Does Verizon discourage iPhone sales? Tales from the inside
Verizon of course denies any particular bias, but what do they say behind closed doors? To find out we spoke with Verizon sales associates, and what they revealed was…well…revealing. The representatives we spoke to reiterated that Verizon definitely does not make it official policy to push one mobile OS over another – during training sessions that were scheduled around the same time as the CNN article sales reps were reminded that it isn’t Verizon policy to “dissuade” people from buying iPhones.
It turns out that’s not the whole story though, as Verizon’s sales targets and compensation models paint a somewhat different picture. To be fair, Verizon’s main goal is to make money – like that of every other carrier business – and the easiest way to do that is to upsell customers from feature phones to smartphones. The reasons for this are obvious: smartphone customers must add data plans to their voice and text options, which adds quickly to a carrier’s bottom line. Verizon's specific target for smartphone sales varies by region, but according to our contacts can reach as high as 80% - that is 8 out of every 10 phones sold "should be" smartphones. Those numbers aren’t totally crazy – around 70% of mobile phone sales in Q2 were smartphones in the U.S., and some places do much better than the average.
The kicker of course is that the only 4G LTE phones available on Big Red are powered by Android.
Store and regional managers get reviewed (and compensated) based on how well their numbers match up against sales targets. Sales associates are also rewarded for selling 4G phones; we’re told that in at least some regions they receive an extra $25 bonus for each 4G phone they sell. The results are predictable: managers and sales associates alike do their best to push 4G phones. They certainly won’t stop you from buying an iPhone or a BlackBerry, but you’re likely to hear about the benefits of 4G before you do.
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1. mas11 (Posts: 1005; Member since: 30 Mar 2012)
They just want what they believe is best for their customers. Why sell them an outdated phone running on their 3G network when they could sell them a modern 4G Lte phone.
4. mas11 (Posts: 1005; Member since: 30 Mar 2012)
Btw nice article Scott and yep it comes down to profit.
5. clevername (Posts: 1379; Member since: 11 Jul 2008)
Because the customer may not use that much data or need fast data speeds. Maybe they just need access to an exchange server, or perhaps they want a windows phone for the portable ms office suite. Perhaps they want an iPhone for that seamless integration with their MacBook. Or maybe they want a Droid x2 because their wallet is lookin skinny and that Bogo deal is very attractive. and one last very likely reason...maybe they don't have 4G coverage and big red has no timetable for when they will. Point is, not everyone wants or needs a 4G phone.
7. mas11 (Posts: 1005; Member since: 30 Mar 2012)
DROID BIONIC is a free 4G Lte device for those who have light wallets. Plus for most people 4G is beneficial, sure there are a few ppl who it wouldn't help, but for the most part it will improve your smartphone experience.
30. bubbadoes (Posts: 298; Member since: 03 May 2012)
lite wallets... i dont think so. when the phone launched it was 300.00..its just following the path of All Androids from $300 to free in 8 months...i just happen to be stuck with mine for another 13 months on contract....never again though...i will buy my next phone at contract price and vw can keep theirr new shareeverything plans and overpriced contract phones and let me keep my unlimited cause im at 12 plus gigs a month..."can u hear me now"
53. hsnshw (Posts: 2; Member since: 14 Jun 2012)
That is exaclty why they are getting rid of unlimited data, because of users like you that abuse their service. "I can't hear you now, because you are an ass"
58. 14545 (Posts: 886; Member since: 22 Nov 2011)
I don't consider 12 GB abuse. That's actually possible just from using the phone itself. I regularly use 4-6 and I don't do anything out of the realm of "normal" usage. Abuse is the people that use like 20-50-70 GB etc. It's not people like him that caused it, its people like what I listed. That and VZW wanted to rake in some greater profits over the slightly heavy user like above.
11. Lucas777 (Posts: 2115; Member since: 06 Jan 2011)
well thats why they push 4g, but dont "force" it... from the article, it appears they are not reluctant to sell iphones and in fact push iphones over any other 3g phone... it doesnt seem outrageous to me that verizon would want to sell their most recent product that brings in the most cash-- although i do wish wp and ios would get on the whole 4g thing asap..
15. mas11 (Posts: 1005; Member since: 30 Mar 2012)
I agree man. I looked at Verizon's WP line up before I got my DROID 4 and it's pathetic, just the HTC Trophy. AT&T has a way better selection.
38. wsucoug13 (Posts: 164; Member since: 04 May 2012)
AT&T has a way better selection of phones period
49. mas11 (Posts: 1005; Member since: 30 Mar 2012)
Unless it's a Motorola phone, but yeah AT&T did a much better job picking its line-up of smartphones.
22. -box- (Posts: 3470; Member since: 04 Jan 2012)
One thing also is that Verizon wants as many smartphone users on LTE as possible to free up 3G bands for voice and text traffic, thus improving network stability. Sprint had/has the same goal with WiMax ( and now LTE) and AT&T has similar goals with its LTE.
27. blahb (Posts: 44; Member since: 16 May 2012)
Having lived in a 4G market for over a year struggling with the dozens of 4G related issues with the Thunderbolt and the Galaxy Nexus during that time period, I completely disagree. IMO all current 4G customers are beta testers for the network, while most of them first time smartphone users with limited cellphone knowledge. Luckily I am informed about phones but why would a business/carrier want first time users to deal with all issues 4G introduces with a near non-existent OTA process in place at VZW to address them. This will lead to unhappy customers IMO. All VZW is doing forcing customers to 4G Android devices, pissing them off and when the device has them at their whits end they go back and get an Apple device that works seamlessly, yes on 3G. Yes that will likely change but VZW is posing a Customer retaliation nightmare IMO, and as an Android fan I don't like to see my friends say their Android device sucked so they went with an iPhone because it works. 3G works, iPhone works, 99% of users want what works.
4G isn't ready and IMO I don't think Apple is ready for 4G. I felt the next iPhone 5 would lack 4G because most of their customers didn't need it and next year it would be added once 4G becomes more mature. I mean really in the past year we have had 2 different 4G SIM variants and a third will be ratified shortly. Why would a company like Apple who makes products that just work want to hop on board with a technology like 4G while still in it's infant stages.
All Apple will need to do is put an HSPA+ radio in the iPhone5 for AT&T keep it 3G on VZW and see what happens. People will flock to the AT&T "4G" network because it works.
Rambling but my 2 cents
43. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)
B/c no new technology is perfect. When it comes to cell phone technology...you don't find the kinks in the armor until a good amount of people get on the network. Its always been that way. So yes, in a sense, you are beta testers but with the intent to fix the bugs before the whole 3G footprint is covered with a technology who's limits have been tested. you're dealing with radio waves...which is wide open to imperfections. My 4G on my bionic (used only for the 4G hotspot) works perfect...but it does cause my phone to heat up quite a bit. Pros & cons. For some reason i don't think an exodus to At&t for HSPA+ would be a likely situation...that's like saying T-Mobile is going to buy out At&t.
54. hsnshw (Posts: 2; Member since: 14 Jun 2012)
AT&T works? Where have you been? HSPA+ is crap.
3. nicholassss (Posts: 341; Member since: 10 May 2012)
Yeah I'm sure its actually just them pushing 4g, Last time I was in talking to someone i told them i didnt care about 4g. once i ruled out 4g it seemed like the push for the iphone was there. But it could have really just ben that salespersons opinion that that was a good phone. who knows,
9. mandkeee (Posts: 78; Member since: 27 Feb 2009)
thats true...account manager came over store and told us that do not sell iphone..
sell 4G LTE device as much as we can..
but customer didnt look at android....
they always lookin for iphone4s
10. JcHnd (Posts: 81; Member since: 30 Apr 2012)
This is actually the first "long" phone arena article that I read... and I agree on it... i don't care if the iphone is being ignored, what interest me is the fact of the 4G revenue... nice move! not for us costumers anyways...
12. Ubi2447 (Posts: 113; Member since: 14 Feb 2012)
Why push to sell a 3g phone on a network that prides it's self on its 4g network?
Not to mention a new versus dated phone. And I'm positive that sales and revenue has a lot to do with it... so what? It's not necessarily a bias based on what [OS] is better than the other.... It's purely sales and quarterly income.
13. Sniggly (Posts: 6199; Member since: 05 Dec 2009)
This is no surprise. 3G data speeds are s**tty on Verizon. I love having LTE. it was Apple's decision not to include an LTE radio.
I mean, they took a year and a half to come up with the 4S. Motorola came up with the RAZR Maxx only a few months later.
If Apple is supposed to be the leader of innovation, why couldn't they come up with the same battery tech that Motorola developed?
They have only themselves to blame.
16. VZWuser76 (Posts: 723; Member since: 04 Mar 2010)
While I agree with you to an extent, saying that the Razr Maxx only took a few months to get out is a little overly simplistic. Basically they had to retool the case slightly and add a larger battery. For them to do that with an iphone would be a much larger undertaking, mainly because of the size of the iphone. The Razr is much taller and wider than the iphone, so there is more room for a battery of that capacity. But trying to fit the same capacity battery in the iphone would probably result in it being double the thickness. The Razr simply has much more real estate to fit a larger battery into. On a 3G iphone it would probably be pointless since by already using a non removable battery they have a larger capacity than most of their contemporaries. But at the time apple was developing the iphone no one had done anything like the Maxx, not even Moto, since they only happened upon it months later. So for them to go ahead with an LTE iphone at that time would've meant much less than a days worth of on time, & you know apple would rather leave it out than have battery performance comparable to a top of the line android phone. In effect they kinda dropped the ball by not coming up with the idea of putting an extended battery in a phone right off the bat. In this case, moto picked up the ball and ran with it. I honestly believe we'll see more phones like the Maxx (super capacity non removable battery coming standard). With the amount of juice LTE draws and the current state of battery tech, it's really the only option if you want more than a day out of your phone. I guess we'll find out what route apple is going to take this fall, but with Verizon saying that the only smartphones released this year and forward on their network must be LTE, they're kinda painting apple into a corner if they want to keep selling phones on big red's network.
20. Sniggly (Posts: 6199; Member since: 05 Dec 2009)
I think you and I agree more than you think. I understand that the Razr Maxx wasn't just a few months' worth of work. I firmly believe it was developed concurrently with the Razr, because the Razr used the same ultra thin battery tech that the Maxx did.
I still stand by my statement that if Apple didn't make an LTE iPhone and is now suffering the consequences, it's their own damn fault. If they're the innovators they claim to be, they would've done what Moto did and come up with an LTE phone with at least decent battery life.
44. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)
Apple not making what we now know as the 4S an LTE device didn't make much sense to the vast majority including myself. So yea, i would say it was Apple's fault that they went 3G rather than LTE as a person from the outside looking in. I'm sure there was a totally different rhyme to Apple's reasons that may have made logical business sense.
45. Mxyzptlk (Posts: 2442; Member since: 21 Apr 2012)
Why don't you do some research before spewing bs. LTE was still in the baby stages then. It was a battery drain and everyone wasn't covered by it.
Motorola will forget about the Razr in a few months like they always do to their other devices.
17. crankyd00d (Posts: 191; Member since: 17 Oct 2011)
Yes good article sir. "what they revealed was...well...revealing" I quite liked that haha
18. sturtevant77 (Posts: 1; Member since: 13 Jun 2012)
I just preordered the Samsung Galaxy S III and although I called in to preorder it the guy was bashing the iPhone. He said he had one but got rid of it for a 4G phone and talked about all the things that are better. He really didn't have to since I was preordering regardless but after reading this article I wonder if there was someone telling him to say those things or at least encouraging selling 4G phones.
19. imsickwithphone (banned) (Posts: 76; Member since: 17 May 2012)
they dont like iphone...
21. Droid_X_Doug (Posts: 4732; Member since: 22 Dec 2010)
I think VZW is just pushing its own differentiator - LTE. AT&T is something like a year behind VZW in rolling out LTE to its customers. Why would VZW not emphasize LTE? If the iPhone doesn't have LTE, that isn't VZW's fault. Note that the VZW sales reps did not push LTE handsets if the prospective customer (CNN plant) specifically stated their preference for an iPhone.
If Apple wants to address this circumstance, all they have to do is release the iPhone 5 with an LTE radio next month. Otherwise, stop whining.
23. Slammer (Posts: 676; Member since: 03 Jun 2010)
I don't think it's a crime for a company to be biased and show a preference in what product to sell. Yet, CNN makes this sound like jail time should be served. Companies need to sell what is more beneficial to their bottom line.
CNN is one of the largest Apple promoters as we see by their reporting in the past.
Owning a business requires some discipline in making profits. Apple's grasp on carriers for pricing, is Apple's problem. CNN needs to realize this. The carriers are doing Apple a favor for offering their products at the cheapest price possible to attract customers. In order for carriers to profit off an Apple device, they would have to boost the out-the-door pricing.
CNN needs to investigate further on how to turn profits rather than act as judge and jury.
24. ibap (Posts: 650; Member since: 09 Sep 2009)
Of course they favor the phones that will make them the most money, both when they sell the phone (or lose the least) and with data fees. What they won't say is that people want speed and accessibility, but the number that really need all that data? Not a huge percentage, but they'll tell you that so they can up their take.
How about a system where your data usage is averaged over a longer time frame? I use way more when I'm travelling, but that isn't that often. Most months I am below 1 GB (using wi-fi when available) and only kick it up when on the road. Data rollover would work well for me - but not for their revenues.
25. saltydog15 (Posts: 11; Member since: 13 Jun 2012)
well gosh, if i have the option to sell a superior product for a similar price and happened to get paid more on commission for the superior product, i am absolutely going to push that product. The customer pays the same amount for their data whether they're using LTE or EVDO. and accessories aside, the sales reps make significantly less money selling the iphone
26. Ruckus (Posts: 276; Member since: 20 Oct 2011)
In the end it's all about the profit margins. I have two friends who work for Verizon including one who Manages a local store. They are strictly told to sell people on their DROID lineup because they'll make more money. They both prefer the iPhone but will never show it at work lol.
28. darn2735 (Posts: 3; Member since: 17 Oct 2011)
As a Verizon employee I will clear this up. It has nothing to do with the phone being 4g or 3g. It has to do with sales commissions. The average comm. on an iPhone is about $10. The average comm. on a Droid whether its 3g or 4g is about $55. So as you can see as a sales person for Verizon if someone is open to phone suggestions you will push the one that makes you the most money. Thats it plain and simple. Apple doesnt share much of the profit with Verizon and in turn Verizon shares next to nothing with it sales associates. Any questions??
29. bubbadoes (Posts: 298; Member since: 03 May 2012)
they probably would prefer non iphone sales and sell you a 300 dollar Android because at the end of the day they have to subsidize a lot more to Apple to sell an iphone in the area of 450 starting with the 16gb version and the subsidies increase to Apple as the iphone size goes up. i find most reps whether its in verizon sprint att walmart radio shack hh gregg try and sell you the phone of their personal preference...not what the organization they are working for is pushing them to offer to customers..
31. darn2735 (Posts: 3; Member since: 17 Oct 2011)
a salesman works for his/her personal gain = what makes him/her the most money, not their preference or the service providers
32. InspectorGadget80 (Posts: 5173; Member since: 26 Mar 2011)
RAZR MAXX IS VERIZON best SELLING PHONE including best battery life. "SIGH IF I WAS ONLY ON VERIZON I would buy the MAXX or wait for the DROID HD.
33. TheRetroReplay (Posts: 227; Member since: 20 Mar 2012)
I talked to a Verizon sales rep and he sorta admitted to it. He said that Verizon is not discouraging people from buying the iPhone, but they're discouraging people from buying 3G devices and it just so happens that the iPhone is lumped into that group. Because Verizon is really pushing for LTE and wanting to get customers on LTE enabled devices.
A lot of Verizon's good phones are LTE and just happen to be Android, the only good 3G device is the iPhone, the iPhone is just a victim of circumstance in this case, if it had LTE it wouldn't be.
Now if the iPhone did have LTE and customers were being discouraged from buying it, then yeah, somethings up.
34. Watchmanz (Posts: 12; Member since: 01 May 2012)
Eventually, everything will be over LTE and the 1X and 3G networks will be switched off, and that's not a great deal of time into the future (VoIP is coming out later this year on VZW). It therefore makes no sense whatsoever to sell 3G phones to customers because they'll rapidly become useless - and then the customers will blame Verizon for selling them a lemon. That's why 4G LTE devices are pushed so hard - people will need them in the near future so why not try and get them into one now, especially when a two year contract is involved.
It's not Verizon's fault that Apple didn't have the brains or marketing intelligence to introduce a 4G LTE iPhone until late 2012. Apple was behind with the play, and that's why their devices are not pushed hard by Verizon (as well as the lack of profit issue).
35. gyovoice (Posts: 1; Member since: 13 Jun 2012)
i have been selling phones 8 8ys now i have sold for ever commapny that has the iphone i can say this apple dose had a good cost for the companys samung for explane the will charge 300$ for there whole sales cost and we will sell for 199.99 with a contact were apple will sell us a smaller not as fast phone for 550$ how dose that make any sconce apple if want your phone to be none bieest give the the companys a better cost that way the mangers verizon ect. dont feel the need to have there sales people sell more doids than apples
36. mobilemike11 (Posts: 16; Member since: 09 Jan 2010)
Reps want to sell 4g because they make more money and VZW doesn't want to sell 3G because they lose too much money! Plain and simple, iPhone sales are discouraged!
37. remixfa (Posts: 13882; Member since: 19 Dec 2008)
LTE phones eat data much faster, which leads to a higher % of people needing bigger data plans which = more money for VZW. Also Android phones have lower subsidies for the most part compared to iphones, which means more money for VZW.
Its not really a surprise. Apple did it to themselves with the price gouging and being lax on getting an LTE/4g phone out there.
39. wsucoug13 (Posts: 164; Member since: 04 May 2012)
Don't really see why this is such a big debate. It is all about money, always has been and always will be. Money dominates everything. Obviously they want to sell what make them more $$$$$ lol. I mean you don't have to be the head cashier at Walmart to know that....
40. RevKBA (Posts: 11; Member since: 29 Dec 2011)
The headline of this article is awfully misleading. Verizon is pushing LTE devices, not discouraging iPhone sales. Have you ever seen a Verizon ad on television? It's completely based on the LTE network. It's about marketing and making money for the company. It's not Verizon's fault that Apple chose not to include an LTE radio in the 4S. You even stated yourself that a Verizon sales associate wouldn't refuse to sell an iPhone. Yes, they're going to explain the benefits of an LTE capable device, but that's their job as a Verizon sales associate. I can't believe that leads to an article making Apple out to be some kind of victim. Wow.
52. Scott_H (Posts: 167; Member since: 28 Oct 2011)
The headline poses a question, how can that be misleading?
55. TheRetroReplay (Posts: 227; Member since: 20 Mar 2012)
Because you made it sound like Verizon is biased against the iPhone when the truth is they're biased against 3G. And other 3G devices include the one WP, Blackberry and some older Android phones they have and are discouraging people from buying because they're not 4G. Your title singles out the iPhone (and not the other 3G devices) and it makes Verizon look bad and makes you look like an iPhone fanboy.
You're titles should be "Does Verizon discourage 3G sales?" because Verizon has more 3G devices than just the iPhone.
57. RevKBA (Posts: 11; Member since: 29 Dec 2011)
Because it's a leading question, Scott. You wanted readers to infer that Verizon sales associates were discouraging people from buying iPhones specifically rather than 3G phones in general. You could have used a title about Verizon pushing LTE rather than something with a negative connotation, but you didn't.
41. bobsbugers (Posts: 1; Member since: 13 Jun 2012)
ok let me just put it out there i know many peoples that worked for verizon for many many years and yes! no one that works at verizon and especlly owns there own store wants to sell or purches a apple device cause of the cost! you make twice as much money selling any other phone then an iphone!.......
42. VZWSalesRep87 (Posts: 1; Member since: 13 Jun 2012)
As the Manager of a Verizon Wireless store myself, for my store anyways, it isn't about discouraging people from buying the iPhone, it's about informing the customer about what Android phones can do comparatively. This mainly happens when people come in and say "I want an iPhone". I respond to them with "Well why do you want an iPhone?", when they say 'I don't know" or "Because it's the iPhone", then I ask if they know anything about Android devices, and if they are willing to hear about them. If they are willing I engage them in informative conversation about Android products.
I firmly believe, that aside from Siri, Android phones do everything the iPhone can do and more, some of them have faster processors, 4g LTE, they are more durable, and they are much more customizable without jailbreaking. If the customer still chooses to buy an iPhone I have absolutely no problem helping them to the fullest of my ability to purchase and set one up.
I don't let my personal opinion get in the way of me selling phones, nor do I let commission figures blind me with pushing the iPhone. Again I cannot speak for every Verizon store, but that's how mine works.
47. crgresham (Posts: 2; Member since: 13 Jun 2012)
along with the Android phones being more customizable, there are more free apps and the apps altogether are better and have more functions. the IOS 6 is just now coming out with a map app with turn by turn gps to macth up to the google map app on android phone. the android phones are better for less the cost, and this coming from a iphone user.
48. Jeradiah3 (Posts: 881; Member since: 11 Feb 2010)
Ive said this for over a year................i dont know why Verizon would put the iPhone 4 and 4S on their outdated 3G network WHEN they've been selling phones on their 4G-LTE network for the same amount of time??
I hope thats a lie because that would be a waste of money for both Verizon and Apple. Verizon has been B&^ching about getting the iPhone for YEARS and now that they have it, they want to limit what it can do by not promoting or selling it?? That would make AT&T look good on the marketing front!! Im not just placing blame on Verizon, Apple is to blame as well because they shouldve put the iPhone on their LTE network!!!!
Im an AT&T customer and I know............had Verizon put the iPhone 4 on thier LTE network (w/ their unltd data plan) it would made Verizon a WHOLE LOT better than AT&T. I wouldve tried the iPhone on their network for at least 2 weeks lol
50. ar2730 (Posts: 38; Member since: 24 May 2012)
I work for an AT&T authorized dealer, and we get paid 3 to 4 more times to sale and android device than we do for an iPhone. We do not make money on an activation or an upgrade of an iPhone device and we have only started to make about $5-$8 on the data feature where as we make between $10-$20 on the activation/upgrade on android/windows/blackberry and we make another $10-$50 off the data feature. Money talks so we have all converted to Android devices to sale them more. Our company just doesn't make the money on iPhones because of Apple's high cost.
51. InspectorGadget80 (Posts: 5173; Member since: 26 Mar 2011)
I also forget to mention. today just sold a DROID RAZR. and a customer gets a 100$ gift card!!
56. d.munch (Posts: 1; Member since: 14 Jun 2012)
But, an LTE iPhone removes all the arguments except that it costs too much to subsidize. The iPhone will shoot to the to of the pile if they come out with a LTE version.
Verizon wants its customers on LTE because they spent a bunch of money on it and it creates satisfied customers.
Regardless of the data speed, the iPhone still causes sticky customers; Verizon HAS to offer it. Just ask T-Mobile how not having the iPhone is working out for them.