Verizon CFO on iPhone: "We Are Not a One-Device Company"

The Verizon iPhone just zoomed past the 1 million devices-sold mark, and according to Verizon CFO Fran Shammo, the "launch has gone flawlessly."

"Right now, so far, we're very pleased with the results," he said.

Shammo, who talked to investors Tuesday morning at Morgan Stanley's technology telecom conference, spoke mainly about the iPhone 4, but was also asked about Droid penetration, AT&T, and the possibility of a low-end iPhone.

With regard to its relationship with Apple, one analyst wondered whether Verizon might fall into the same "trap" as AT&T and become known only for its iPhone. Shammo was adamant that while the carrier had a "very good" and "long-term" relationship with Apple, that the company is far from becoming too reliant on the popular smartphone device. "We are not a one-device company," he said. "We want a balanced portfolio. So, we don't believe it's a trap we'll fall in."

In particular, Verizon has built a very good relationship with Android-based device manufacturers. Despite reports and rumors that there'd be a great migration of Droid users to the Verizon iPhone, Shammo is doubtful. "Obviously, the perception is that the Droid users want to go to the iPhone," he said. "I don't really see that right now. Of course, we're going to have some customers who want to go to the iPhone. But I think the Droid people who use Droid are very happy with it." Although he agreed that some Droid users have switched to the iPhone (he declined to disclose related figures), Shammo was less clear about whether Verizon would create more incentives to attract customers using competing the devices, be it by subsidizing upgrades or cancellation fees.

"We hear reports of a low-end iPhone coming out—trying to get smartphone penetration into a lower demographic," the moderator said, before asking what opportunity Verizon sees as smartphones become more affordable.

Shammo did not address the low-end iPhone rumors, but did remind investors that Verizon already had put subsidies in place to attract new subscribers, regardless of demographics. "Let's step back, why did we do the unlimited $30 plan on the iPhone?" he said. "Well the reason we did that was [because] we didn't really want to put up a barrier to anybody who wanted to come over to experience the Verizon wireless network."

But Shammo also said such pricing was "not a long-term strategy," specifying that Verizon would return to tiered pricing by mid-summer.

Still, he did offer some hint that the market was heading in the direction of less-expensive smartphones.

"With the competition that's coming from China and some other manufacturers, it's going to push that smartphone price down," Shammo said, "which means more and more people will be able to afford it."

"We have got to give them an entry point."

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[Image by Andrew Hur]

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  • Kevin Ohannessian

    I hope the rumors of multiple iPhones -- smaller and bigger -- turn out to be true. A little diversity and adaptability is not a bad thing.

  • Orrin

    It's the monthly fee! I upgraded my Verizon wireless phone last month to a new dumb phone, not because I couldn't find a smartphone that was reasonably priced, but because Verizon (and most carriers I believe) make you tack on the "smartphone tax" of an overpriced data plan. I became a Verizon Wireless customer when they offered the Connect plan, a plan that includes unlimited data and messaging with a block of minutes that I never go over. Until Verizon will let me keep the same plan that services my needs well I will never be a smartphone customer. Yes I think $100 per phone, per month is too much for the service that I pay $60 for now.