I see the Droid as a competent product suffering from a disastrous marketing and advertising effort on the part of Verizon. More important than competing with the iPhone, Verizon needs to move existing customers from conventional cell plans to revenue rich voice and data plans. That's been lost in Verizon's marketing attack. Comparing the Droid to the iPhone is a loser. Positioning the product for existing customers as a step up from their current experience would have been a much more effective marketing plan.
The Droid is not an iPhone competitor (at least not yet). Both AT&T and Verizon are suffering from an accelerated loss in revenue from traditional landline customers as consumers move to handheld wireless solutions. Positioning the Droid as an attractive option for Verizon's tens of millions of wired and wireless customers would be far more effective than for the company to be seen smarting over AT&T's iPhone success.
iPhone unit sales growth continues unbated. The Droid needs to be positioned not so much as an iPhone competitor, but as an attractive solution based on its own merits for consumers interested in migrating from a conventional cell phone handset to a smartphone solution. Verizon has a rich field to mine with its existing customers and far more to gain by selling the benefits of the Droid to existing customers independent of the iPhone's success.