AT&T Activates 2.7 Million iPhones in Q1 2010 as Growth Slows

[Bigdaddyguido]

I'd love to see your source that it would cost "millions of dollars" to throw a CDMA chip into a phone. Every other carrier has had no problem doing it, and they don't have near the cash flow Apple has. A few that come to mind include: Palm, RIM, Nokia, Motorola, HTC.

Besides, why would a CDMA carrier switch to GSM when GSM is a dying technology?

You're very misguided.

I dunno if you ever taken a part an electronic device, but they are hardl "thrown" together.

To make an iPhone with a different antennea would require a whole new fabrication plant to stamp put the logic boards, and a new assembly to have the new antennea work on the new logic board.

Apple notoriously keeps their costs at a minimum, opening new assembly lines to appeal to a few million possible users rather than say, putting the same time and effort into expanding the number of markets the gsm is sold in or advertising more effectively in china is not cost effective.

Additionally, CMDA is the archaic technology, hence it being slower and less well designed (audio and data on one connection). This is why AT&T can use mostly software upgrades to advance to LTE while verizon is stuck doing a major overhaul. Fortunately for verizon they put more money towards cell development than AT&T and so should be able to make the switch about as fast of not faster than AT&T. When LTE is a standard, then the iPhone comes to verizon.

 

[tdmac]

You just called a lot of attention to yourself and Im pretty sure theres not much in this post that is right. You know how much revenue Apple could bring in from selling to "a few million" US customers. Think about how much profit margin they rake in on every phone. It would FAR outweigh CDMA development costs. Also, CDMA is just another option than GSM. There really arent that different, they just arent compatible. Both CDMA and GSM are going to be going away pretty soon.

What!!!

Where is GSM going? The 4G that Verizon is moving to is GSM and so is AT&T's. Would require a new chipset I would think to get the higher speeds but not a new standard.

The only way I can see the iPhone coming to Verizon is if the chipset supports both CDMA and GSM. But would the iphone software have to be modified for use on a CDMA network due to its lack of concurrent voice & data?

If the iPhone does come to Verizon, I think AT&T will end up with a more positive overall iphone service rating since they will have been past the growing pains that Verizon will experience handilng the volume of data traffic that the iPhone brings.

 

[MarlboroLite]

You're very misguided.

I dunno if you ever taken a part an electronic device, but they are hardl "thrown" together.

To make an iPhone with a different antennea would require a whole new fabrication plant to stamp put the logic boards, and a new assembly to have the new antennea work on the new logic board.

Apple notoriously keeps their costs at a minimum, opening new assembly lines to appeal to a few million possible users rather than say, putting the same time and effort into expanding the number of markets the gsm is sold in or advertising more effectively in china is not cost effective.

Additionally, CMDA is the archaic technology, hence it being slower and less well designed (audio and data on one connection). This is why AT&T can use mostly software upgrades to advance to LTE while verizon is stuck doing a major overhaul. Fortunately for verizon they put more money towards cell development than AT&T and so should be able to make the switch about as fast of not faster than AT&T. When LTE is a standard, then the iPhone comes to verizon.

You are completely misinformed. LTE is not upgraded GSM. GSM is as archaic as CDMA, and AT&T is not changing over to LTE with a software upgrade.

The iPhone generates A LOT of its revenue in the US as the numbers yesterday prove. Making the phone available to other carriers in the US would be a huge windfall.

 

[NoExpectations]

I'm for competition....

...but I would not move to Verizon or any CDMA service provider (Sprint).

No conucrrent voice/data.
Slower speeds (Verizon max is 3.1Mb, AT&T at 7.2Mb now in many areas).

Why would I take my 7.2Mb capable iPhone and stick it on a slower network and not be able to multitask (voice and data)? The monthly costs better be a lot less for this substandard service.

 

[JonboyDC]

Verizon users may not care if they can't talk and use data at the same time, but I think Apple cares. I don't think they'll sell a phone that has a different user experience on one carrier than it does on another carrier.

I agree that we won't see a Verizon iPhone until Verizon's 4G network is built out enough that it generally matches the geographic scope of AT&T's current 3G network.

 

[JakeTheMac]

Am I missing something?

Didn't Apple say they sold 8.9 Million in there quarter but AT&T activated 2 million....

 

[midwestshooter]

Verizon iPhone

I have ZERO AT&T bars here - and I am 6 miles from the center of a Big Ten campus.

My checkbook has been ready to buy a Verizon iPhone for 2 years now. I have Verizon towers all around me - and I can get a Verizon signal using the fillings in my teeth.

AT&T shows no interest in building towers ... and if anything, they will sell me a microcell at some point - passing off their poor service to my ISP.

I am not surprised that iPhone sales have peaked - and I only wonder how long it will take for Steve to wake up and see the wider potential.

 

[mr.steevo]

Am I missing something?

Didn't Apple say they sold 8.9 Million in there quarter but AT&T activated 2 million....

Hi,

I chalk up the extra sales from Apple due to millions of iPhone toilet drops.

s.

 

[isomorphic]

I am a T-Mobile customer with a G1 (Android). Count me as someone who would instantly buy an iPhone if it were on T-Mobile. I might eventually give in and get the upcoming iPhone--but AT&T still gives me pause.

I had the original iPhone unlocked and hacked to run on T-Mobile. I got tired of fighting with Apple for control over my phone. I sold it for what I paid for it.

I'm sure Apple could care less about the few additional T-Mobile customers that it would gain, but there would be very little engineering and hardware cost in adding the T-Mobile 3G band to the existing phone. This is purely about the financial arrangement Apple has with AT&T.

As soon as what AT&T is paying for exclusivity is less than what Apple thinks it can make in additional sales from multi-carrier, Apple will open up the iPhone.

 

[ipad3g]

well heres my 2 cents. the reason why apple WILL NOT release the iphone on other carriers is because they don't want to flood the market. The US is different from other country's, and apple wants to keep the "exclusiveness" of the iphone. I mean you release it on att verizon sprint and tmobile your done.

Just like the Razr, Nexus one, Palm pre, and many more. I work at a cell phone store and i have never seen any phone sell so much for an ENTIRE YEAR before a new update. Other phones come out and have the hype around it for only 2 to 3 months, then its done, but the iphone is consistent year round.

So what im saying is if apple floods the market with the iphone, it'll be normal, and played out, and over with.

You keep it with one carrier, it'll last a lot longer. AN this at&t report is nothing to worry about at all, obv the new iphone is coming out, what did everyone expect? record breaking numbers?

 

[notromeel]

Am I missing something?

Didn't Apple say they sold 8.9 Million in there quarter but AT&T activated 2 million....

Apple - international. AT&T - U.S. Other 7mil international

 

[eldernorm]

@zacman and others

"And btw. Have a look at the Q1/2009 numbers (because Apple always quotes the 130% increase): It was one of the worst quarter ever for the iPhone because everyone waited for the new iPhone."

Apple is dying I tell you.... Buy a Windows 7 phone instead. Microsoft shares have not moved more than a dollar or two in the last 2 years.... Its solid I tell you.

Forget that Apple says that the last quarter was the best non-holiday quarter EVER,,,,, they are just saying that. We all know that they are dying. Why there is this financial adviser that says to sell Apple stocks right away before they crash..... Yes....



Just a thought,
en........ (long on apple)

 

[RidleyGriff]

People can be so strange with their arguments in here sometimes.

1. Apple iPhone sales have been ramping up, not down. This past quarter (i.e., the quarter after the holiday) was Apple's largest quarter EVER in selling iPhones.

2. This AT&T stat lets us know that fewer people are jumping to AT&T if they are on other carriers. This is likely not only due to Verizon's vigorous anti-AT&T ad campaign, but because customers on other carriers now have alternative devices -- Android -- to provide a similar experience without leaving their network.

3. Apple lost a tick of U.S. marketshare overall even when sales were up because the entire market for smartphones like these is expanding.

Conclusions I take? Apple is taking off like a rocket overseas, but expanding their footprint in the United States is going to be tough if they remain locked to a single carrier (AT&T).

Apple has clearly been hoping to wait until LTE is introduced, so they can stick with their "one phone everywhere" approach, but it has left a big crack open in the U.S. for the adoption of Android. (Yes, I do believe that most Android customers on Verizon would have bought iPhones on Verizon if afforded the choice. No hard data to back this up other than a lot of anecdotal evidence talking to Verizon users and the fact that 80-90% of Android's growth has occurred in the United States. Overseas, when people have a choice, they are picking iPhones.)

The big question is whether Apple will introduce a CDMA model this year, even though it hurts their short term financials, in order to get people involved with the iPhone OS. Verizon customers can still get involved with an iPod Touch -- strangely Android devices don't really counter this with either separate devices or loading their phones up with gigs of storage -- but it seems to me that the day-to-day experience of a phone will leave more of an impression that an iPod with customers. People buying Android phones today are getting locked into 2-year contracts with an Android device. That's a loss of mindshare, and allows Google to tout the Android customer base when courting developers.

Going with Verizon in 2010 seems like a no-brainer to me, but it's the kind of cautious call that Apple is not known for making.

 

[C00rDiNaT0r]

Didn't apple make a custom iPhone model specifically for China when it first went on sales there? If Chinese carrier(s) got Apple to do it, why can't Verizon?

 

[notromeel]

Did you miss the entire part about the SIM card?

Yeah, I did. But doesn't Blackberry have one? And what about this statement, "Expectations for the future include a cell phone market that supports both SIM (GSM) and R-UIM (CDMA) cards by default." ?

 

[Art Mark]

65 million

But how many will buy an iphone? 1 million? 2 million maybe? So Apple would be doing all the tech work to get at a relatively small number of US only users. They may well see double that possible growth in China without making a CDMA phone.
I'd like Apple to be a bit more aggressive, but I imagine they have a well thought out position on it. Maybe tied to future products and access to AT&T.

a couple million? Try like 65+ million. Release a CDMA phone in July-October timeframe, and then another in 2011 w/LTE. Verizon could do voice over data if they wanted to.

 

[donlphi]

Signs of slowing iPhone growth for AT&T are likely to add to the clamor for Apple to extend distribution to additional carriers in the United States, with market leader Verizon having received the most attention in recent years despite the requirement that Apple offer specialized hardware to operate on the carrier's current network.

You know... the slowed "growth" could have something to do with the fact that everybody already has one. Obviously they aren't going to sell slightly upgraded phones every year to the same people because they are stuck in 2 year contracts.

 

[gnasher729]

3. Apple lost a tick of U.S. marketshare overall even when sales were up because the entire market for smartphones like these is expanding.

It's the number of phones that can call themselves "smartphones" that is increasing. In five years time, the cheapest phone that you can buy to carry round in your car in case you break down and need to call help will be a "smartphone".

 

[Art Mark]

well thought out

I agree. I'm sure they are looking at the numbers. As soon as they think it makes sense they will/would.
I also wonder if perhaps, having Android/Google doing well is an OK thing in the long run. It means RIM and MICROSOFT have a VERY difficult environment to try and grow in.
I'd rather see Android and Apple taking market share and MS may, MAY be too far behind to do anything about it.

RIM will stick around, but they have no ability to grow into consumer markets.

I am a T-Mobile customer with a G1 (Android). Count me as someone who would instantly buy an iPhone if it were on T-Mobile. I might eventually give in and get the upcoming iPhone--but AT&T still gives me pause.

I had the original iPhone unlocked and hacked to run on T-Mobile. I got tired of fighting with Apple for control over my phone. I sold it for what I paid for it.

I'm sure Apple could care less about the few additional T-Mobile customers that it would gain, but there would be very little engineering and hardware cost in adding the T-Mobile 3G band to the existing phone. This is purely about the financial arrangement Apple has with AT&T.

As soon as what AT&T is paying for exclusivity is less than what Apple thinks it can make in additional sales from multi-carrier, Apple will open up the iPhone.

 

[SAD*FACED*CLOWN]

I guess Verizon's 91.2+ million users aren't that big a deal. CDMA, although not the global standard, has a huge 2G and 3G footprint in the US. Sprint has nearly 50 million users too. There are definitely more than "a couple of million users".

But on a GLOBAL scale, GSM is the way to mass produce phones. So I understand why Apple went with that standard first.

Just because Verizon has 92 million customers does not mean that all 92 million will buy an iPhone nor does it indicate that they even want an iPhone...with Verizon's dumbed down CDMA I suspect most of that subscriber base uses "dumb phones"....and the one thing that people don't seem to get is that Apple wants AT&T...if Apple lets go of the AT&T partnership who do you suppose will step in to fill those shoes? GOOGLE.....Google wants to partner up with a GSM provider and push units worldwide just like Apple, it should be obvious that Apple is allowing AT&T to stay on the teat just to deny Google access to a major GSM provider...

 

[RidleyGriff]

It's the number of phones that can call themselves "smartphones" that is increasing. In five years time, the cheapest phone that you can buy to carry round in your car in case you break down and need to call help will be a "smartphone".

Very good point. Would be curious to see a breakdown of both the marketshare of "dumbphones" along the same time period, as well as a list of all of the phones that are qualifying as "smartphones" these days.

Still, I don't doubt that there aren't millions of potential U.S. customers Apple is leaving on the table because of AT&T.

 

[segfaultdotorg]

I must need a new stats class. Did not realize that "40%" and "more than one-third" were drastically different numbers.

It will be a slow, sustained decline in the number of new customers for AT&T, and it will fall off a cliff once another carrier gets the iPhone. "More than 1/3" could be 33.4%, which is less than 40%.

 

[C00rDiNaT0r]

But how many will buy an iphone? 1 million? 2 million maybe? So Apple would be doing all the tech work to get at a relatively small number of US only users. They may well see double that possible growth in China without making a CDMA phone.
I'd like Apple to be a bit more aggressive, but I imagine they have a well thought out position on it. Maybe tied to future products and access to AT&T.

Exactly! It's not like everyone already on Verizon wants one. Also, what is Verizon's policy of switching to a new phone before the contract expires? It'd suck if you have to pay for their new ETF..

 

[NoExpectations]

Everyone forgets one thing...

...Apple can only produce so many iPhones. If they are expanding like crazy in the foreign markets, there is no need to sell that many in the US. Therefore, keep ATT exclusive and get as much kickback per iPhone as you can.

If the iPhone wasn't selling so well in the rest of the world, Apple would be 'forced' to open up the US market some more by adding more carriers.

 

[currentinterest]

Perhaps that original report of a 5 year exclusive was correct. If that is the case there will be little that can be done. If that is not the case or was modified, AT&T will be the exclusive carrier at the launch of G4, but a Verizon, etc. phone could be introduced in the fall at about the time of the iPod updates. AT&T would have taken advantage of the surge of new sales upon launch, and Apple would have a holiday multicarrier blockbuster.