Verizon announced on Thursday, July 18, that iPhone activations were 51% or about 3.8 million of its 7.5 million smartphone activations. Myself and a number of Wall Street analysts ran the numbers and saw that iPhone activations had increased about 41% year over year and were only down 5% quarter over quarter, which was better than anticipated. Note that my family and I own
I believe most analysts were expecting iPhone sales and activations to be flat to maybe up 10% year over year so a 41% increase at Verizon could be read positively. It also meant that Verizon would account for over 14% of iPhone sales vs. the typical 10% to 12% range.
Keep in mind that while a “read” on 10% of a business is better than not having it too much could be assumed. Probably the biggest caveat with Verizon’s iPhone results is that the iPhone 4 became available on its network on February 10, 2011. This means that customers who bought the 4 from that date until the end of June 2011 (approximately 4.5 million customers) would be eligible to upgrade to an iPhone 5 for no charge.
It would only take 1 million or about 22% of the 4.5 million iPhone 4 customers to upgrade and change the growth rates and percentage of Verizon iPhones to be in-line with expectations and historical ratios.
There are other indications that iPhone sales are going well ranging from T-Mobile selling 500,000 iPhones in the first four weeks and increased promotions in India paying off. So for now (and it is only until Tuesday afternoon when we will know) I’m sticking with my 26.4 million iPhone estimate which is a 2% increase year over year when adjusted for channel inventory changes.
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