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Verizon's record iPhone sales in Q4 have lowered its profit margins, Apple might have moved 35 million in total

Posted: , by Daniel P.

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Verizon's record iPhone sales in Q4 have lowered its profit margins, Apple might have moved 35 million in total
Analysts believed that Verizon's mentioned record 4.2 million iPhones sold yesterday, will be affecting its profit margins for the last quarter in a negative way, and the carrier confirmed that suspicion. 

We know that the iPhone is the most heavily susidized phone by carriers, to the tune of $400+ per unit, which brings in Apple's fat profit margins. Therefore it isn't rocket science to conclude that the more iPhones sold for the sake of Androids and others, where Verizon subsidizes less, the bigger the carrier's total expenses, hence smaller profits.

On the other hand, after Verizon mentioned its record iPhone sales, analysts started adjusting their Apple predictions for the quarter, which were around the 30 million ballpark before. Now Maynard Um from UBS is saying Cupertino might have moved 35 million iPhones in the holiday quarter, which would be an impressive record, and only Samsung has the chance to be around that number. 

He also says the expectations are for AT&T to have sold 8 million Apple handsets, with Sprint tacking on another 1.2 million.

source: WSJ & AppleInsider

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posted on 05 Jan 2012, 07:38 8

1. Slammer (Posts: 1515; Member since: 03 Jun 2010)

This will eventually get old. No doubt that obtaining the iPhone is a great business move. However, once the Apple market peaks, it will only be a matter of time that carriers will put the squeeze on Apple such as US Cellular.

No business enjoys operating losses. Gaining subs is great, but not at the expense of losing money through slim profit margins. If losses are continual, it will be passed to consumers. Also not a popular move.

Apple will eventually realize that their devices are no good without carrier network service.

John B.

posted on 05 Jan 2012, 08:14 3

2. SuperAndroidEvo (Posts: 4888; Member since: 15 Apr 2011)

Hey let’s hope this happens sooner than later. Verizon Wireless is very expensive. I really don't want to pay any more!

posted on 05 Jan 2012, 08:39 5

4. Tux4g63 (Posts: 120; Member since: 21 Oct 2011)

You could literally look at this news article and connect the dots to realize that every carrier which had customer loyalty and incentive programs had to can them specifically because of the iphone. Even the unlimited data for your smartphone carrier Sprint had to do away with their premier program that gave annual upgrades. And Verizon did away with its new every two program and annual upgrade program also. Because they have to make money also, the $$ they had to spend to pay Apple is directly effecting customers and the services that carriers were able to offer/will offer in the future. In the end it really feels like customers have lost out simply because Apple specifically said we will charge our price on our phone to anyone, regardless of what might actually be good for the greater customer base and potential loyalty moves on behalf of new consumers down the road.

posted on 05 Jan 2012, 08:56 2

5. solidsnakeduds013 (Posts: 219; Member since: 20 Oct 2010)

Switch to tmobile

posted on 05 Jan 2012, 08:34 5

3. DROIDX0430 (Posts: 469; Member since: 24 Nov 2010)

Yeah, that iphone rip off is why VW charges $300 for supposed to be high-end Android phones.....some comparable models are up to $200.00 cheaper on other carriers. Look at the Infuse, Focus and Atrix on ATT....they are respectively .01, $99 and $49.00. If they were on VW, they would be $299.00, $249.00 and $199.00.. VW doesn't even offer a subsidized price anymore..For instance the RAZR or NEXUS is $649.00 MSRP. You get the phone for $300.00 You are locked in a two year contract for 24 months....So they give you a discount of $349.00 in 24 months. That's 14.00 bucks a month over 24 months....and they act as though they are giving you a break with the 4GB of data promotion for $30.00, when up until a couple of months ago---the same plan was unlimited and $29.99...just my take. I want be buying into anymore two years contracts. I will just buy it straight out......oh and by the way, the iphone4S is $649.00 MSRP, and you get it @ $199.00 on VW because the iphone sales are riding on the backs of overpriced Android phones

posted on 05 Jan 2012, 11:31 1

7. jcoberg10 (Posts: 112; Member since: 30 Oct 2009)

You are semi correct. However you can't compare the price point of a 3g 16gb iphone 4s with an Android 32GB 4G phone. Not saying the pricing on the top of the line android phones is fair or correct, but if your going to compare at least try to compare fairly. Iphone 3G 32GB $300, Android 4G 32GB $300. Or Android 16GB 3G $200 , Iphone 3g 16GB $200

posted on 05 Jan 2012, 12:05 6

8. DROIDX0430 (Posts: 469; Member since: 24 Nov 2010)

semi correct---No totally correct... I am not going to compare iphone4S to any version to Android-because there is no comparison----would be unfair to iphone--I am comparing MSRP over the fact that a 16gb iphone4S MSRP is $649.00--with a subsidized price of $199.00--Any Android phone LTE with a MSRP of $649 (i.e Nexus, Razr is listed at $299.00 respectively. So yes, the 16gb iphone4S is riding on the back of Android sales....The 32gb iphone iphone is $749 and $849 for 64 gigs...go figure...#7

posted on 05 Jan 2012, 11:20 6

6. PAPINYC (banned) (Posts: 2315; Member since: 30 Jul 2011)

Chalk it up to yet another iScAm.

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