Once upon a time, Verizon Communications Inc. (NYSE:VZ) was predominantly a Google Inc (NASDAQ:GOOG) Android carrier. Big Red’s popular Droid marketing campaign was a quite successful in driving Android adoption, making the company one of Google’s most important Android carrier partners. Some of the early Droid commercials even bashed Apple Inc. (NASDAQ:AAPL)‘s iPhone, prior to the company becoming an official iPhone carrier. These days, the iPhone is taking over Verizon.
The most iPhones we’ve ever activated
More importantly, this is the first time that the iPhone has comprised the majority of smartphone activations at Verizon, topping the important 50% threshold.
| Metric | Q3 2012 | Q4 2012 |
|---|---|---|
| Total smartphone activations | 6.8 million | 9.8 million |
| iPhone activations | 3.1 million | 6.2 million |
| iPhone percentage of total | 46% | 63% |
Source: Conference calls.
That’s a big sequential boost in the iPhone’s percentage of total smartphones, thanks in part to the launch of the iPhone 5. Verizon said roughly half of those were the newest LTE-equipped iPhone 5, which shows that older models are still selling well at lower price points.
This is the most iPhones that Verizon has ever activated by a healthy margin. The prior record was Q4 2011 when Big Red activated 4.3 million iPhones.
Domestic digits
Rival AT&T Inc. (NYSE:T) has yet to report official earnings figures, which are due on Thursday. However, Ma Bell did already tell investors that it activated 10.2 million smartphones during the fourth quarter, including the “best-ever quarterly sales of Android and Apple smartphones.” Its prior iPhone record was 7.6 million, so that means that Apple has sold at least 13.8 million iPhones between AT&T and Verizon during the fourth quarter.
It’s also quite possible that AT&T, which has always been predominantly an iPhone carrier, also saw a big sequential jump in the iPhone’s percentage of total smartphone activations. If it reached 80% like it did during Q4 2011, then that would represent close to 8.2 million iPhone activations.
Taking it a step further, let’s give Sprint Nextel Corporation (NYSE:S) the benefit of the doubt and say it sold roughly 2 million iPhones in the fourth quarter, slightly higher than the record 1.8 million units that it activated a year ago. That could bring Apple’s domestic total up to around 16.4 million iPhones.
Some numbers games
There are a few ways we can parse this data.
If we look at Verizon’s typical contribution to total iPhone units, Big Red has averaged 11% of total iPhone units ever since first getting the device seven quarters ago. That’s the method that Topeka Capital analyst Brian White is using to suggest that Apple could have sold up to 56 million iPhones during the fourth quarter — a healthy beat relative to the roughly 50 million that the Street is expecting.
