Verizon iPhone sales estimation

Discussion in 'iPhone' started by mickman772, Feb 21, 2011.

  1. mickman772 macrumors newbie

    Jun 7, 2010
    Hey all,
    Given how many conflicting reports there are on Verizon iPhone Sales thus far, I wanted to work out how many I believe have been sold given data that is available. I tried to consider or at least mention all possible factors that could influence the numbers that I got, but I would really appreciate any feedback of things I haven't considered.

    There's been a ton of speculation about the level of iPhone sales on Verizon thus far. So I'm going to throw my hat in the ring to come up with a decent analysis estimating sales:

    Chitika Insights has a great tool showing the hits it gets on its ad network from iPhones using a cellular data connection. It shows the percentage from AT&T and Verizon is currently distributed at 93.5% AT&T and 6.5% Verizon. While this is great information, we have to know the current active pool of iPhones in the US in order to get a sales estimate. AT&T does not release how many active iPhones are on their network. However, they do release their activation numbers each quarter with their results. The past eight quarters, iPhone activations on AT&T are stated below (it is important to use AT&T activations and not Apple's iPhone sales which are worldwide):

    2010 Q4: 4.1 million
    2010 Q3: 5.2 million
    2010 Q2: 3.2 million
    2010 Q1: 2.7 million
    2009 Q4: 3.1 million
    2009 Q3: 3.2 million
    2009 Q2: 2.4 million
    2009 Q1: 1.6 million

    2 Year Total: 25.5 million

    Of course some of these phones were returned, canceled, or replaced (by a newer model). I could not find any information to say otherwise, so I'm going to assume that AT&T counts gross activations, as opposed to net activations which would already subtract the returned phones from the total activated. So how many iPhones are returned? As some may remember, during Apple's media event on the iPhone 4 antenna issue, Steve Jobs revealed that early on, 6% of iPhone 3GSs were returned, while 1.7% of iPhone 4s were returned. Assuming return rates stayed constant, I'm going to discount the sales of iPhone 3G (2009 Q1 & Q2) and iPhone 3GS (2009 Q3-2010 Q2) by 6% and the sales of the iPhone 4 (2010 Q3-Present) by 1.7%. I am aware that the previous model phone was sold during these periods, but I am assuming that the new model sales were far larger than the older models. These adjustments bring my new 2 Year Total to 24.37 million iPhones.

    Then there is the difficult task of figuring out how many iPhone 4 purchases were made by customers who had already purchased an iPhone in the prior 6 quarter period. While 77% of first day iPhone 4 purchasers were reported to be existing iPhone owners, those numbers drastically fell as the product moved from early adopters into maturity. In addition, the vast majority of upgrades were coming from iPhones purchased before the 2 Year period we are studying, meaning it would not effect our data. We can also assume that many of those replacing a iPhone 3GS or 2009 Q1 or Q2 purchased iPhone 3G would sell their existing hardware or pass it on to a friend or family member. Therefore, I will assume that these customers have a negligible effect on our analysis. I also am not counting iPhones sold in the current quarter (2011 Q1) considering many are replacing iPhones counted in our analysis.

    Finally, to lessen the concern of investors, AT&T announced that 90% of its iPhone customers are under contract. For analysis purposes, however, this provides us with the little tidbit that 10% of its iPhone customers are out-of-contract, or purchased their iPhone more than 2 Years ago. We're not counting these customers yet, so lets add 10% (or 2.437 million iPhones) to our active count to get 26.807 million iPhones. This will be our estimate for the total active iPhone users on AT&T at the end of 2010.

    With the AT&T iPhone users now representing 93.5% of the US market, this would imply a certain number of Verizon iPhones sold. BUT WAIT! Boy Genius Report, while foolishly extrapolating local retail data to say the Verizon iPhone is barely outselling the AT&T iPhone, points to a statistical gem: 14% of Verizon purchasers are switching from AT&T iPhones. This approximate number has been echoed in several studies and must be considered in our analysis as we are using a percentage of the total active iPhones on AT&T and Verizon. After considering this in our algebra, we get a total of 1.84 million Verizon iPhones active as of February 21st with 825,000 on launch day, February 11th (calculated from the 3% Verizon iPhone Market share recorded on February 11th). Not a bad first couple weeks, considering analysts estimates call for 9-10 million in all of 2011. A new iPhone over the summer would definitely make that a strong possibility
  2. saving107 macrumors 603


    Oct 14, 2007
    San Jose, Ca
    Is their a reason as to why you believe that as a consumer (me) the amount of iPhone 4's that Verizon has been able to sell in the last few weeks would be considered vital information?

    Could it be that your just looking for Page Clicks to your blog?

    I never understood why people on the internet argue with one another over Market Share and Units Sold, Enjoy your phone and let Apple, Google, RIM, Microsoft etc... worry about this information and how to sell more.
  3. mickman772 thread starter macrumors newbie

    Jun 7, 2010
    I don't really keep much of a blog (this is the first and only post there), it was really just a place to post my work, and i reproduced the entire thing here.

    If you don't care about market share or units sold as a consumer, that's fine. In general, people care and argue about this stuff because financial analysts spend a lot of time trying to predict earnings based on sales. In a rational market, these expectations set the stock price before the quarterly announcements, and the stock price adjusts following the official announcements based on whether the analysts over or underestimated sales/margins etc. If you feel strongly that you have a good, unconventional way of estimating sales, than that can be very valuable, especially for a secretive and fast growing company like Apple.

    I posted this here because I've seen the discussions that take place in these forums and I think if I am missing something, or exaggerating a certain part of my analysis, I will be able to hear about it here. That's all.
  4. Apple OC macrumors 68040

    Apple OC

    Oct 14, 2010
    +1 ... nobody outside of Verizon and Apple really care how many iPhones they sell.

    these speculated sales figures will not even do much for the value of Apple stock
  5. rdowns macrumors Penryn


    Jul 11, 2003
    tl, dr

    The fact that we haven't gotten a 1 million sold press release speaks volumes, IMO.
  6. chestvrg macrumors 65816


    Dec 13, 2010
    By far the consensus is that at&t has far sold more iPhones then Verizon, given they have sold the first iPhone since 2007. (no need for sources)

    I think we should give Verizon more time to make a decent comparison. Also note that since the CDMA network doesn't talk & surf at the same time, AT&T is a superior network by far, so we should wait until both networks are on pair (LTE) and make decent comparisons.
  7. JohnnyDoe macrumors newbie

    Mar 16, 2011
    Wow, this is EXACTLY what I was looking for! Thank you.

    I've been looking for an accurate and recent number of active iPhone users in the U.S.. I'm calculating the market size for my iOS venture, which only targets US customers. I searched for hours looking for this data and ended up settling on the number of last years AT&T iPhone sales in the US (15.6M). Your use of activation numbers (15.2M for 2010) is even more accurate.
  8. Bonds79 macrumors 6502

    Oct 4, 2008
    This is old and incorrect info. VZW has sold over a million iphone but the iphone was over 8 months old when i came to vzw, did you really think it was going to sell crazy numbers being over 8 months old + given the fact that a new iphone 5 is only 3 months away?

    Smarten up Dude, use common sense!
  9. Interstella5555 macrumors 603


    Jun 30, 2008
    Exactly. If they were selling massive amounts of phones they would release numbers. It's like a company saying they've "shipped" X number of their product; meaningless without concrete sales numbers.
  10. maflynn Moderator


    Staff Member

    May 3, 2009
    This is telling then the empty verizon stores during the launch
  11. mickman772 thread starter macrumors newbie

    Jun 7, 2010
    The information was old, but not incorrect. At the end of the quarter (March 31 2011) Verizon's market share stood at around 10%. According to my analysis above, but updated to include the market share at the end of the quarter, the model would predict Verizon iPhone sales of 2.3 million in Q1, just above the actual released Verizon data of 2.2 million. So, I think my analysis was valid.

    @JohnnyDoe: Glad to help, but my estimate actually was just under 27 million iPhones active in the United States at the end of 2010 (taking into account early upgraders and older phones still in use). And don't forget all those iPod touches!
  12. kdarling macrumors demi-god


    Jun 9, 2007
    First university coding class = 47 years ago
    I didn't see that you factored in that AT&T counts activations of old iPhones in their totals as well.

    In other words, if you buy+activate a new iPhone, and give your old one to someone who then activates it on their phone number, that counts as two activations... even though it's really only one new sale.

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