Verizon nets 677,000 new wireless subscribers, activates 7.2 million smartphones, 4 million iPhones in Q1
Verizon just announced its Q1 2013 financial results, which reveal positive subscriber numbers and record smartphone penetration. America's largest wireless carrier added 677,000 net …
Context & Ripple Effects
Verizon had already made smartphones central to its subscriber base: its 2012 second-quarter results put smartphone usage at half of wireless customers, following 2.2 million iPhone activations in the first quarter of 2011. Q1 2013’s 7.2 million smartphone activations show that device upgrades, not only net additions, are defining the carrier’s customer relationship.
The 4 million iPhone activations preserve Apple’s importance within Verizon’s device mix, while 677,000 net additions expand the addressable base for mobile data services.
First-order effects
- Verizon adds 677,000 wireless subscribers and moves 7.2 million customers onto smartphones, increasing the share of its base using data-capable devices.
- Apple accounts for 4 million of those activations, reinforcing the iPhone as a major driver of Verizon upgrades.
Second-order effects
- Verizon’s network and device-sales operations must support a larger volume of smartphone data use, while handset vendors compete for the remaining activation volume beyond the iPhone.
- The comparison with smartphones reaching half of Verizon customers in 2012 shifts competitive emphasis from signing first-time wireless users toward retaining and upgrading existing subscribers.
Third-order effects
- If activation volumes remain high as subscriber growth moderates, US wireless competition is likely to hinge more on monetizing smartphone usage than on adding basic wireless lines.
- Apple’s repeated prominence in Verizon activations, from 2011’s first-quarter iPhone rollout to this quarter, points to carrier economics becoming increasingly tied to a small number of flagship device ecosystems.
The trend: US wireless carriers are moving from subscriber-acquisition growth toward an upgrade-driven model built around smartphone penetration and mobile-data use.