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Summary:

Despite Verizon’s evangelizing push to convert its subscribers to 4G LTE, the 3G iPhone remains king at the country’s largest operator. At its second-quarter earnings call on Thursday, Verizon reported selling 2.7 million iPhones, compared to 2.5 million 4G Android phone sales.

Verizon iPhone 4

Verizon iPhone 4Despite Verizon’s evangelizing push to convert its subscribers to 4G LTE, the 3G iPhone remains king at the country’s largest operator. At its second-quarter earnings call on Thursday, Verizon reported selling 2.7 million iPhones, compared to 2.5 million 4G Android phone sales.

Those iPhone sales represent a 17 percent increase over the 2.3 million Verizon sold in last year’s second quarter, its first full quarter as an iPhone distributor. In the first quarter, Verizon sold 3.2 million of the devices. But at the beginning of the year the iPhone 4S was still relatively new, while in the spring and early summer anticipation started building for the new iPhone being released this fall.

Verizon’s results almost certainly prove wrong William Blair analyst Anil Doradla’s report that Motorola’s Droid Razr was outselling the iPhone 4S at Verizon, making it the carrier’s top device. Unless a disproportionate number of Verizon customers eschewed the iPhone 4S in favor of the iPhone 4 or the vast majority of Android smartphone sales were for the Razr Maxx, the math just doesn’t work.

Though the iPhone remained dominant, Verizon still made a lot of progress toward migrating its customer base to 4G. Verizon activated 3.2 million LTE devices in total, including tablets, modems and hotspots; and 42 percent of all smartphones sold contained an LTE radio. Verizon CFO Fran Shammo said 18 percent of Verizon’s smartphone base now is on the 4G network. And given that Verizon’s smartphone penetration is now 50 percent, that means it has managed to convert nearly 10 percent of its subscriber base to 4G in a little more than a year.

On Wednesday, Verizon added another 33 smaller markets to its 4G footprint and expanded its networks in 32 markets, bringing its total coverage to 337 cities and roughly 75 percent of the U.S. population. Verizon plans to close the year with 400 markets covered.

As Shammo pointed out on the call, LTE is a far more efficient mobile broadband technology than CDMA, offering not just greater speeds but much more overall capacity. But if LTE is really Verizon’s future it will need to accelerate its 4G conversion rate, which will be awfully difficult until Apple ships an LTE version of the iPhone. It doesn’t help either that Verizon is making exceptions for old friends like RIM, which just introduced a new 3G-only BlackBerry on Big Red’s network.

  1. This article paints a very different image than this BGR one, where there were 2.7 million iPhones sold, 15% less than expected, and 2.9 million Android phones sold. Those 2.5 million you mentioned were just “4G phones” ?

    http://www.bgr.com/2012/07/19/verizon-q2-2012-earnings-profit-sales-smartphones/

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    1. Kevin Fitchard Thursday, July 19, 2012

      Hi Lucian,

      BGR’s 15% number is sequential, comparing Q2 to Q1. I compared Q2 to last year’s Q2, which, in my mind at least, is the more telling number due to the huge seasonal variation in smartphone sales and the timing of Apple’s iPhone release schedule. Granted Apple shifted the launch of the iPhone 4S by a quarter last year so that throws the numbers off a bit.

      As for the Android numbers, I was citing Verizon’s 4G smartphone figure. It sold an additional 400,000 3G-only Android smartphones (presumably older models). I focused on the 4G number because that’s where Verizon has been focusing all of its marketing efforts. Verizon wants to shift its customer base to 4G as quickly as possible, but it can’t do that if 3G devices like the iPhone are outselling its 4G phones each quarter.

      Hope that clears things up.

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  2. He’s an Apple fanboy (but anyone has bias so it is not unususal) QoQ sales of iPhone is abating and the number is somewhat less than anticipated. 4S is down faster because of the anticipation for 5.

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  3. triangledroid Thursday, July 19, 2012

    Your title is not accurate. If there is a sequential decline, it’s still a decline and a sign of a slow down.

    You’re also making assumptions that about sales of the iphone 4 vs. 4S. Why not try to get some facts instead of making an assumption.

    I shouldn’t have bothered to click on this article. My bad…

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    1. Kevin Fitchard Friday, July 20, 2012

      No Triangle, a sequential decline is only a sequential decline. If we only based trends on sequential declines then every year iPhone sales would “plummet” between 4th quarter and the 1st.

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  4. Ladi Williams Friday, July 20, 2012

    The truth always rankles with some, is always unpalatable…

    That’s why expressions like “the bitter truth” and “the hard facts” exist.

    Why not just accept the hard fact that no single handset sells anywhere near the iPhone, no matter how many faceless Symbian, WinPhone or Android statistics analysts try to trot out, and hide behind?

    After all, it is not contested that Android as a platform is market share leader. Why this Ghenghiz Khan mentality of “it is not enough that I succeed; others must fail”?

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  5. Wait until the iPhone 5 enters the market. With the rumored specs it has, the market will go boosting right high. I have heard the sleeker, shiny iPhone is capable of doing a lot more than just being the previous iPhone 4G. With A5 CPU, it will be the fastest yet the slimmest phone in the market.

    Regards
    .D-

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