Verizon Blindsided By Tardy iPhone 5 Launch? - InformationWeek
Mobile // Mobile Devices
02:52 PM
Eric Zeman
Eric Zeman
Ransomware: Latest Developments & How to Defend Against Them
Nov 01, 2017
Ransomware is one of the fastest growing types of malware, and new breeds that escalate quickly ar ...Read More>>

Verizon Blindsided By Tardy iPhone 5 Launch?

Verizon Wireless blames slower smartphone growth on iPhone 5 not launching in June as expected. But was Verizon legitimately surprised?

Speaking at the Oppenheimer Technology & Communications Conference on Wednesday, Verizon Communications CFO Fran Shammo expressed the company's surprise at the later-than-usual launch of the Apple iPhone 5.

"Obviously we're disappointed that the iPhone 5 didn't come out in June," Shammo said. "We continue to prepare for it and when that comes we'll be ready."

In each year between 2007 and 2010, Apple introduced a new iPhone in either late June or early July. This year, Apple didn't. Apple has provided exactly *zero* information about a new iPhone--if one even exists. Right now, most in the industry believe it will launch in September or October. No one knows for sure. Verizon expected Apple to stick to its typical behavior. Verizon (and everyone else) was mistaken.

Shammo goes further. He blames the iPhone 5's delayed appearance for slower smartphone growth in the company's wireless unit.

"Obviously this will slow our smartphone penetration down from where we thought it would be," he said. "We [hoped we] would end the year around 50% but that will probably delay that for a quarter to the first quarter of next year to hit that target." Verizon expects demand for the iPhone 5 to be bigger than demand for the iPhone 4.

In other words, it is Apple's fault that the percentage of smartphone users on Verizon's network isn't higher. According to its most recent quarterly earnings report, the percentage of smartphone users on Verizon's network is far smaller than AT&T's. AT&T reported that 49.9% of its postpaid subscribers are now using smartphones. Verizon's smartphone usership is much lower at 36%, up from 32% last quarter. The actual numbers, however, show that Verizon isn't that far behind. Verizon has 32.29 million smartphone users compared to AT&T's 34.2 million.

When it comes to iPhones, Verizon Wireless also trailed rival AT&T. Verizon Wireless activated 2.3 million iPhones during the second quarter, compared to 3.6 million activated by AT&T. Together, Verizon Wireless and AT&T accounted for 5.9 million--or about 30%--of Apple's total quarterly iPhone sales.

Honestly, I am not sure what to make of Shammo's comments. He's the one who leaked that Verizon Wireless will have access to the iPhone 5 the same time that AT&T will, and that it probably won't have LTE 4G.

What rings false, however, is the idea here that Verizon is legitimately surprised by the later debut of the iPhone 5. Dan Mead, Verizon Wireless's CEO, said when the company announced the iPhone 4 for Verizon Wireless in January that the company tested the iPhone 4 for a full year before launch. Certainly Verizon Wireless is already testing the next-generation iPhone from Apple. If it is testing the device, it has a general idea of when it might launch. Perhaps Verizon Wireless isn't sharing all the information in its hands with its parent company?

See the latest IT solutions at Interop New York. Learn to leverage business technology innovations--including cloud, virtualization, security, mobility, and data center advances--that cut costs, increase productivity, and drive business value. Save 25% on Flex and Conference Passes or get a Free Expo Pass with code CPFHNY25. It happens in New York City, Oct. 3-7, 2011. Register now.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll