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Summary:

Any dip in North American iPhone sales is bound to have an impact on U.S. mobile carriers, in particularly AT&T which has leaned heavily on the iPhone for years.

AT&T
photo: Flickr / NontrivialMatt

Apple set a record of 51 million iPhone sales in Q4, largely due to its success in the emerging markets with the introduction of the cheaper iPhone 5c. But what worked in the rest of the world didn’t work back in the U.S. and Canada.

In Apple’s earning call on Monday, CEO Tim Cook said iPhone shipments and revenues dipped slightly in North America as Apple had trouble keeping up with demand. While the 5c may have proved popular in emerging markets, it wasn’t much of hit among U.S. consumers. To them, the $100 difference in price didn’t seem worth it to trade down from the 5s to the 5c.

iPhone 5c

The bulk of North American sales are in the U.S., so any hit taken on iPhone sales is bound to affect the U.S. carriers. Verizon Wireless so far is the only one of the four nationwide operators to report Q4 earnings, and suspiciously it failed to break out iPhone activations for the first time since carrying the device. Still, Verizon had 1.7 million net additions for the quarter, so its overall results weren’t impacted much by Apple.

AT&T, however, is much more exposed to the iPhone than its arch competitor. Not only was it Apple’s first carrier partner for the iPhone, Ma Bell has routinely done a much bigger business in iPhone sales and activations than any other carrier since the smartphone’s introduction across the market. In Q4 of 2012, AT&T activated 8.6 million iPhones compared to Verizon’s 6.2 million.

AT&T was already under pressure in the last quarter, taking the major brunt of T-Mobile’s Un-carrier attacks on the U.S. mobile industry (a strategy that brand researcher YouGov found is working). A hit to its bread-and-butter iPhone business, would add insult to injury. In any case, we’ll find out this afternoon when AT&T posts its Q4 results.

  1. Have you even wondered about total smartphone sales in the US or at ATT? That’s what matters. Declining iphone sales at ATT could be good news for them since they’ve been trying for a while now to lower their dependence on the iphone but i guess forcing the apple angle is more appealing to some.

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  2. Tim Cook clearly alluded to the dip in NA iPhone sales is primarily attributable to the carriers themselves (AT&T and Verizon) being more strict with upgrade cycles.

    For the longest time, the main line on the family plan could upgrade every 12 months, with the other phone lines on the plan upgrading somewhere between 18-24 months. I took advantage of this to upgrade my iPhone every year from the original iPhone to the iPhone 4S.

    But that’s changed now – all phone lines are stuck at upgrading every 20-24 months. When I went to buy the iPhone 5, I had to use the upgrade from another phone line on the plan. I’ll have to continue to do this as long as I want to upgrade to a new iPhone every year.

    By my estimate, the available upgrade pool for the quarter for AT&T and Verizon subs shrunk from about 20M to 12.5M, a decrease of 37.5% compared to two years ago with the much more liberal upgrade policies.

    I do agree AT&T is getting hit hard by T-Mobile. That should be their main worry, not how hot the iPhone is or isn’t.

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  3. I don’t understand why Apple market share decreasing is a bad thing.

    Every single us news source I read makes it seem like poor Apple that people aren’t buying into its walled garden, expensive product family line up.

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  5. iPhone release has a negative correlation with AT&T revenue so if anything its good for AT&T

    http://bit.ly/ATTisBest

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