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  • Why Verizon Needs the iPhone More Than Apple Needs Verizon


    A new analyst report shows an alarming drop in Verizon's smartphone sales beginning last summer, just as iPhone 4 sales took off, and all Verizon smartphone sales severely lagging the iPhone. The numbers, which got big play on Fortune and the Wall Street Journal's All Things Digital site, may indicate why Verizon is now ready to play ball with Apple, after years of turning them down.

    ITG Investment Research analyst Matthew Goodman's report underscored the well-known fact that Verizon has bet heavily on Android, showing that handsets based on Google's OS made up 80% of smartphone sales last month, with 46% of them being Motorola Droids. As recently as two years ago, RIM was bragging about how the BlackBerry was Verizon's best-selling device, but now they're below 20% at the largest US carrier. These numbers - which are apparently based on independent retailer reports and are not a leak as was initially reported - were also looked over by Horace Dediu at asymco, who uncovered another interesting trend. In the third quarter of this year, AT&T not only sold more iPhones than Verizon sold smartphones from every manufacturer, it also outsold them by a factor of nearly two to one. Fewer than 3 million smartphones of any kind were activated on Verizon in the third quarter, while AT&T activated more than 5 million iPhones.

    This fact, probably more than any other reason, may have led Verizon to drop its hard-line stance and begin negotiating in earnest. According to most reports, Verizon came to the table in August of this year, right as smartphone sales began their tumble. A recent study indicates that Verizon may double its smartphone sales by bringing the iPhone on board. Since the carriers make their money in service fees, not handset sales, this would represent significant income for years.

    Source: AllThingsD
    This article was originally published in forum thread: Why Verizon Needs the iPhone More Than Apple Needs Verizon started by Paul Daniel Ash View original post
    Comments 38 Comments
    1. whereswaldo's Avatar
      whereswaldo -
      Verizon's sales aren't just lagging behin AT&T's, Apple's sales are lagging behind a Verizon+AT&T Apple
    1. LSZ33's Avatar
      LSZ33 -
      For those of you who think Apple will leave AT&T behind, think again. Apple's best interest would be to get rid of exclusivity & have the iphone on every carrier. Verizon will get the iPhone but they still won't crush/destroy AT&T. I can't wait to see the iPhone expose Verizon's overhyped network & all of us who remain on AT&T will reap the benefits.
    1. GellBrake'rrrr's Avatar
      GellBrake'rrrr -
      I've had both carriers. I had Verizon for ten years. My problem with them was "No iPhone", so I bought an unlocked iPhone and used TMobile. TMobile's service sucked!!! So I signed up with AT&T. To me, AT&T & Verizon are just as equal.
      I do want Verizon to get the iPhone though.... Just for the competition of service, And rates.
    1. Rob2G's Avatar
      Rob2G -
      I Hope Verizon Doesnt Get The iPhone, I hope sprint Gets it. I Dont mean to be a troll but verizon sucks IMO.
    1. CynicalDriver's Avatar
      CynicalDriver -
      I hope Verizon does get the iPhone soon, it will immensely reduce the workload on AT&T's aging EDGE network, and allow for more consistent speeds and performance in the 3G network. This will hopefully allow AT&T to spend less on maintenance and more on upgrades (in areas without 3G) and a proper 4G network.

      I do have a bone to pick with this article:

      It was Apple who locked Verizon out, not the other way around. Apple made a strategic decision to use the AT&T network, because their GSM based network allowed Apple to deploy iPhones in more foreign markets than CDMA would have.

      Both CDMA (Sprint, Verizon,) and GSM (AT&T, T-Mobile,) have their own advantages/disadvantages, but the real decision lies with which one can make the most money.

      The only thing I can't figure out is why they didn't just make the iPhone a "global phone" in the first place, and include both (other than the obvious battery issue.) This would have allowed the phone to be used anywhere in the world that has a cellular tower (provided your carrier has an agreement with the tower owners for access.)

      Bottom line: GSM gave them more global customers.

      Source: Businessweek {iPhone network decision}
      Source: GSM vs. CDMA

      Footnote: Nextel uses a different network technology by Motorola, dubbed "iDEN," or "Integrated Digital Enhanced Network," which is the backbone of TDMA. Interestingly, Boost Mobile also uses this network. TDMA is expected to be phased out starting in 2013 at the latest.
    1. Rob2G's Avatar
      Rob2G -
      Quote Originally Posted by DRFP View Post
      CDMA has been rejected in many places around the world, if you travel a lot, it sucks to have a CDMA phone since you may not be able to use it besides the fact that its hard to unlock one for other carriers

      GSM is a better system with the unlock
      Yes GSM is waaay better I love being able to swap phone is a matter of seconds, I had sprint and verizon, and I prefer ATT much much more. I like being able to put my sim from my iphone 4 (using micro to full size sim adapter) in my iphone 2G when im doing something that could result in me droping my phone or falling on it ect. with out it being a big procedure.
    1. steve-z17's Avatar
      steve-z17 -
      So what else is new? All Verizon has is Android phones and blackberries...the iPhone would do wonders for them!

      Quote Originally Posted by Rob2G View Post
      Yes GSM is waaay better I love being able to swap phone is a matter of seconds, I had sprint and verizon, and I prefer ATT much much more. I like being able to put my sim from my iphone 4 (using micro to full size sim adapter) in my iphone 2G when im doing something that could result in me droping my phone or falling on it ect. with out it being a big procedure.
      I completely agree with this! I like being able to take my sim card out and put it in another phone if I want, tons more freedom then CDMA!
    1. Dave_Xiavia's Avatar
      Dave_Xiavia -
      Quote Originally Posted by athleticswimmer View Post
      I can't wait to see the iphone on verizon although I really want it on t-mobile

      haha was thinking about those Verizon Droids commercials were at the end they say "DROID"- in a robotic voice. I wonder what kind of commercial there gonna do with the iphone once it's on verizon HINT: "IPHONE"- in a robotic voice.
      I think if Verizon makes an iPhone commercial, when refering to the droids, it should say "AVOID"



      I'm not a fan of verizon, but I am a fan of shutting up all of droid fan boys.
    1. Jahooba's Avatar
      Jahooba -
      The only thing surprising here is that WebOS has made an appearance on that graph. I was in the Verizon store the other day and I didn't see one Pre or Pixi.
    1. klouud's Avatar
      klouud -
      In response to an earlier comment: IMO the only phones that can hold a candle to the iPhone 4 are the Galaxy S / Nexus S Android handsets. I'd have to go with the Nexus S because it will more than likely run a vanilla version of 2.3. I hate the HTC front ends.

      We all know that Android will eventually become the most widely distributed mobile OS because of its creator (google) and the fact that it can be loaded up on almost any device. Its just common sense - however, no one specific Android will ever overthrow the iPhone. So basically we have another Microsoft/Apple scenario on our hands.

      tim
    1. NooK's Avatar
      NooK -
      Quote Originally Posted by saunupe1911 View Post
      I also believe the next iPhone will be 4G (probably LTE) and at least 4 inches long. As of matter of fact, I would bet a large lump sum of cash on it
      Sorry but that's most likely not gonna happen. LTE still does not have any voice standard whatsoever which means that if AT&T were to get an LTE Phone next year it will either not have any voice standard in it (Meaning all you do is to buy a data plan and use your voice ip program of choice like Skype) or that Iphone will only work in the AT&T network and nowhere else.

      Maybe in 2012 but it is highly unlikely to see it next year.
    1. alexevo's Avatar
      alexevo -
      Something to consider. I have a nokia 2610 which is one of the most basic of basic candy bar phones with only really phone, SMS, and speakerphone. It never drops calls in the mountains like the iPhone does when I have the iPhone on EDGE only. Why is that? Also I have a cheapo motorola candybar phone on verizon and when in those same mountains it works fine for voice and text on 1XRTT which is like edge/GPRS but the CDMA version. Lastly when I had my droid incredible it also got crappy reception in the same places my iPhone did when it was on or off verizons 3G service.

      Therefore I think it's just a hardware problem and verizon won't perform any better and I'll be sticking with AT&T as soon as I switch my other line over from verizon.
    1. CynicalDriver's Avatar
      CynicalDriver -
      Quote Originally Posted by alexevo View Post
      Something to consider. I have a nokia 2610 which is one of the most basic of basic candy bar phones with only really phone, SMS, and speakerphone. It never drops calls in the mountains like the iPhone does when I have the iPhone on EDGE only. Why is that? Also I have a cheapo motorola candybar phone on verizon and when in those same mountains it works fine for voice and text on 1XRTT which is like edge/GPRS but the CDMA version. Lastly when I had my droid incredible it also got crappy reception in the same places my iPhone did when it was on or off verizons 3G service.

      Therefore I think it's just a hardware problem and verizon won't perform any better and I'll be sticking with AT&T as soon as I switch my other line over from verizon.
      That phone is based on the classic Nokia "candybar" phones which always excelled in the reception department. They even suffered very little when the antenna stems were removed in favor of internal designs.

      I still think they had the best reception of any phone to date.

      The reason you can still get signal in those areas is hardware rather than network, yes. However, the features on those phones are so limited, by today's standards, that they are useless to anyone but the most basic user.

      Rural areas have fewer towers, and as such newer phones have to work so hard to stay connected that you often can't communicate with anything less than three bars. You may receive fine, but you're often garbled to them.

      There may be an FCC transmission regulation at play, but I am not sure. I know that the FCC put a cap on FM transmitters in 2007 or 2008, due to radio stations complaining that Satellite Radio users might bleed their feed over to cars nearby and block the station, which was more common than you'd think. Perhaps a similar event occurred with regards to cell phone transmissions.
    1. alexevo's Avatar
      alexevo -
      CynicalDriver - thank you that explains everything. i wondered why that happened but it makes sense now. aside from having to call/text and use speakerphone i really can live without the other features temporarily plus the battery life is infinitely better on the nokia obviously.

      so let me ask this; are there any new phones with more features that will perform as well in less than ideal reception conditions?
    1. CynicalDriver's Avatar
      CynicalDriver -
      Quote Originally Posted by alexevo View Post
      CynicalDriver - thank you that explains everything. i wondered why that happened but it makes sense now. aside from having to call/text and use speakerphone i really can live without the other features temporarily plus the battery life is infinitely better on the nokia obviously.

      so let me ask this; are there any new phones with more features that will perform as well in less than ideal reception conditions?
      I honestly can't say with any level of certainty, I've pretty much had the iPhone (1, 3G, & 4) since it came out. I had no need to keep up with all the other stuff AT&T offered, because none of it compared in features.

      I can say that the i4 gets much better reception than any previous model, despite all the grip-of-death issues. So I have seen a large improvement, though it's still not where it could be.

      I used to swear by those old Nokia bricks, every time I switched to Motorola, Samsung, or Sanyo, I ended up giving the phone back within the 30 days because of reception issues.

      I do like LG's performance, but their software and construction quality has gone WAY down. The LG CU-500 was an amazing device (owned one for 8 months, until the iPhone was released) and seemed to have the same reception as my old Nokia.

      The problem is that phone manufacturers have pretty much resigned themselves to two ideas:

      1) Quality doesn't matter: Insurance plans and 2-year, or less, renewal timeframes mean the phones can be less rugged.

      2) Features are more important than reception. Less investment in antenna design, and more in feature implementation.

      All I can say is, good luck, and take advantage of the 30 day grace period you have when upgrading. If you don't like it, take it back and try another one. The 30 days refreshes every time you trade-in.
    1. Sanady361's Avatar
      Sanady361 -
      There's too many reasons to list.
    1. that_girl's Avatar
      that_girl -
      Quote Originally Posted by vantheman169 View Post
      As much as I hate Verizon and Sprint i think there should be an iPhone for every carrier, uncluding T-mobile. The more the the better. Less strain on AT&T's network and people who LOVE Verizon can go to their crappy *** service and Sprints Crappy *** customer service. Competition would be great for everyone who owned an iPhone as far as carriers and plans.
      I agree. I would gladly go back to Verizon if they had the iPhone.
    1. Dukerdawg's Avatar
      Dukerdawg -
      I have had all iphones except iphone 4. I now have the Droid incredible after the original Droid as well as an ipod touch 4th Gen. Have seen the good and the bad on both sides and must say where android is lacking, it more than makes up in other areas as does the iphone. I've been waiting forever for verizon to get the iphone. Now that they might get it I no longer want it. It's too much of a hassle to jailbreak it everytime an update comes out. Still like to visit this forum to see what's new and to see about different Apps that were just released. Don't think I'll jailbreak my ipod touch since my Droid does everything else i need it to. Why did I get an ipod? It was a gift, and I do still like apple products. I'm not blinded by my loyalty like alot of people are on both sides.