Apple's iPhone Outsells All Android Phones Combined at Verizon
January 24, 2012 4:18 PM
comment(s) - last by
Verizon takes a loss, but grows customer base, solidifying its #1 spot
Maybe Sprint Nextel Corp.'s (
bold iPhone gamble
such a bad idea
after all. At a time when many predicted Apple, Inc. (
) to be fading in the smartphone race after
by Samsung Electronics Comp., Ltd.'s (
) slick Android handsets, Apple surged back with the
launch of the iPhone 4S
its iconic voice-controlled assistant, Siri
. Analyst numbers place Apple in a
near dead heat with Android
in December U.S. smartphone sales.
And the situation is looking even better for Apple based on the just-announced
of Verizon Wireless, the joint venture between Verizon Communications Inc. (
) and Vodafone Group Plc. (
For Verizon Wireless it was a lukewarm quarter as a pension charge and another one-time expense brought a net loss of $2.02B USD ($0.71 USD/share), versus the $1.48B USD profit ($0.52 USD/share) it would have recorded without these charges. The company did solidify its American lead, adding 1.2 million new contract subscribers (and 1.46m total new subscribers) bringing its total (contract and non-contract) customers to 108.7m and its contract customer base to 87.4m.
Smartphone sales rose from 39 percent in Q3 2011 to 44 percent in Q4 2011. And the iPhone was king at Verizon. Of the 7.7m smartphones sold by the carrier in Q4 2011, 4.3m (~55%) were iPhones. Again, take that figure in -- the iPhone outsold all Android phones
on America's largest carrier.
The iPhone remains a top draw at Verizon. [Image Source: Reuters]
Of course Verizon pays more for iPhones that the initial carrier AT&T, Inc. (
) did. And Sprint is reportedly paying even more -- so maybe it isn't such a good deal, after all.
It's certainly a good deal for Apple, though, who reportedly pulled in almost $600 USD per Verizon iPhone sold, on models that retail for $200 USD with contract. Verizon is doing its best to recoup this capital expenditure, with a slew of overage fees. Reportedly the average iPhone bill on Verizon was around $100 USD with all the taxes and fees added [
]. Verizon likely pockets $80 of this, meaning that it will haul in $1,920 over the duration of a contract. But it has to deal with the significant costs of network upgrades, power use, land use, employee pay, and more.
Some analysts are convinced that a net profit on an iPhone may be a fatalistic quixotic fantasy. Sanford Bernstein analyst Craig Moffett
Verizon is following in the line of AT&T in deluding itself that it will someday see a profit, but consistently failing to do so. He writes, "The earnings pop will always be a year away."
Still, if America's third and fourth largest carriers -- Sprint and Deutsche Telekom AG's (
) T-Mobile USA -- collapse under
their respective debt
, Verizon and AT&T could soon be able to significantly unilaterally increase contract rates, solving both companies' iPhone profitability dilemma.
The collapse of T-Mobile and Sprint -- a possible scenario -- may hold the key to AT&T and Verizon finally profiting off of their expensive iPhone commitments. [Source: T-Mobile]
Apple is also extremely well positioned under such a scenario, given that it's the top selling model at Verizon and likely near the top at AT&T, as well. The first major test for Apple, though, will be how it responds to the inevitable need to reinvent iOS. On the one hand it can't sit still as Google Inc. (
) unveils its slick latest Android build,
Android 4.0 "Ice Cream Sandwich"
. On the other hand, Apple must tread the fine line of avoiding alienating its largely non-technophile customer base with too gaudy an interface.
Android 4.0 "Ice Cream Sandwich" [Image Source: Google]
For now, though, Apple and its fans can simply savor the thrill of being back near the top of the U.S. smartphone market -- even if challenges await.
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RE: So losing money is a good thing? ..... They must be doing shrooms
1/25/2012 9:08:57 PM
I've always been amazed by people's reaction to Apple.
But it is what it is. I honestly couldn't recommended a BB or Android phone to anyone during Q4. The only Verizon Android phone truly worth a contract was/is the Galaxy Nexus...and they released it at the dead end of the quarter. All the other Android LTE phones are carrier bloated and tainted with modified UI's.
If it's Verizon's intent to only release a pure Google phone every 2 years like their current trend dictates....you can expect Android to lose market to Apple on the Verizon network.
RE: So losing money is a good thing? ..... They must be doing shrooms
1/26/2012 7:29:06 AM
I think you are exactly right.
The main reason for Apples success is that the iPhone 4S moved up the hardware standard to a new level, and no Android handset has matched it yet, it's the failure of all the other manufacturers just as much as it is the success of Apple.
The SGX 540 in the Nexus Prime is 2 years old, and 3x slower than the SGX 543 in the iPhone 4S, so even the Nexus Prime is a slower phone with worse battery life (and of course the issues all Android phones have). It also only has a 5 megapixel camera compared to the higher quality 8 megapixel camera in the iPhone 4S. There simply is no better alternative right now.
Lets see what 2012 brings :-)
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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