iPhone Activations Drop 43% at AT&T, But Represent 60% of Total Postpaid Phone Sales

[shawnce]

AT&T iPhone "activations" down 43%, but Verizon's were down only 25%. I wonder why?

At the time (last quarter) a lot of pent-up demand for the iPhone 4S and AT&T to-date still has the most long time iPhone user base so AT&T saw a large bump in sales in that quarter. The drops from last quarter to this isn't that surprising given the product life cycle realities and it still looks like we will see a double digit percentage increase from year ago quarter.

It is likely that the US is somewhat approaching a saturation point given the state of the economy so iPhones sales are feeling cyclic upgrades by new or returning customers more then in the past... however I believe a reasonable amount of growth still existing given how many "dumb" phones are still selling in the US.

This quarter is in a lull between product releases across almost all of Apple products so I expect it to be a low quarter in general... nothing really to be worried about long term at this time.

Oh yeah and I forgot the prior quarter was one week longer then normal so it consumed some of this quarters numbers.


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LMAO. Really?

Well when you look at the raw numbers and performance trends then compare them to other companies in the tech industry (or even outside of that industry) you could actually say that Apple is under valued if you attempted to connect the dots.


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once this happens the next cycle is commoditization and a price war. see computers around 2000

Apple has done a fairly good job of avoiding the bargain basement communization in desktop and laptop computers compared to the rest of the industry... can they do it again with phones? who knows... but of anyone in the industry they are the ones mostly like to be able to keep margins high (the so far have done so with desktops, laptops, iPods, etc.)

 

[shawnce]

.

 

[coder12]

I'm interested in this -- does anybody else think it represents the impact of economic problems on the US? Or is it really about competition (which I don't really believe)?

The U.S. is supposedly in a session of prosperity. These problems are coming from, as many others have stated, market saturation and upgrade restrictions.

 

[Rogifan]

Q1 2011 had an extra week in it (14 instead of 13). So, the year over year totals improving from 5.8million units to 7.5million (29.3% increase) is better than it looks (and it looks good).

so AT&T activated 1M more iphones this quarter compared to this quarter last year even though last year contained an extra week?

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Investors are concerned that iPhone sales have not kept pace with the rise in the stock price. The stock has risen 62% in the last year, yet AT&T iPhone sales have only risen 19% when compared to the same quarter last year. It's not unreasonable to expect a slight correction as a result of these sales figures. We'll have to wait a few more hours though for the whole picture to be revealed.

And who's fault is it the stock has gone up so much the last year. The same ones predicting $1000 stock price and $1T market cap. I swear investors are shorting the stock now so they can run it up again later in the year.

 

[needfx]

Doubtful. The March quarter historically results in lower revenue for Apple.

The quarter-to-quarter comparison is pretty useless due to the cyclical nature of consumer spending habits, particularly after the holiday (December) quarter. A year-over-year comparison is more meaningful.

sounds reasonable enough

 

[Tarzanman]

I have a different theory for the reduction in the number of activations.

Cheap tablets.

If you are now dropping $200-$500 on a tablet, then there will be less of an itch to upgrade your smartphone yearly, or even every two years because the function/purpose of the devices overlap quite a bit.

Do you really need a retina display iphone 4/4S if you just got an iPad 3, or even a kindle fire?

 

[Thunderbyte]

This article is clearly drawing the wrong conclusions out of the data and is therefore worthless.

As fortunately many posters have seen:
1. Xmas Q is always stronger.
2. 4S came out in Q4-2011 !!
3. There is a decent UP from Q1 last year (~700.000 more iPhones sold!)

So really: forget this article. Bad enough that Macrumors didn't draw these conclusions themselves.

 

[skellener]

Just waiting for the LTE iPhone (Oct/Nov) and I will bail on AT&T. Three years of awful 3G service is enough. I'll take any other carrier at this point.

 

[foodog]

Geez those sales suck. Probably has something to do with how few new features were unveiled with the 4S.

Most companies in the world would love to have sales figures this bad

 

[Raftysworld]

Oh my god guys, relax. Yes, the year-over-year sales numbers were better, so obviously this is not something to panic about. BUT, the previous quarter was so astoundingly good that many investors were probably hoping to see the positive momentum sustained a little more strongly this quarter. But the dropoff was quite large, and thats at least a little bit of a reason to be nervous. Q1 was only a few months removed from the 4S launch, afterall.

 

[Winni]

The U.S. is supposedly in a session of prosperity. These problems are coming from, as many others have stated, market saturation and upgrade restrictions.

Which is a big problem for Apple. There's a huge world outside the US borders where people either cannot or simply do not want to spend that much money on expensive tech toys as most US-Americans obviously do. Since Apple does not want to enter the market "for the rest of us", their is a natural ceiling to their growth.

 

[Genetheninja]

maybe the drop in sales is in anticipation of the next gen iPhone

That and the fact that most people already HAVE an iPhone so it's just people either switching or waiting for the next upgrade.

For instance. I have an iPhone 4 but didn't buy the 4S because I couldn't justify the upgrade. That and people aren't out of contract yet.

 

[Moonjumper]

Bubble? Correction? It was still one of the most undervalued stocks on the market.

Apple stock has recently risen much faster than usual, and then dropped a little. I was referring to a small bubble and correction within a longer term trend upwards.

I was refuting the "already-weakened" term used which makes it sound as if Apple is in trouble on the market, when that is very far from the case.

 

[X86BSD]

F#$% at&t!

I just finally was able to unlock my 3GS now that those greedy pigs at AT&T are unlocking them and I dumped them to go to T-Mobile. I was paying those greedy pigs at AT&T $100/mo for 450 minutes, unlimited texts and "unlimited" 2GB data.
Now I pay $50/mo for unlimited talk, text, and web. Granted it's on EDGE now with T-Mobile but I could care less. It saves me $50! a month! $600/year! EFF YOU AT&T! I hope you greedy pigs choke on your own cash piles. I will NEVER come back. I replaced the 3G i am missing on my phone by dropping AT&T with a new iPad with Verizon @ $20/mo for 4G and 1GB. And I still come out ahead! Die you over priced greedy pigs! I imagine I am not alone as T-Mobile is getting more and more iphone owners switching. It's simply about price for most of us.

 

[Meandmunch]

Only the foolish would tell a tech company to rush a product out the door.

Plus, we're talking about Apple. They work on their own timetable.

Take your time, Apple. Get it right.

Your calling the consumer base as a whole foolish? Maybe this is just an anomaly but if sales are indeed dipping those "fools" as you put it are slowly going to loose interest in a piece of tech a year and half old. Meanwhile new competitor phones are released almost weekly in a variety of form factors flooding the market with many glossy alternatives.

I love Apple and my iPhone to death but the truth is going two years on the same device was a bit of a gamble. It's paid of tremendously so far but we will see just how long Apple could ride that single device without an update.

 

[Rogifan]

Your calling the consumer base as a whole foolish? Maybe this is just an anomaly but if sales are indeed dipping those "fools" as you put it are slowly going to loose interest in a piece of tech a year and half old. Meanwhile new competitor phones are released almost weekly in a variety of form factors flooding the market with many glossy alternatives.

I love Apple and my iPhone to death but the truth is going two years on the same device was a bit of a gamble. It's paid of tremendously so far but we will see just how long Apple could ride that single device without an update.

It's not the same device. Just b/c the hardware look and feel didn't change between 4 and 4S doesn't mean the technology inside didn't change.

 

[Meandmunch]

It's not the same device. Just b/c the hardware look and feel didn't change between 4 and 4S doesn't mean the technology inside didn't change.

You've got to be kidding me, drop the fanboy routine for ten seconds and use your head. I am admittedly one the of the biggest fanboys, been a member here for a decade.

Joe average is a completely superficial consumer, on the surface they see the exact same phone. Ask them what the S stands for they either say Siri or Speed. It comes in black and white, it is an iPhone nothing more to them. They care about the form factor alone and metrics like "Mega pixel" barely register. Siri is the center piece of there marketing for the 4S and it's just a bit of software, it's really the only thing that distinguishes it from the 4.

So spare me when you say its not the same phone. You and I know that "technically" but 99% percent of them do not.

 

[ftaok]

Android dropped 33% at AT&T

By my calculations, this article could have also been written as Android sales drop 33% at AT&T. Sure, it's not as bad as a 43% drop, but then you have to look at the fact that there's always a few brand new Android models available, whereas the iPhone just gets older until the new model is intro'd.

Incidentally, the Android drop-off at Verizon wasn't nearly as bad. iPhone dropped 26%, while Android dropped 9%.

Anyways, the point is that these numbers are interesting, but they don't tell much of a story. Everyone drops off after the holiday quarter. Perhaps this year's drop off is more pronounced than most years, but that's just a function of the "late" intro of the 4S last year. There's nothing much to see here.

NOTE - these numbers are most likely a little off as I counted any non-iPhone smartphone as an Android phone. I didn't take Blackberry or WP7 into account.

 

[brywalker]

The downturn in iPhone sales on AT&T is due to the company pushing reps to sell alternate smartphones due to the amount of subsidy they pay apple.

 

[Rogifan]

The downturn in iPhone sales on AT&T is due to the company pushing reps to sell alternate smartphones due to the amount of subsidy they pay apple.

I didn't experience that the last time I was at AT&T. Source?

 

[ftaok]

I didn't experience that the last time I was at AT&T. Source?

Well, if they are pushing Android phones, they're doing a lousy job at it. They went from selling 1.8 million Android+others in Sept-Dec'11 to selling 1.2 million in Jan-Mar'12.

As I pointed out above, that's a 33% drop. But you won't see that reported anywhere. They'll frame the data using the year-to-year increase, not the quarter-to-quarter drop.

 

[John IV]

How is this comparing with what android is doing during the same time period?

While looking for this info I found this interesting bit of info.

http://news.softpedia.com/news/5-000-Malicious-Android-Apps-Identified-in-Q1-2012-265298.shtml

This link scared me. I have a cousin who just bought a Droid. This is why I only use the Apple app store for macs. (I don't as yet have a mobile device.)

 

[NeroAZ]

That's because only a few loudmouth data hogs are making all the noise about capped plans. It's a non-issue with 99% of users.

it's an issue. with att not just removing reduced, but switching around what tiers they have.

I had unlimited, but needed to be able to tether, so I lost my unlimited. not a big deal. then eventually got rid of tethering, went to 2gb plan for $25/mo. then added tethering again for a while, and then only had option of 3gb for $30 when I no longer needed tethering. i rarely use more than 1gb on my phone alone. I should be able to get 1gb for $20 like on my verizon iPad.

point is data plans are ridiculously priced.

once my iPhone 4 att contract is up in june (I bought mine first day) I may even get rid of it all together. I rarely use it to talk, and use my iPad way for anyway.

 

[tshrimp]

This link scared me. I have a cousin who just bought a Droid. This is why I only use the Apple app store for macs. (I don't as yet have a mobile device.)

I have a company issued Android device, and actually kind of like it. With the freedom to install anything you want can come at a price sometimes.

 

[ixodes]

Rapidly approaching two years now with essentially the same iPhone, (4/4S) it's been reliable, popular, and an excellent phone for the average consumer. Therefore it's likely they have little, or no desire to replace it.

Given the state of the economy, and the fact that there's a lot of nice new cars available at great prices, many may be replacing the cars they held onto longer than before.

Not everyone is as eager to get a new phone, as those of us who are Apple using tech people. Nor do they obsess over every little improvement Apple makes, especially with the current models being so good.