Verizon Q4 2011 defined by iPhone

Verizon on Tuesday posted a rare loss for its fall quarter despite an otherwise upbeat result defined by the iPhone. It lost 71 cents per share through pension compensation but had its best subscriber additions in three years, adding a net 1.5 million new customers. Having shipped 4.2 million iPhones, the credit could go primarily to Apple for the record performance.

As mentioned previously by the CFO, 2.2 million LTE phones, hotspots, and tablets had been switched on in the fall, suggesting that the Droid RAZR, Galaxy Nexus, and the rest of 4G Android line combined moved fewer devices than just Apple.

A total of 7.7 million smartphones had been sold in the season, making the iPhone 54 percent of Verizon's entire smartphone base. Verizon has 108.7 million total cellphone users.

The discrepancy between net adds and total smartphone additions came partly from losing nearly a half-million telematics customers behind the scenes. Turnover of old customers for new improved significantly over last year and was down to 0.94 percent, suggesting that the iPhone and newer LTE phones were keeping customers loyal. The ratio of smartphones on the network climbed from 39 percent this summer to 44 percent by the fall.

Adding so many devices did temporarily impact the carrier's profit margin on cellphone users, but Verizon considered it worth the revenue and the long-term effect.

AT&T and Sprint have yet to weigh in on their own late 2011 results but are expected to see a similar pattern of strong iPhone sales through the iPhone 4S launch that might impact their profit margins but could lean to significantly more people on smartphone plans.

By Electronista Staff

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