IPhone 5 Will Be the Real Test of Apple's Strength on Verizon

images 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.”

Anonymous

“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”

Name anywhere that release on an additional carrier has drawn queues, anywhere in the world.

NOWHERE.

Users don’t care that the phone has a new part number and a different radio chip.

It wasn’t the launch of a new phone. Just a “yawn” new carrier, hyped up by the press and analysts.
?••?FreezeBurn?••?BTB®

I’m not buying AT&T’s sloppy seconds. I’m waiting for the 5.
demodave

To be fair, a different radio chip *does* have real singificance, but the new carrier may not. I beleive that tha CDMA chip will still be important afterthe iPhone 5 arrives, because there will be a “low cost” iPhone lagard available that will be able to sell in places where the GSM phone cannot or will not. Just my two cents.
Anonymous

@demodave

Your thinking technical. Not user.

CDMA / GSM is just something carriers do. Its not something 98% of users care about. More than that may care about availability on Verizon, and that may require CDMA, but they don’t care about CDMA per se.

Since the comment was with regard to the idea of “…typically large crowds that have greeted previous launches of the iPhone…”

I think it is pretty clear that in this context, this was not a launch of a new phone, but just a different carrier who required some internal differences in the phone.

There have been many such launches all round the world. You have never drawn crowds and long queues at any of them.
demodave

Right. I don’t disagree about the past launch at VZ. I’m just thinking about whether CDMA iPhone 4 will still sell after iPhone 5 launch. I’m thinking yes.
Anonymous

@daveDemo

OK. Well I guess that depends on whether they still sell the iPhone 4 after the iPhone 5, or 4S comes out.

If they do, then I imagine both the CDMA and GSM versions will continue to sell.
Anonymous

They sold a ton of Verizon iPhones, though. It accounted for over 10% of iPhone Web traffic in the US after the first 6 weeks. That’s up against 10 months of AT&T sales of iPhone 4, 22 months of AT&T 3GS (which you can get for as little as $19 now), and all the iPhone 3G and even a small number of original iPhones.

Verizon is a closed network … their customers are used to buying direct from them, and they do huge business online. Their users are also more geographically diverse, more spread out, more rural. So it’s not surprising that they appear to be making stealth sales compared to AT&T.

If you are enthusiastic enough to line up, you already switched to AT&T. On Verizon, you saw their smartphone sales collapse after credible rumors that Verizon was getting iPhone 4. That was the Verizon method of lining up. They lined up their contracts.
http://www.youtube.com/dfmediainc Triny D

number one selling phone in February is a disappointment?
http://pulse.yahoo.com/_7PSYIBYSL3IERNYK7I5R5KXBHI Ryan

The real success of the Verizon iPhone & iPAD will be when Motorola announces a drop in profits or wider loss than anticipated.

Samsung’s profits have dropped by 34%.

And eventually, it would be great to see Apple run both of these companies either out of the cell phone and tablet market all together, or out of business period.

Next in line: HTC.

IPhone 5 Will Be the Real Test of Apple's Strength on Verizon

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