Verizon Wows with Q1 iPhone Activations
On Thursday, Verizon Wireless reported earnings that not only topped Wall Street analyst expectations, but proved once again that the addition of the iPhone to the mobile operator's menu has been a big boon for business.
Verizon reported a respectable 7.7 percent year-over-year increase in mobile service revenues. And interestingly enough, of the 6.3 million smartphones that the carrier sold during the first quarter, half were iPhones. With all the sales and new subscribers, Verzion said the quarter ended with the carrier having 93 million total retail customers.
But it must be remembered that while Verizon has sold a boatload of iPhones lately, the carrier doesn't exactly break the bank immediately on those transactions. New sales often hurt carriers' profit margins at first because they reportedly pay $600 for every device to Apple. The revenue comes in time and chiefly as a result of new subscribers who commit to two-year contracts.
"Verizon delivered double-digit earnings growth and strong cash flow this quarter," said Lowell McAdam, Verizon chairman and CEO. "We built momentum coming out of 2011, and our results show that we continue to execute in the key growth areas of our business."