Is the Droid Good News for iPhone Owners?

In a nod to my colleague Tom Wailgum, who wrote What Star Wars Teaches Us About Career Management, I’m waving a hand in front of mobile users and saying, “This is the Droid you’re looking for”—and iPhone owners should be wishing for the same thing.

I’m talking, of course, about the Motorola Droid introduced by Verizon on Wednesday. The very cool smartphone hits Verizon Wireless stores’ shelves on Nov. 6 and will cost $200 after a $100 rebate, along with a nationwide calling plan and a $30 data plan.

Let’s be clear: The Droid is the first big contender to cross swords with the almighty iPhone. And it’s got powerful allies like Google and Verizon, as well as Motorola on the comeback trail. The Droid boasts a beautiful high-res screen, multi-tasking apps, free turn-by-turn GPS navigational system, and both a touch keypad and hardware keypad.

In comparison, the iPhone’s screen isn’t as sharp. The iPhone also doesn’t support multi-tasking apps (at least, not widely). While Tom-Tom offers an iPhone app for turn-by-turn GPS, the app costs a whopping $100. And, of course, the iPhone has only a touch keypad.

The Droid, though, may be a boon for iPhone owners thanks to the benefits that spring from increased competition. Mobile app developers, for instance, will no longer be able to corner the smartphone market with a single iPhone app. They will need to develop on multiple platforms and compete with a whole new crop of smart developers.

Increased competition will also put the screws to Apple. In the past, Apple could dictate to the market what works and what doesn’t work, what is possible and impossible. Now the market gets to dictate. “If Droid has background processing and still gives good battery life, this could put some pressure on Apple to rethink background processing,” says Gartner analyst Van Baker.

But competition only goes so far—that is, Apple doesn’t respond to competitive pressures very often. It’s unlikely, for instance, that Apple will abandon its imperialistic ways concerning the App Store and Adobe Flash. (The iPhone does not support Flash, whereas Droid does.)

It’s also unlikely that iPhone owners will flock to the Droid and Verizon’s 3G network, thus taking some pressure off of AT&T’s network. “Maybe a few iPhone 1.0 users whose contracts have expired” will move to the Droid, Baker says, “but not too many.”

It’s more likely that Droid owners will tap the Internet as much as iPhone users do, which is to say a lot. And Verizon could end up having network and customer service fallouts similar to those of AT&T.

Got a different take? Send me an email at tkaneshige@cio.com. Or follow me on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline.