Verizon: We Activated 2.2 Million iPhones

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VerizonVerizon reported on Thursday that it activated 2.2 million iPhones during its first fiscal quarter for 2011. The cell service provider revealed the information as part of its quarterly earnings report, a day after Apple and AT&T shared their quarterly earnings data.

AT&T reported activating 3.6 million iPhones during its first fiscal quarter, bringing the combined number of U.S. iPhone activations for the period up to 5.8 million. Apple reported selling some 18.65 million iPhones world-wide for the quater, marking a 113 percent increase in sales year-over-year.

Verizon also said it saw a 6.3 percent year-over-year increase in service revenue, and a 22.3 percent increase in wireless data revenue.

Verizon is only the second carrier in the U.S. to offer the iPhone, and is the company that brought an end to AT&T’s exclusive iPhone deal with Apple. Verizon’s version of the iPhone is CDMA-based, which means it can’t be used on GSM-based networks used around the world and by AT&T.

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Ross Edwards

The numbers are even better than they look:

1. Verizon had no $50 discount iPhone 3GS, so all 2.2m activations were full-sticker iPhone 4 handsets.  This means that virtually every customer who bought one wanted the iPhone specifically, not just someone who wandered by the kiosk and was like “Huh, fifty bucks?  Why not!”  This also means more revenue for Apple on a phone-by-phone basis than ATT reported.

2. Interested Verizon customers had only a couple of weeks of warning about the release, so only those at or near the end of their contracts could switch.

3. Interested ATT customers had the same situation as in #2, except also ATT aggressively locked users into high-ETF contracts when the iPhone 4 was new, presumably because they were aware they would only be exclusive for another six months from that point.

The Verizon iPhone customer base was never really going to be like Spider-Man, opening on $118 million and then tapering off, like the ATT launches had been.  It’s going to be, and we’ll probably find out it has been, more like Titanic: opening decently but then steadily adding a million or more new contracts a month, EVERY month, for the next few YEARS, chunk by chunk.  The sea change will happen as existing ATT and VZ contracts END and users find themselves free to Pareto-sort to the best overall offering.  That, not a huge immediate migration, has always been the true danger to ATT… the death of a thousand cuts.

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