Verizon Wireless once again is pitting its best against AT&T Inc. (T) and the iPhone in a fourth-quarter rumble for the most potentially lucrative customers.

Since Apple's touch-screen device entered the field with rival AT&T more than two years ago, Verizon Wireless has continually attempted to throw its best counterpunch during the holiday season, with mixed results. This year, Verizon Wireless is pinning its hopes on Google Inc. (GOOG) and Motorola Inc.'s (MOT) Droid, which is the centerpiece of the carrier's most aggressive campaign against the iPhone.

This time around, the stakes are higher. Competition among all of the different carriers has intensified, and fewer consumers are up for grabs. A quality smart phone can move the needle on a company's financial results, as illustrated by the continued success of AT&T, which is the exclusive U.S. carrier partner for the iPhone.

AT&T and Apple boasted record activations of the device in the third quarter, which were boosted by the release of the upgraded iPhone 3GS, as well as the $100 price cut to the original iPhone 3G. Despite the iPhone, the number of new contract customers at AT&T still fell by 18% from a year ago.

For the same period, Verizon Wireless--jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD)--saw a 50% decline in the number of new contract customers added from a year ago. The decline was attributed to a lack of new handsets from the carrier.

For the fourth quarter, Verizon Chief Financial Officer John Killian told Dow Jones Newswires that he was bullish.

"We have probably our strongest quarterly device launch ever," Killian said.

Alongside the Droid is a new version of the touch-screen BlackBerry Storm, which was last year's flagship device, as well as another phone using Google's Android mobile software.

But the Droid is clearly positioned as the marquee product for Verizon Wireless during these holidays. It's already been teased as the phone that can do things the iPhone can't, and Killian called it a groundbreaking device during a conference call with analysts.

Verizon Wireless and Motorola plan Wednesday to unveil details about the device.

Verizon Wireless' strategy over the past two years has seen mixed results. The first device the carrier threw against the iPhone, in 2007, was the Voyager from LG Electronics Inc. (066570.SE), and then came the Storm from Research In Motion Ltd. (RIMM) in 2008. Both devices sold well--mostly due to Verizon Wireless's marketing muscle--but neither left a lasting impression. The carrier is hoping the third time's the charm with the Droid.

"We believe that Verizon's upcoming Motorola Droid is the device that Verizon was waiting for as it seems to have all the right ingredients to become a real threat to the iPhone 3GS," said Julien Blin, analyst at JBB Research.

Verizon Wireless has held up relatively well, relying on the reputation of its network to make up for its lack of high-profile devices, but the steep 38% decline in new customers in the third quarter suggests it's not invulnerable. Since the iPhone launched, Verizon Wireless has seen the number of new customers added fall with each successive fourth quarter; meanwhile, AT&T saw its growth accelerate in that same period.

For those hoping that the iPhone will cross over to Verizon Wireless, Verizon Chairman and Chief Executive Ivan Seidenberg said Monday that the decision ultimately rests with Apple.

Verizon Communications shares recently slipped 0.9% to $28.58, and Vodafone's American depositary shares were down 1 cent at $22.28. AT&T dropped 1.7% to $25.28, and Apple slipped 0.8% to $202.32.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com