Verizon iPhones, 4G HTC ThunderBolt Boosted First Quarter Results
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.