Verizon's 4.2M Q4 iPhone activations were more than half of its smartphones

Posted:
in iPhone edited January 2014
Verizon on Tuesday revealed its quarterly earnings for the fourth quarter of 2011, in which it sold 7.7 million smartphones, 4.2 million of which were iPhones.



Apple's strong performance in the holiday quarter was downplayed by Verizon, which preferred instead to focus on its high-speed 4G long-term evolution network. Verizon's official press release, "Investor Quarterly" publication and earnings results presentation slides made no mention of Apple or the iPhone.



The carrier had already revealed earlier this month that it sold 4.2 million iPhones in the December quarter. Verizon's chief financial officer, Fran Shammo, attempted to deflect concern from some analysts on Tuesday that the high subsidy cost of the iPhone dragged down the carrier's wireless profits, according to CNN Money.



Shammo said that high costs associated with subsidizing the iPhone are simply the price of doing business with Apple. And those costs gave Verizon 55 percent of its smartphone sales for the quarter, as most customers chose Apple's 3G iPhone versus the carrier's selection of 4G LTE phones.



Verizon officials said they are happy with the 2.3 million 4G LTE devices that were activated in the last quarter. The company touted that it has made "significant advancement" in deploying its 4G LTE network, and is well ahead of the competition in that respect.



"Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012," said Lowell McAdam, Verizon chairman, president and chief executive officer.



"Verizon Wireless produced particularly strong growth in the fourth quarter. While that diluted wireless margins in the short term, it is good news for revenue and margin growth over the long term, particularly given our leadership in the rapidly developing 4G LTE ecosystem."



Verizon posted 7.7 percent year-over-year quarterly revenue growth in the fourth quarter of 2011, which was a record for the company. Its wireless business had $18.3 billion in total revenues for the quarter, up 13 percent from the same holiday period in 2010.









While the carrier's press materials and news releases didn't mention Apple, its quarterly bulletin publication did lead off with an illustration of a 3G-connected iPad touting its record revenue growth in the fourth quarter.



Verizon is the largest wireless carrier in the U.S., and its chief rival is second-place AT&T, which announced in December that Apple's launch of the iPhone 4S has propelled total smartphone sales to 6 million in the first two months of the quarter. That number was just shy of its quarterly record of 6.1 million smartphone sales with a full month still left to go in the holiday quarter.



iPhone sales are greater at AT&T, where Apple's smartphone remained exclusive in the U.S. until February of last year when the iPhone 4 came to Verizon. And last fall, the iPhone also came to Sprint, the third-largest carrier in the U.S., as well as smaller regional carriers like C Spire Wireless.



Apple will report its total iPhone sales for the holiday quarter this afternoon, when it releases its own quarterly earnings after the markets close at 4 p.m. Eastern, 1 p.m. Pacific. AppleInsider will have full live coverage.
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Comments

  • tallest skiltallest skil Posts: 40,856member
    Quote:

    …most customers chose Apple's 3G iPhone versus the carrier's selection of 4G LTE phones.



    "Apple is doomed. They need to license Android before everyone just stops buying iPhones altogether. No one will be buying iPhones in two years."



    Time to play Guess That Quote!
  • lilgto64lilgto64 Posts: 1,147member
    I am having a hard time understanding how anyone can be so concerned about the "high subsidy cost" when at the same time the have achieved records for year over year growth and posted double digit increases in revenue etc.



    On the other hand I suppose that for many people if they cannot base their world view on a single metric then it is just to confusing for them to handle. Thinking back the MHz wars, and MegaPixels, and screen size etc.



    I say ANY future comments or projections etc that anyone makes based on ANY single data point should just be immediately stricken from the public record. Kinda the way the Olympics does not use the highest and lowest judges' scores.
  • thataveragejoethataveragejoe Posts: 830member
    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.
  • gatorguygatorguy Posts: 15,262member
    Quote:
    Originally Posted by thataveragejoe View Post


    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.



    It surprised me. I didn't anticipate there was that much pent-up demand for the next iPhone. Pretty darn impressive I think.
  • brianloftusbrianloftus Posts: 69member
    Quote:
    Originally Posted by thataveragejoe View Post


    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.



    On the other hand, we will see what percentage of sales is the iPhone when someone can walk into the store and actually get it. If you are a reseller, you push the non-iPhones when you have limited iPhone supply. A delayed sale is a lost sale to you.
  • fecklesstechguyfecklesstechguy Posts: 501member
    Quote:
    Originally Posted by Tallest Skil View Post


    "Apple is doomed. They need to license Android before everyone just stops buying iPhones altogether. No one will be buying iPhones in two years."



    Time to play Guess That Quote!



    Nice sl@pppy channel TS!



    Now notice that the percussive protagonist is curiously silent, eshewing ardent Android adulation in the face of actual Apple ascendancy.
  • stelligentstelligent Posts: 2,680member
    I read elsewhere that Verizon also reported adding 1.5M subscribers. This would mean at least 2.7M subscribers switched either from a feature-phone, an Android, BB or Windows Phone to iPhone. Impressive. I have a gut feeling that RIM was the big loser here.
  • lilgto64lilgto64 Posts: 1,147member
    Quote:
    Originally Posted by stelligent View Post


    I read elsewhere that Verizon also reported adding 1.5M subscribers. This would mean at least 2.7M subscribers switched either from a feature-phone, an Android, BB or Windows Phone to iPhone. Impressive. I have a gut feeling that RIM was the big loser here.



    It appears that those were not the Droids customer were looking for after all.
  • island hermitisland hermit Posts: 6,217member
    Quote:
    Originally Posted by thataveragejoe View Post


    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.



    I agree. I expected big numbers for the iPhone during the holiday quarter for all the reasons you list. It's the current quarter that interests me as well.
  • SpamSandwichSpamSandwich Posts: 25,341member
    Apple has them all right where they want them!



    Now when is Apple going to pull the wraps off their secret plans for global, ubiquitous Super Duper Wi-Fi?
  • starbirdstarbird Posts: 42member
    Quote:
    Originally Posted by thataveragejoe View Post


    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.



    Quote:
    Originally Posted by Gatorguy View Post


    It surprised me. I didn't anticipate there was that much pent-up demand for the next iPhone. Pretty darn impressive I think.



    I seem to remember the 8+ month old iPhone 4 set new daily records, and people were like "Not surprising, but will be interested in seeing when a new iPhone is launched" -- This is the litmus test for iPhones. By moving the launch of new models to Q4, Apple is essentially guaranteeing that the holiday sales cycle will be theirs.



    Nearly 55% of the smartphones Verizon sold were of 2 models (Yes, I know there are 6 skus total). How many iPhone Verizon commercials were there? Compare that to being inundated with 4G/LTE phone commercials, and "double your data" promotion on 4G devices, I'd say it is EXTREMELY impressive. New smartphone users were buying the iPhone more often than, and near 2 to 1 mind you, 4G/LTE Droids (as I don't think there were any BB or WP7 4G Verizon phones out there, though I could be wrong) -- WITH HALF THE DATA CAP for the same price.



    So double data (real or perceived benefit, in theory, could double costs to VZW, though highly unlikely) and more costs for marketing those phones, to only achieve a bit better than half the sales of the iPhone? How is a higher, one time subsidy, a bigger problem?



    Quote:
    Originally Posted by lilgto64 View Post


    It appears that those were not the Droids customer were looking for after all.



    Love it.
  • mrstepmrstep Posts: 446member
    Quote:
    Originally Posted by island hermit View Post


    I agree. I expected big numbers for the iPhone during the holiday quarter for all the reasons you list. It's the current quarter that interests me as well.



    While Android fanboys like to spout 'the 4s is just a 4', the fact is the 4s is faster, the camera is really great, Siri is fun and useful as long as you figure out what it's generally looking for for format/questions (and still way better than any other voice recognition), and it's all-around a great phone. Apparently I'm not the only one who thinks so.



    Yep, very interested to see the overall numbers too.
  • solipsismxsolipsismx Posts: 19,566member
    So despite Verizon's decent 4G network coverage in 2011... and all those 4G Android phones with the huge displays... and the iPhone "not being any different except for the gimmick Siri"... Apple was still able to sell more units than all other smartphone vendors combined.



    Of course, the iPhone only came out in October, but I name several phones that also only came in last few months on Verizon.
  • scotty321scotty321 Posts: 307member
    Quote:
    Originally Posted by mrstep View Post


    While Android fanboys like to spout 'the 4s is just a 4', the fact is the 4s is faster, the camera is really great, Siri is fun and useful as long as you figure out what it's generally looking for for format/questions (and still way better than any other voice recognition), and it's all-around a great phone. Apparently I'm not the only one who thinks so.



    Forget Siri, which I find completely unhelpful. What's MOST impressive about the iPhone 4S is something that is based on Siri: SYSTEMWIDE VOICE DICTATION (in every single app). Now THAT is truly awesome.
  • tallest skiltallest skil Posts: 40,856member
    Quote:
    Originally Posted by scotty321 View Post


    Forget Siri, which I find completely unhelpful. What's MOST impressive about the iPhone 4S is something that is based on Siri: SYSTEMWIDE VOICE DICTATION (in every single app). Now THAT is truly awesome.



    And when we actually get that in an iPhone, it will be even more awesome.
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by SolipsismX View Post


    So despite Verizon's decent 4G network coverage in 2011... and all those 4G Android phones with the huge displays... and the iPhone "not being any different except for the gimmick Siri"... Apple was still able to sell more units than all other smartphone vendors combined.



    Of course, the iPhone only came out in October, but I name several phones that also only came in last few months on Verizon.



    Many people just don't want to make the trade-off of battery life for LTE just yet, especially since coverage is good but not ubiquitous yet. In many cases this sort of worked in the iPhone's favor, as your best non LTE option, platform agnostic. Otherwise you're stuck with a rottenberry (which aren't even on the floor anymore) or Incredible 2. You do bring up a fair point on timing, the Rezound and Galaxy Nexus didn't launch till mid December. I'd love to see the breakouts as I'm sure the $99 i4 is far more appeasing than a 299 phone anyway. With LTE phones coming down to 199, and the Spectrum, D4, and Razor Maxx all launching now it'll be interesting to see how things settle down in Q1.



    EDIT: Verizon sold 15 million Android phones and 10.8 million iPhones over the course of 2011.
  • correctionscorrections Posts: 1,142member
    Quote:
    Originally Posted by Tallest Skil View Post


    And when we actually get that in an iPhone, it will be even more awesome.



    Voice dictation is already there, a new button on the keyboard similar to Android and WP7 phones. Apple "should" add the same feature across iOS 5 devices, leaving Siri's other functionality the differentiator. But soon enough, iPhone 4S will be the top model.



    Hard to believe, but Apple sold 72 million iPhone's in fiscal 2011 (ending in Sept), nearly as many as all the iPhones sold 2007-2010 (73.7 million). That's not counting the holiday "Q1 2012" quarter.
  • nairbnairb Posts: 253member
    Quote:
    Originally Posted by thataveragejoe View Post


    Many people just don't want to make the trade-off of battery life for LTE just yet, especially since coverage is good but not ubiquitous yet. In many cases this sort of worked in the iPhone's favor, as your best non LTE option, platform agnostic. Otherwise you're stuck with a rottenberry (which aren't even on the floor anymore) or Incredible 2. You do bring up a fair point on timing, the Rezound and Galaxy Nexus didn't launch till mid December. I'd love to see the breakouts as I'm sure the $99 i4 is far more appeasing than a 299 phone anyway. With LTE phones coming down to 199, and the Spectrum, D4, and Razor Maxx all launching now it'll be interesting to see how things settle down in Q1.



    EDIT: Verizon sold 15 million Android phones and 10.8 million iPhones over the course of 2011.



    This quarter will be interesting indeed.



    iPhone sales were disapointing when iPhone launched on Verizon. They still sold a lot but less than many were expecting. SOem thought this was a sign of Android strength but is appears verizon wantobe iPhone users were holding out for a new phone. Logical really when you consider the 4 was already close to 6 months old.



    The next quarter could go either way.



    What will also be interesting to see is how HTC do. Burst on the scene with a blast but faded last quarter.
  • tallest skiltallest skil Posts: 40,856member
    Quote:
    Originally Posted by Corrections View Post


    Voice dictation is already there?



    Ah, sorry, you're right. I interpreted that backwards; we don't yet have TTS for e-mail and a few others.



    ?



    Your username has certainly been shown to be apt. Good for you.
  • mhiklmhikl Posts: 471member
    Quote:
    Originally Posted by thataveragejoe View Post


    These aren't really surprising numbers given the launch of the 4S, pent up Verizon holdouts from the 4, and holiday period. I'm more curious to see how the current quarter trend fairs.



    Yup, as the title says, present trends are always the ones we want to see the most.
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