Apple Earnings Appetite Whetter: Verizon Not Cannibalizing AT&T’s iPhone

AT&T’s smartphone business is booming–with the iPhone in the lead. Verizon’s iPhone seems not to be cannibalizing AT&T’s sales in the way some thought.



AT&T’s smartphone business is booming, according to the lastest numbers–with the iPhone in the lead. Verizon’s iPhone seems not to be cannibalizing AT&T’s sales in the way some thought.

AT&T’s consolidated revenues up 2.3% on the previous year to $31.2 billion, shown 10.2% growth in wireless revenues and 8.6% growth in wireless service revenues, and it’s had a best-ever first quarter increase in total wireless subscriptions–up 2 million to total 97.5 million subscribers in service with “gains in every category.” But the standout’s this: AT&T sold 5.5 million smartphones in the first quarter, the largest for this time period in the company’s history. Backing up the fact the mobile net revolution is driving this change, AT&T revealed that “over a third” of total wireless revenues came from wireless data charges to subscribers. Smartphones now make up over 46% of AT&T’s postpaid subscriber base.

Plus, AT&T sold and activated 3.6 million iPhones during the quarter, up one million on the same period in 2010. The iPhone in fact accounts for 60% of AT&T’s smartphone share, with Android, RIM and Windows phones making up the other 40%.

This is the first quarterly report since the arrival of the Verizon iPhone and the end to AT&T’s exclusivity agreement with Apple in the U.S. And it suggests that the studies predicting Verizon’s product wouldn’t steal too many users from AT&T were accurate. It underlines the fact that the Verizon iPhone isn’t a panacea to cure American iPhone user’s woes, which were mainly focused on network instabilities and AT&T’s inability to cope with the huge data burden imposed by iPhone users (mainly in the New York and San Francisco areas).

It’s also a good sign for Apple, not just because increased sales are always good, but because the public seems to have gotten over the Antennagate affair that plagued the iPhone 4 at first. And it’s a statistic that’ll be scrutinized by the pro-Android body, which repeatedly proclaims the end of the iPhone is nigh because Android sales are soaring.

Can we conclude that AT&T has improved its network performance? Possibly, or at least the general public is less worried about that than before. Can we consider the iPhone still leading the smartphone war, in some ways? That’s plausible, given that Verizon is the U.S.’s biggest network, and yet AT&T’s iPhone sales are still on the rise–despite the network’s historically poor reputation. Undoubtedly we’ll learn more in Apple’s own quarterly finances, due later today.


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[Image: Flickr user cheekycrows3]

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