A day after AT&T and Apple, Verizon Wireless announced
the fiscal results of its most recent quarter, which included revenue of $26.99
billion—up just 0.3 percent from a year ago—the addition of 906,000 wireless
subscribers and the activation of more than two million Apple iPhones.
Ending AT&T's four-year run as the exclusive U.S. provider of the
iPhone, Verizon began offering a version of the iPhone 4 in February—to
Verizon's subscribers on Feb. 3 and then to the general public Feb. 10. During
an April 21 call with analysts and media, Verizon Chief Financial Officer Fran
Shammo said that 78 percent of its iPhone sales were upgrades, and 22 percent
were to new customers.
Shammo also offered some insight on Verizon's iPhone sales and explained why
he isn't expecting a decline in device sales during the second quarter.
"It's important to realize that when we launched the iPhone, initially
we only launched it through our direct channel and a couple major retailers.
And then in the beginning of March we launched it to the rest of our national
retailers and some of our regional retailers, and we really weren't 100 percent
out there with the distribution until mid-March," said Shammo.
"The second piece is that we only had two weeks' of sales worth on the
LTE device ... and finally we just launched the LTE device [the HTC
ThunderBolt] on the last day of the month. If you look at all of this... that's
why we only generated 2.2 percent of growth ... but we think that this will
continue to accelerate as the year goes on and we launch the [additional 4G smartphones]."
Verizon will only be able to stand apples-to-apples, as it were, against
AT&T when the iPhone 5 is released, Shammo added, confirming that it will
be a global phone.
While the Verizon iPhone 4 runs on CDMA technology, AT&T's iPhone runs
on GSM—as do most carriers elsewhere in the world. During a teardown of the
Verizon iPhone 4, repair sites iFixit and iSuppli noted that Apple had chosen to
replace the AT&T iPhone 4's discrete GPS
chip with a Broadcom GPS chip with "the
integrated GPS functionality of the Qualcomm
MDM600," iSuppli senior analyst Wayne
Lam wrote in a Feb. 7 report. While the chip saved Apple a few bucks, it also
supports both CDMA and GSM technologies. Theoretically, anyway.
"Can it be that ... when iPhone 5 is released there will be just one phone for both Verizon and AT&T?
That would be great," iFixit's M.J. said in a Feb. 7 video on the site.
"We can't tell just yet, but what we can tell is that while the chip
supports both GSM and CDMA, there's no modding [the Verizon iPhone 4] to work
on AT&T."
Shammo's comments suggest that Apple may indeed release a single phone to
both carriers.
Will the new iPhone also support 4G?
Here the Verizon executives bit their tongues, congratulating the analyst
posing the question for his voracity but saying that it's for Apple to announce
the details of its products.
Shammo also confirmed during the call that, mid-summer, Verizon will go from
unlimited pricing to tiered pricing for both its 3G and 4G devices.
Its first 4G smartphone, the HTC
ThunderBolt, has been enjoying strong sales—54 percent of its net adds during
the quarter came from the iPhone and the ThunderBolt alone.
"This is a true 4G device. You can put as much lipstick on 3 to make it
a 4, but this is truly a 4G device with the speeds of 4G, and I think people
are impressed and people will make their decisions," Shammo said.
"Out of the gate, we're very happy with the volume, and I think this will
continue as we continue to launch more 4G smartphone devices in the next few
weeks."
He added people are consuming much more data on its 4G network than its 3G
network, adding that the 4G network is "much more efficient." Still,
even with AT&T pursuing the purchase of T-Mobile and its
considerable spectrum holdings, Shammo said Verizon would keep its eyes open
for available spectrum but was feeling comfortable for the time being.
"We think we're in a good position until about 2015," Shammo said.
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