While we are waiting for the new iPhone to come out this year and the prices of the older iPhones to go down, Verizon Wireless is making profit from the older ones. This carrier announced that far more iPhones than expected were activated on its network this quarter. This sales number is drastically higher than the number of smartphones sold this time last year. This might be a good indicator that Apple’s future is brighter than last year.
Verizon Wireless has activated nearly 3.9 million iPhones during Q2 of this year. This is 44% more than last year’s Q2 when they have sold only 2.7 million iPhones. Verizon’s sales of this device came above Wall Street’s estimates of approximately 3.5 million. More than half of Verizon’s activated smartphone devices were iPhones. This is really encouraging for Apple’s earnings report which is scheduled to be announced on July 23. On this earnings call, Apple is expected to announce same equal number of sold iPhones last quarter as it did in Q2 2012. This number could be nothing close to these 44% increased sales by Verizon.
We were able to notice in the past that U.S carriers didn’t have a big part into the overall iPhone sales. In Q1 of this year, Verizon announced that iPhone activations have grown by 25% and Apple said that overall sells grew only by 7%. In April last year, AT&T and Verizon both announced disappointing iPhone sales that fell 24% and 44% respectively, but Apple announced that the sales fell only by 5%. As you can see, the US smartphone market doesn’t reflect as much as it should in overall smartphone sales.
Verizon also said that it has activated 7.5 million smartphone devices during Q2. Nearly a quarter of this number were new Verizon customers. This carrier is nearly done with its 4G rollout which boosted the amount of download data for customers. According to the company, a third of its available devices are supporting the 4G network. This could be a great deal for Verizon as customers are getting used to pay more and more for getting more gigabytes.
Everything isn’t going quite well as it looks. The company announced that its wireless profit margin netted 49.8%. This is up from what they had a year ago but far below Wall Street’s expected results. Kevin Smithen, Macquarie Securities analyst, said that this disappointing margin is due to increased marketing spending during this quarter. This resulted with share decrease for about 2%.
We are about to find out on July 23 how many smartphones were sold by Apple worldwide. It looks like everything is going great for this company and maybe they will finally get close to its biggest competitor Samsung.