What makes you think Verizon is afraid of the iPhone? Even given all the hype, I seriously doubt Verizon would change its decision. Apple wanted too many concessions, and Verizon is not the kind of company that likes to give up control (or profits).

Yes, some people will defect to at&t for the iPhone. I suspect sales of other smartphones will actually INCREASE though, as awareness about the capabilities of PDA phones increases.

I know Verizon is in no danger of losing me as a customer. There are too many features I'm unwilling to give up to make the switch.