Apple's iPhone is scheduled to make its way to Verizon's network on Feb. 10, ending the exclusive deal that Apple had in place with AT&T for more than two years. That day will be an important one for both current and future Verizon customers. It will also be a landmark day for Apple as it brings its beloved smartphone to over 90 million more customers.
But the launch of Apple's iPhone on Verizon's network might be most important for the carrier itself. For years, its customers have waited patiently for Apple's smartphone to make its way to Verizon's network. Along the way, it has watched AT&T continue to perform well financially, and grow its customer base.
Now it's Verizon's turn. As it comes off a quarter where it couldn't beat the Street on earnings, it's clear that the iPhone couldn't have come at a better time.
1. The subscriber base is growing
If nothing else, Verizon has proved that it can keep its customers even without the iPhone. The company announced during its last earnings call that it added 872,000 postpaid customers and 803,000 retail customers during the last quarter. All told, it now has 94.1 million customers using its service around the United States. With that growth it seems like the perfect time for Apple and Verizon to turn many of those customers into paying iPhone users.
2. It's not beating AT&T without the iPhone
What better time for Verizon to get the iPhone than when it's trailing AT&T in revenue and profits? During the third quarter, the last time AT&T reported its earnings, the company generated over $31 billion in revenue and an $11.6 billion profit. Verizon, on the other hand, generated over $26 billion in revenue and just $881 million in profit during that quarter. That's certainly nothing to scoff at, but the major difference in earnings seems to indicate that Verizon needs to boost its revenue and profits. It can get that with the iPhone.
3. Its 4G network is far ahead
Although it's nice to have the iPhone, that device alone won't be enough for Verizon to coax AT&T users to come to its service. After all, they already have the iPhone. But if Verizon can make the point that it has the best service along with the iPhone, it might have a better chance. That's why it's quite fortuitous forVerizon to get the iPhone now when it has a sizable lead over AT&T in 4G. As of this writing, its 4G service is in about 38 cities across the United States. AT&T has yet to release its offering. That's an important distinction that might help Verizon attract AT&T's iPhone users.
4. Earnings aren't matching expectations
As mentioned, Verizon had some trouble matching AT&T in the third quarter. In its fourth-quarter earnings, which it announced on Jan. 25, Verizon missed the Street's earnings expectations by all of 1 cent per share. That's miniscule, but it indicates that the market is expecting more from Verizon and it's just not getting it. With the iPhone, it might be able to turn things around. Apple's smartphone is wildly popular and Verizon customers are dying to get their hands on it. The smartphone could be the secret to reigniting Verizon's earnings.