And that’s the explanation for last night’s stock swoon, which followed a solid-to-good Q1 earnings report from the video company.

Specifically, Wall Street doesn’t believe Reed Hastings’s prediction that his company will add seven million customers to its U.S. streaming-video service this year. For a couple reasons:

• That’s the same growth rate that Netflix had back in 2010. But back then, Netflix was growing from a much smaller base. At least as important: Back then, it had the subscription streaming-video business more or less to itself. Now it is facing competition from Hulu, Amazon and Comcast, with more — like a Redbox/Verizon service — on the way.
• Hastings says Netflix can pull this off, even though next quarter’s growth will be much slower than Wall Street was expecting. Netflix has a complicated explanation for this, involving “seasonality” and the size of the company’s subscriber base. Short version: Trust us, it will all work out in the end.

These are the kind of arguments that Hastings used to win, because Netflix was one of tech and media’s most amazing growth stories, and Hastings had the aura of a man who could see around corners.

But 2011 changed all that. Now, if Hastings tells Wall Street that he can see the future, he’s going to get plenty of pushback. Yesterday’s conference call was dominated by questions about his 2012 growth predictions. The first one set the tone: “Why are you so confident?”

That one will take about eight months to explain. Let’s see if investors are that patient.

Some argue that it is. BTIG Research analyst Walter Piecyk recently cut his rating on Apple, theorizing that U.S. carriers will soon rein in their iPhone subsidies in an effort to boost their own margins. And were that to happen, a significant contraction in iPhone sales would likely follow.

Question is: Will it happen? According to a new analysis from CLSA, the answer is probably no — at least not for the next 18 to 24 months.

Which is great news for Apple. CLSA figures iPhone subsidies accounted for $19 billion of Apple’s fiscal 2011 revenue. And about 46 percent of that came from North America. So if AT&T, Verizon and Sprint were to push to lower the subsidies they pay to sell the iPhone, Apple could take a revenue hit. Indeed, some observers have estimated that a $100 drop in the iPhone subsidy would trim $7.50 from Apple’s earnings-per-share for fiscal 2013.

But that’s an unlikely scenario.

Why? Because, CLSA argues, the structure of Apple’s carrier agreements will prevent it from occurring.

“We believe these are multiyear agreements which tend to stipulate subsidy policies up front,” CLSA analyst Avi Silver explains. “For the major carriers, we believe these agreements have most favored nation clauses so any offering from Apple to one carrier would have to be offered to the other. During the length of these multiyear agreements, we believe U.S. carriers would need permission from Apple to alter subsidy levels.”

And if that’s the case, they’re obviously going to have a difficult time getting it. More to the point, that hypothetical most-favored-nation clause — if it exists — is going to make it tough to trim iPhone subsidies for a while.

Says Silver, “For AT&T, we do not know when its multiyear agreement expires but Verizon and Sprint are likely locked in for some time. As a result, we think that an outright reduction in subsidies is an unlikely scenario in the U.S. market.”

Apple reports earnings after market close today.

During Verizon’s first-quarter earnings call Thursday, CFO Fran Shammo voiced the carrier’s support for Microsoft’s mobile OS, saying it’s “hoping to do the same thing” with Windows Phone that it did with Android.

“It is important that there is a third ecosystem brought into the mix here,” Shammo said. “We are fully supportive of that with Microsoft. … We helped create the Android platform from the beginning and it is an incredible platform today, and we are looking to do the same thing with a third ecosystem.”

Which is interesting to hear, because that certainly doesn’t appear to have been Verizon’s intent to date. Currently, the carrier has only one Windows Phone in its portfolio — the HTC Trophy, and it’s an older model. So for Shammo to suddenly announce that it’s going to back Windows Phone the way it backed Android suggests Verizon has finally dispensed with the wait-and-see approach it had taken with the platform.

The question now: What Windows Phone devices will the carrier add to its portfolio? Shammo didn’t say, but there’s at least one easy guess: One of Nokia’s Lumia devices.

Of those, 3.2 million were iPhones.

Now, that’s significantly less than the 4.3 million the carrier sold last quarter.

But remember: Last quarter saw record-setting iPhone sales of 37 million for Apple, driven by the launch of the iPhone 4S. So, while sales have certainly slowed, they’re impressive nonetheless.

After all, they represent more than half of Verizon’s smartphone business. And consider this: Verzion sold just 2.1 million 4G LTE-enabled smartphones during the same period — a million less than the iPhone, which is still 3G.

The wireline and wireless operator said it earned $3.91 billion in net income, or 59 cents per share, for the first quarter, compared to $3.26 billion, or 51 cents per share, in last year’s first quarter. Verizon’s operating revenue was $28.2 billion, up 4.6 percent from a year earlier.

Verizon Wireless said it added 734,000 retail customers in the first quarter, including 501,000 traditional postpaid customers, to end the quarter with 93 million retail customers, a 5.2 percent increase from a year earlier. As of the end of the quarter, nearly 47 percent of traditional contract customers were using smartphones, up from 43.5 percent a quarter earlier. As far as new sales, almost three out of four new customers were opting for smartphones, up from a rate of three in five a year ago.

The company said it also posted improvements in the area of customer defections, known in the industry as “churn.”

On the wired side of things, Verizon said it added 193,000 net new FiOS Internet connections and 180,000 net new FiOS Video connections in the quarter, to give it a total of five million FiOS Internet and 4.4 million FiOS video customers by the end of March.

Update: Verizon’s slides prepared for its earnings call offer up a few more interesting numbers:

iStockphoto | italianestro

The carrier said it will sell off all of the 700 MHz A and B licenses it got in a 2008 auction — if it is allowed to buy the AWS licenses it wants to get from the cable company consortium. Verizon says its 700 MHz C band spectrum and the AWS frequencies are enough for its LTE network.

However, it made it clear that its plans to sell the A and B band spectrum is contingent on government approval for several AWS purchase plans that are being reviewed by the Federal Communications Commission and Department of Justice. Verizon has pending deals to acquire spectrum from Cox and Leap Wireless as well as SpectrumCo — an entity owned by Comcast, Time Warner Cable, and Bright House Networks.

Verizon said it is announcing the sale now “to ensure the process can move forward quickly once the AWS license transfers have been completed.” Cynical observers might think they want to push regulators just a teenie bit, too.

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers,” Verizon VP Molly Feldman said in a statement. “Moreover, provided our acquisition of AWS spectrum is approved, our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers.”

(Image courtesy of iStockphoto|italianestro)

Once users have gobbled up that allotment, they can buy another 100MB for another $25.

The rate, which is available starting April 23, is still way more than one pays for data in the U.S., but also less than one might expect to pay under previous options.

Depending on how long a customer has been with their carrier and other policies, customers may also have an option to have their phone unlocked and buy a SIM card in the country in which they are traveling. That option requires some planning and hassle, but can save even more money, especially for heavy data users.

And, depending on which of two studies you believe, both can lay claim to having the fastest network.

AT&T is pushing a PCWorld study that found its network to be the faster of the two.

“In our tests, AT&T’s new LTE network pumped out the fastest speeds of any 4G provider,” PCWorld senior editor Mark Sullivan said in a statement.

Verizon, meanwhile, calls attention to a RootMetrics study that finds that it has the better-performing of the LTE networks.

“While AT&T outperformed Verizon in pure LTE download speeds, Verizon had the clear upper hand in the more meaningful real-world experience of average download and upload speeds,” RootMetrics president Bill Moore said in a post on GigaOM. “AT&T’s LTE might be faster, but our overall experience with AT&T was still slower than what we found with Verizon.”

One thing is clear: Verizon’s network covers more ground. The company is launching more cities this week and with those will have two-thirds of the U.S. population covered. AT&T’s network is still smaller, but it is rapidly adding cities as well.

Sprint, meanwhile, is just gearing up to launch LTE, while T-Mobile is aiming to launch an LTE network next year.

MOG will open up for business in conjunction with Telstra, an Aussie telco; a partnership will let Telstra subscribers add MOG’s monthly service by checking a box on their billing statement.

These kinds of packages aren’t new, and several services — including Spotify in Sweden, Deezer in France and Rhapsody with Metro PCS in the U.S. — have been able to juice their subscriber numbers using them.

But it’s worth reminding people that the subscription music industry places a whole lot of faith in this model, and that lots of people think the subscription music model won’t really get mass adoption unless big service providers like Comcast and Verizon give it a similar boost.

The problem with that line of thought: Lots of digital media services have been trying to get the Comcasts of the world to add them into their system for a very long time. And with one brief exception — when Comcast and Rhapsody linked up — that hasn’t happened.

Still, they’re all trying quite hard to hammer out new deals.

Speaking of new deals: When is MOG going to close its deals with headphone maker Beats? I wrote about this one three weeks ago, and was told the deal was in progress but not closed. People familiar with the (proposed) transaction tell me that’s still the case. We’ll check back in a few weeks …

Indeed, Jefferies & Co. said that the first quarter could mark the first time ever that the number of postpaid customers actually declined.

“A Jefferies proprietary handset survey suggests volume expectations for [the first quarter] are the weakest in years, in line with our view that net adds are significantly lower in the quarter after an iPhone launch,” analyst Thomas Seitz said in a research note.

Jefferies sees “modest” growth in traditional customers for AT&T and Verizon, but declines at both T-Mobile and Sprint, which saw a big jump last quarter — its first with an iPhone.

“We believe there is a distinct possibility that Q1 could be the first time that the postpaid market, as a whole, loses subscribers,” Seitz said. Seitz noted that sales tend to be weak in the quarter immediately preceding and immediately following the launch of a new iPhone model.

Sales of prepaid phones may have also seen slower growth in the quarter, Seitz said.

Nonetheless, the carriers should see some revenue growth, thanks in part to the continued growth of smartphones as well as recent price hikes.

But, with smartphones already making up a big chunk of the business and nearly everyone having a cellphone, Jefferies said the wireless providers will be challenged to continue to post gains.

“Voice revenues are already in decline,” Seitz said. “We believe a material drop off in the growth rate of data revenues from slowing smartphone adoption, particularly in (the second half of the year), is a growing risk.”

This morning Verizon Wireless said that beginning April 22 it will charge subscribers an extra $30 to upgrade to a new phone. The fee will apply to existing customers buying new hardware along with a two-year contract, and Verizon says proceeds from it will be used to “continue to provide customers with the level of service and support they have come to expect, which includes Wireless Workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.”

What? You’ve never attended a Verizon Wireless Workshop? Or used one of its online educational tools? Well, you’re going to have to pay up anyway. To be fair, Verizon isn’t the only carrier to charge an upgrade fee, and its charge is lower than some of its rivals. Sprint and AT&T both charge $36.

And to think, they used to give you a loyalty discount for upgrading …

I’ve been using the iPhone since it came out in 2007. And while I’m satisfied with the way it works, I’m considering changing phones just to have something different—in particular a larger screen. What, in your opinion, are the best alternatives to the iPhone? I use mine primarily for email, along with checking stocks and weather.

A:

I would go with an Android phone, which has plenty of apps that are similar to what you are used to, and which typically these days come with larger screens, some exceeding 4.5 inches. There are always new models coming out, and there are so many that it can be hard to recommend one. But, in my tests, I’ve been especially impressed with the Samsung Galaxy models.

Q:

I’m a Verizon user currently on 3G and we’ve been promised 4G in our area by end of 2013. Do you have any indication Verizon is actually going to continue with LTE service or is this just a smoke screen? Are they really going to roll out new 4G (LTE) service or is this just chosen markets?

A:

I don’t know where you live, or when or whether Verizon Wireless plans to offer LTE, the fastest cellular data network, in your particular area. But I can say that, for Verizon, LTE is anything but a “smoke screen,” and I’d be stunned if the carrier didn’t continue rolling it out. Verizon has deployed it in over 200 markets and says it plans to cover 400 markets by the end of 2012. It’s a key part of the company’s competitive strategy.

Every carrier that deploys a new network starts with a few “chosen markets,” and there are always some areas left out, even years later, for various reasons. But from everything I know, Verizon is planning a broad national LTE network.

Q:

I run Windows 7 on a Mac using Parallels Desktop. Can I use the normal Windows update process to keep Windows 7 up to date or will it compromise the Windows setup through Parallels?

A:

Your virtual copy of Windows inside the Parallels software is designed to work just like Windows on a physical PC. That includes the Windows update process, which I have used many times on Windows via Parallels. This is separate from any updates made by Apple to the Mac operating system, or updates to the Parallels program itself.

Email Walt at mossberg@wsj.com