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Verizon Has Record Q4 iPhone Sales

Verizon Has Record Q4 iPhone Sales
January 22, 2013 4:24PM

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Verizon's high iPhone sales set up already high expectations for Apple in its own numbers later this week. Recent reports that Apple lowered component orders led to a Wall Street nosedive because some analysts saw the iPhone reaching the edges of its addressable market and beginning to yield to competitors.

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If demand for Apple's iPhone was weak in the last quarter, it certainly wasn't among Verizon Wireless customers. The nation's biggest carrier reported in its latest earnings data that it activated a whopping 6.2 million iPhones, or double the third quarter's 3.1 million.

It's also a big year-over-year increase from the 4.3 million iPhones Verizon sold in the fourth quarter of 2011.

The sequential jump isn't surprising given that demand typically slumps in anticipation of an upgrade, and Apple released the iPhone 5 in September. About half the iPhone sales were iPhone 5s, which are capable of long-term evolution high speed data, which suggests a busy holiday season for the devices at Verizon stores.

Eclipsed Android by Far

Overall, Verizon saw its largest smartphone sales volume to date, 9.8 million, more than half of which were iPhones, according to statistics provided by a Verizon spokeswoman.

The strong iPhone sales are particularly noteworthy since Verizon launched no fewer than eight new competing smartphones in the same quarter: the Droid Razr HD and Droid Razr Maxx HD by Motorola; Windows Phone 8X and Droid DNA by HTC; Lumia 822 by Nokia; Galaxy Note II and Galaxy Stratosphere II by Samsung; and the Spectrum 2 by LG. All those devices, like the iPhone 5, are LTE capable, since Verizon no longer introduces new 3G smartphones.

In its earnings statement, Verizon said smartphones accounted for more than 58 percent of the retail postpaid customer phone base, up from 53 percent at the end of the third quarter in 2012.

That sets up already high expectations for Apple in its own numbers -- the iPhone is its biggest money maker -- to be released Wednesday. Recent reports that it lowered component orders led to a Wall Street nosedive because some analysts saw the iPhone reaching the edges of its addressable market and beginning to yield to an onslaught of competitors. Other analysts are more bullish, saying the lower component orders simply mean Apple isn't worried about supply shortages it faced in the past.

A Question of Time?

Verizon's solid iPhone numbers also put a spotlight on No. 2 carrier AT&T Mobility, which lost its exclusive distribution deal with Apple in 2010. With potentially millions of people still locked in contracts with AT&T, it may be awhile before Verizon can pull ahead in iPhone connections. But time may be on Verizon's side.

Wireless analyst Neil Shah of Strategy Analytics told us that despite the record numbers for Apple at Verizon, "in comparison, AT&T will still see relatively on par or maybe slightly higher iPhone sales than Verizon Wireless for Q4 2012."

"AT&T still shall hold 'the iPhone carrier' crown but Q1 2013 should be an interesting quarter, as iPhone momentum should continue at Verizon Wireless since it will be boosted by its first-ever iPhone 4 [subscriptions] due for upgrade."

A study last month by research and consulting group Kantar said in a 12-week period ending Dec. 23, the iPhone saw a six percentage-point jump in market share to 51 percent of the market, compared with the same period in 2011, with 19 percent of users having switched from Android devices, up from 9 percent.

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