IPhone 5 Will Be the Real Test of Apple's Strength on Verizon
How much of an effect has the February debut of the long-awaited Verizon iPhone had on Apple’s bottom line?
We won’t know for certain until Apple reports its fiscal second-quarter earnings Wednesday, but when the device first arrived at market, word was that its sales were not meeting expectations. Certainly, it failed to draw the typically large crowds that have greeted previous launches of the iPhone. And the lack of any announcement from Apple or Verizon trumpeting early sales numbers, along with the leak of some damning alleged retail data , reinforced that perception.
Of course, Verizon didn’t launch the iPhone into a market with a vast untapped demand for it. In reality, anyone who absolutely had to have an iPhone bought it from AT&T. And anyone who refused to leave Verizon to do so likely pre-ordered it from the carrier as soon as they were able to. Verizon Wireless CEO Daniel Mead told The Wall Street Journal that 60 percent of the company’s iPhone sales had been online. Viewed that way, the Verizon iPhone launch wasn’t a “real” iPhone launch. That will happen with the iPhone 5.
“We note that the Verizon iPhone launch has widely been perceived as a disappointment,” said Piper Jaffray analyst Gene Munster. “But in some ways, we see the iPhone 5 as the true Verizon iPhone launch; the first time Verizon customers will have access to a new version of the iPhone. We believe that many Verizon customers made the decision to wait and purchase the iPhone 5 when it launches instead of buying the mid-cycle iPhone 4.”