Verizon Wireless activated 2.2 million CDMA iPhones during the handset’s first eight weeks of availability on the wireless carrier’s network. But only 22 percent of the iPhone activations through the end of March represented new Verizon customers, the company’s executives told investors during a conference call Thursday.
Industry observers were surprised that Verizon’s highly anticipated iPhone launch last February only attracted about 500,000 new customers to the carrier’s wireless network. On the other hand, Verizon’s total iPhone sales exceeded Piper Jaffray’s estimate of 1.5 million for the March quarter.
Overall, Verizon had a very strong quarter of device sales, with 906,000 retail postpaid customers added. “Roughly 60 percent of all phones sold in the quarter were smartphones — up from 36 percent just one year ago,” noted Verizon CFO Francis Shammo. “Sixty-five percent of all smartphone sales were new to the category, meaning they were existing customers with feature phones or new Verizon customers.”
Record iPhone Sales
AT&T enjoyed record iPhone sales in the first quarter of 3.6 million units — despite losing its iPhone exclusivity in the U.S. wireless market. “That’s almost one million more than last year, with 23 percent of these subscribers new to AT&T,” said AT&T Mobility and Consumer Markets CEO Ralph de la Vega. In other words, AT&T gained more than 828,000 new iPhone customers in the quarter versus 500,000 net iPhone customer additions at Verizon.
Furthermore, few of the new subscribers buying an iPhone from Verizon appear to have switched from AT&T. “iPhone churn by itself was the same year over year,” de la Vega said. “And iPhone sales increased, which means we continued to grow our iPhone base.”
Some analysts have attributed AT&T’s stable churn rate to the carrier’s aggressive drive to sign up existing customers to long-term contracts in advance of Verizon’s iPhone launch, but AT&T…
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