

[Indeed], with its growing brand equity, the iPhone could end up as the last man standing in this race to the bottom.”

Although sales of Microsoft WP7 devices have ostensibly been rather lackluster, Wolf projects that Redmond will eventually splash out the cash to “buy the support” of leading smartphone manufacturers. 

“[As such], if WP7 is successful, it’s difficult not to conclude that the Android platform will be [negatively] impacted more than any other OS because of the similarity of the two licensing models.”

Wolf added that if – as expected – Apple’s iPhone launched on Verizon’s network in early 2011, Android would undoubtedly “suffer” the most.

“[Remember], Android [only] benefitted from the absence of the iPhone on Verizon, because the carrier spent heavily to promote the platform as an alternative to the iPhone.

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