The upsurge in sales of Verizon cell phones, especially iPhone 4 sales, has dominated coverage of cell phone sales in the past few months. Verizon announced that its first quarter revenues increased by 0.3 percent from last year’s figure. Net income rose from $443 million in first quarter 2010 to $1.44 billion for the March 2011 quarter. There is little doubt that sales figures were boosted by 2.2 million iPhone 4 sales. In making the earnings announcement, chief financial officer Fran Shammo hinted that a global phone may be available by year’s end.
The Long Awaited iPhone 4
The Verizon iPhone launch actually began on Feb. 3, 2011 with the taking of pre-orders. In its most successful first-day launch, Verizon recorded orders that totaled about 100,000 units within hours of the announcement. On Feb. 10, Verizon finally unveiled its iPhone 4 and scored record sales that outpaced rival AT&T for weekly iPhone 4 activations through the remaining seven weeks of the first quarter.
Verizon reported that of the 2.2 million activations, 22 percent were from new Verizon customers and 48 percent were current customers upgrading to a smartphone for the first time. The first rush of orders came from cell phone users who had long anticipated the advantages of the more reliable Verizon network.
On January 11, 2011, Peter Svensson speculated on the effect of Verizon iPhone sales in his article, “Verizon iPhone: The Bad News–And Why You Should Wait To Upgrade.” Svensson said, “Analysts now estimate Verizon will sell 5 million to 13 million iPhones this year, some coming from what AT&T would have sold. Many believe Verizon could sell more iPhones in the U.S. than AT&T this year, given pent-up demand from customers not wanting to switch to AT&T.”
Worth the Wait?
Not everyone advocated the leap to Verizon iPhone 4. After all, it was actually about 8 months old having been launched by Apple the year before. Some speculated that even the mighty Verizon network would falter under the onslaught of calls and app activity. One skeptic was Ben Patterson, a technology blogger for Yahoo! News, who voiced doubts in his Feb. 9, 2011 article “Upgrade Your Life: Reasons to hold off on the Verizon iPhone.” Patterson said, “Sure, we’ve all seen those Verizon 3G coverage maps that show the U.S. bathed in a dramatic swath of red, versus a spotty blue patchwork for AT&T’s national 3G coverage. But while Verizon may snare the brass ring in terms of coverage, AT&T has been turning heads with the sheer speed of its 3G network.”
Limitations
Patterson pointed out other differences between the Verizon technology and that of Apple. Verizon cell phones use a technology called CDMA while Apple uses GSM. CDMA phones only work on CDMA networks, which are located primarily in North American. Another limit of CDMA is that the phone doesn’t allow for simultaneous voice and data transmission. So, you can’t talk and surf the web or use data-enabled apps at the same time, whereas you can multitask on a GSM phone.
You can learn more about the difference between CDMA and GSM on our post, “Understanding smart phone wireless technology: CDMA vs GSM.”
iPhone 5 Anticipated This Year
In an April 21, 2011 article for AP Online on HighBeam Business, Peter Svensson elaborated on the iPhone 5 release and what it could mean for Verizon customers. The article, titled “Verizon CFO says next iPhone will work overseas” said of Fran Shammo, Verizon Communications Inc.’s chief financial officer, “Shammo didn’t say when the new phone would launch, but he implied that Verizon and AT&T would be on an ‘equal footing’ later this year. That would mean that the two carriers would get the next iPhone model simultaneously.”
Apple usually releases its new iPhone every summer but there is much speculation that this year’s release will be delayed because of Apple’s focus on developing sales for its popular iPad2. If it delays the release of its iPhone 5 until the end of the year in sync with Verizon’s release, analysts expect a lively sales competition. If, as expected, the new iPhone 5 has dual GSM/CDMA technology, then it will be a real clash of the titans.
