Verizon iPhone Sales Surge in Q4

Verizon Wireless doubled its iPhone 4S sales in the fourth quarter of 2011, setting the operator up for growth in 2012.

Fran Shammo, CFO of part-owner Verizon Communications Inc. (NYSE: VZ), revealed the sales numbers at a Citigroup investor conference this week. The operator sold 4.2 million iPhones in the final quarter of 2011. This was more than double the number of iPhones Verizon Wireless switched on in the previous quarter.

Why this matters
The news is good for Verizon, overall, but could herald a hit in wireless margins in the short-term because of the subsidy costs of the iPhone 4S. "We believe the strong high-end device sales indicate the company increased postpaid market share during the quarter and should lead to favorable operating and financial performance in future quarters," writes Mizuho Securities USA Inc. analyst Michael Nelson in a research note.

"However, upfront costs will dilute 4Q11 results, leading to a reduction in our wireless EBITDA margin estimate to 42.3% from 46.6% and our normalized EPS estimate to $0.50 from $0.56," the analyst continues.

Investors don't appear to be wild about taking the short-term hit. Verizon Communications shares continue to trade nearly one percent -- or $0.36 -- down this Thursday morning.

Verizon is due to report its fourth-quarter results on Jan. 24.

For more
See more on Verizon's iPhone activities:

— Dan Jones, Site Editor, Light Reading Mobile

joset01 12/5/2012 | 5:46:37 PM
re: Verizon iPhone Sales Surge in Q4

Funny, I'm writing a blog along those lines. Also makes me wonder if VZ is stealing iPhone share from AT&T and/or Sprint?

FredStein 12/5/2012 | 5:46:37 PM
re: Verizon iPhone Sales Surge in Q4

Big growth, in % and absolute units. And despite the lack of an LTE iPhone. I've heard super enthusiastic first hand accounts about the awesome LTE uers experience. So LTE is great.

This prompts question. How many of these new Verizon iPhone subs switched from one of the early Androids? The Android unit sales started their massive surge in Mid 2009. Note, I'm not suggesting that iPhone is a threat to Android. Both have compelling biz models.

FredStein 12/5/2012 | 5:46:36 PM
re: Verizon iPhone Sales Surge in Q4

A2012 prediction: We will see Android users switch to iPhone. For more detail, my blog:  http://bit.ly/w6AwmN


I will a point about security. Just learned that adding IPsec to Android is tough. Slashdot story:  http://it.slashdot.org/firehos...



alandal 12/5/2012 | 5:46:35 PM
re: Verizon iPhone Sales Surge in Q4

Both have compelling biz models?

You mean compelling, but different biz models? Or the same model, but nevertheress compelling?

I failed to see it...

FredStein 12/5/2012 | 5:46:34 PM
re: Verizon iPhone Sales Surge in Q4

Compelling but different.

Google plans to make money from ads, maybe mobile commerce, and who knows mobile banking some day, but no money from the device.

Apple makes great money from the device (Trefis.com shows that the iPhone as a business is worth about $200B and more adding in the iPad). While Apple makes money from the Apps, and Ads, it's small comparatively.


Google: Ads

Apple: Products

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