How many iPhones could Verizon sell?

John Gruber wonders how many iPhones Verizon could sell the first weekend:

I think they could sell at least one million on Verizon over the opening weekend. Who knows how many loyal-to-Verizon customers are just biding their time, waiting for an iPhone, though? Could be more.

The interesting variable here is the subsidy. Since the introduction of the iPhone 3G, AT&T has subsidized the price of the device in exchange for a two-year contract. That's pretty standard in the cell phone business – the carrier gives you a deal on the phone in exchange for guaranteed business for a couple of years. Every so often, usually 18-24 months, the carrier will offer the customer a new phone at the subsidized price, contingent on extending that contract another 2 years.

Potential buyers of a Verizon iPhone fall into three groups: (1) people who would switch to Verizon and buy an iPhone as a new customer, (2) current Verizon customers who are eligible for a new, subsidized phone, and (3) current Verizon customers who are not eligible for a subsidized phone. My guess is that most iPhone buyers on Verizon, especially on opening weekend, would fall into group 3. If you're someone who would buy an iPhone the first weekend it's available on Verizon, chances are you haven't been walking around with a crusty RAZR in your pocket for the last 6 years.

If a large number of would-be Verizon iPhone buyers wouldn't normally be eligible for a subsidized upgrade, the opening weekend numbers suddenly hinge on whether Verizon is willing to offer the subsidized price to everyone. Although I'm sure there are some die-hard Verizon users out there who'd be willing to pay $599 for an unsubsidized iPhone, I doubt it would be enough to drive big launch numbers. If Verizon is willing to sell subsidized iPhones to any current customer, I think we can expect a huge day of sales. If not, the numbers might be considerably more modest.