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iPhone Represents 55% of Verizon's 4Q 2011 Smartphone Sales

Discussion in 'Wireless News' started by viewfly, Jan 24, 2012.

  1. viewfly

    viewfly Mobile RF Advisor
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    #1 viewfly, Jan 24, 2012
  2. RadioRaiders

    RadioRaiders RF Black-Belt
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    VF: the link you posted seems to be broken.

    The iPhone also drove VZW into the red, due to higher costs Apple seems to charge compared to other phones:

    Verizon iPhone Burden, Pension Costs, Lead to $2 Billion Loss - Mobile and Wireless - News & Reviews - eWeek.com

    I guess VZW has to offer the iPhone to attract customers who want it, but I wonder if they would have stuck to offering only Androids and BlackBerry, if they would be better off financially? (ie: more $ per phone in VZW's pocket).

    It's kind of a guessing game with no real answer I suppose. Since with the iPhone customers, VZW loses $ up front, but most likely makes it back down the road in the longer term. I guess the bigger question is if VZW customers would have been happy with only Android/BlackBerry? For a while they seemed to be ok with that, until VZW decided to add the iPhone to their offering. I'm wondering if that was a bad call by VZW? DId the iPhone really make new customers switch to VZW? Or are the bulk of these siPhone sales existing VZW customers who would have taken a different phone and stayed on VZW anyway if they didn't have the iPhone available? :confused:
     
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    #2 RadioRaiders, Jan 25, 2012
  3. dmapr

    dmapr Silver Senior Member
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    I know quite a few AT&T iPhone-wielding owners who're just waiting out their contracts so they can get a VZW iPhone & have reception. You know, have your cake and eat it, too? :) But I have no idea of how representative that is of the global numbers.
     
    #3 dmapr, Jan 25, 2012
  4. viewfly

    viewfly Mobile RF Advisor
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    Most of Verizon loss was from Pension obligations.

    Odd, it links correctly from TapaTalk on my iPhone. Anyhow, here is the Verizon link again.
    Verizon | Verizon Reports Record Revenue Growth in 4Q, Fueled by Strong Demand for Wireless, FiOS and Strategic Services

    Not as reported by Verizon (above) and this NYTimes report (Pension obligations cause Q4 loss for Verizon)

    I'm not an accountant, but the story is this:

    Verizon Communications on Tuesday reported rising iPhone sales and revenue growth in its wireless business, but it booked a quarterly loss, primarily because of previously announced pension charges.

    Before Pension charges, the income was 52 cents per share, but the final tally was a loss of 71 cents per share.

    Their quarterly wireless revenue was up 13% year over year. The profit margins were down due to smartphone subsidies, but still profitable within the contract year.

    Verizon accountants are not stupid. I haven't found a collaborating link that the iPhone caused the red for Verizon. I'm sure the LTE build out are quite a chuck of expenses.


    Hey, I think Steve Jobs would have offered you a job at Apple! :D No Flash, no removable battery...you'll will like the phone anyways.

    A business should offer clients what they are looking for, otherwise they will walk away. And this explains the iPhone success. It may not have everything to all, but most like what they have...otherwise they would walk away.

    If I kept going back to my favorite restaurant, ordering the Filet on the menu, only to be padded on the back and told it is not available, enjoy the pasta instead, I may not come back.

    So if you think that a Verizon customer, walking into the store wanting an iPhone, found none, and would be happy with a different smartphone they didn't want, year after year...now that is the real definition of a sheep!;).

    It is an interesting exercise. All or most phones are subsidized. The iphone cost about $188 in parts and about $208 (32Gb) with manufacturing added in. I'm no accountant, but I read that Sprint paid $20 Billion for 31.5 Million iPhones, so that is $635 per phone. Makes sense since an unlock iPhone runs $749. The mgfr cost for Apple are the cheapest because of volume. But I've read the the top Android phones have the very much the same mgfr to retail ratios.

    Let's assume that price is right. So if Apple or Verizon sells 4.3M iPhones that is 4.3M x (635-299) or $1.4 B in loss. $299 is the retail price for 32GB iPhone. Using $30 a month data plan alone, that is revenue of 30 x 12 x 4.3 M or $1.5 B. So in one year, they recoup the loss (not counting voice or text revenue stream), plus they have you hooked in for the next LTE iPhone or whatever.

    Plus Verizon doesn't sell all the Verzion phones. Some are sold by Apple. Not sure what the revenue sharing is there, if any. Plus Verizon doesn't service the phones.. It lets Apple bear the cost of the retail store for service or just questions at the Genius bar. Not the case for other smartphones...the staff time comes out of Verizon's pocket.

    It must work, I'm sure the numbers and marketing guys are not dumb...
     
    #4 viewfly, Jan 25, 2012
  5. RadioRaiders

    RadioRaiders RF Black-Belt
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    Weird. If I click the hotlink, it goes to a 404 page. But if I copy/paste the URL into my browser it works :confused:

    Ha-ha, good points, and well taken. However, the iPhone is not a "standard stock-and-sell" phone. Apple knows people want it and charge a premium and tack all kinds of weird things to it (didn't they nail AT&T for a % of profits on customer contracts too?) If I was a cellular operator, I would think twice and look at the fine print very closely before agreeing to sell the iPhone. But you're right, I'm sure VZW accountants aren't dumb and figure this will increase revenue or they wouldn't have done it. And yes, offering customers variety is always a good thing ;)
     
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    #5 RadioRaiders, Jan 25, 2012
  6. charlyee

    charlyee Ultimate Insanity
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    #6 charlyee, Jan 25, 2012
  7. viewfly

    viewfly Mobile RF Advisor
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    Re: Most of Verizon loss was from Pension obligations.

    I don't get it. I created the OP and the reply on my Dell (with Safari). It doesn't work for me either. But on my iPhone, with Tapatalk, I get to the correct Verizon page.

    I can't edit it, but if you can fix it, go right ahead. As RR said, right clicking my link will copy the correct html.
     
    #7 viewfly, Jan 25, 2012
  8. viewfly

    viewfly Mobile RF Advisor
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    Re: Most of Verizon loss was from Pension obligations.


    If you go to this page, and click on the link...it works.

    iPhone Represents 55% of Verizon's 4Q 2011 Smartphone Sales - Mac Rumors

    I can no longer even paste it as before. I think it is a Verizon issue...says that the browser is not supported, when in fact it is.

    weird.
     
    #8 viewfly, Jan 25, 2012
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