Apple's iPhone 5: Will Verizon get its demand pop this time?

Apple's iPhone 5: Will Verizon get its demand pop this time?

Summary: One analyst says that Verizon will see a lot of pent-up demand for an iPhone 5.

SHARE:

Apple's iPhone 5 will make its debut next week and analysts are busy handicapping whether Verizon Wireless will get the demand pop that never quite came with the iPhone 4.

Piper Jaffray analyst Gene Munster expects a thinner iPhone 5 to debut with a larger screen. The iPhone 4 will become the $99 special. He doesn't expect a low-end iPhone to make a debut.

If those moves happen, Verizon will finally get two flavors of iPhone in its arsenal. At the beginning of the year, Verizon expected a much larger pop from the iPhone, but a delay of the iPhone 5 sunk its plans. Meanwhile, AT&T had a lock on a $49 iPhone 3GS, a device that was used to fend off Verizon handily.

Related: Apple preps Oct. 4 event, iPhone 5 on deck | Verizon's new CEO: Lack of iPhone 5 puts smartphone goal 'a quarter behind'

Here's a look at the last two quarters:

  • AT&T activated 3.6 million iPhones in the second quarter.
  • Verizon activated 2.3 million iPhones in the same quarter.
  • In the first quarter, AT&T also activated 3.6 million iPhones.
  • Verizon activated 2.2 million in the first quarter.

Munster seems to indicate that the dynamics are about to change. He said:

Because the iPhone 4 had been available on other carriers for over 6 months when it launched at Verizon in Feb-11, we believe many Verizon subs have been waiting for the next iPhone. We conducted a small survey of 216 mobile phone users in early Aug-11. Of those Verizon subs who do not have an iPhone but plan to buy an iPhone next, 74% are specifically waiting for the iPhone 5. At AT&T, that same metric is 53%. This pent up demand for the next iPhone at Verizon may drive numbers higher than the 4.4m units we are modeling Apple to sell through Verizon in the Dec. quarter. And our overall iPhone unit estimate of 25.0m in the Dec. quarter may prove to be conservative.

There are wild cards to ponder. For starters, it's unclear whether LTE capability will matter. Will Verizon users want an LTE iPhone? Will iPhone 4 at $99 drive more upgrades than a $199 iPhone 5? And how does Sprint's iPhone affect the equation for Verizon.

In any case, Verizon, AT&T and Sprint will drive a lot of volume. Barclays Capital analyst Ben Reitzes said:

The supply chain seems to be preparing for a strong refresh cycle as our checks indicate that the supply chain is producing well over 30 million iPhone units for C4Q11 – backing our estimate for 30.8 million units. We are upbeat about the next iPhone but we wouldn’t be surprised if we saw the iPhone 4 remain in the line-up at lower price points to fend off the competition. We believe that the potential new model in 2011 will feature a faster processor, an upgraded 8MP camera and be optimized for use with the new iOS 5. New voice recognition software could be a potentially attractive new feature.

Topics: Apple, Hardware, iPhone, Mobility, Smartphones, Verizon

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

24 comments
Log in or register to join the discussion
  • iPhone 5

    In my case, I wasn't going to throw down money at a time a couple of months from the expected release of an improved iPhone. LOL! Still waiting.

    However, anything will be an improvement over my Touch Pro2. The top left quadrant of the screen no longer registers presses. Makes using it... interesting. Also, kind of tired of having vendors charge $5 and more for software selling for $.99 elsewhere.
    OrlandoHatch
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    I guess it will depend on what the Next version of the iPhone has, and if there are any leftover iPhone 4s in stock (at a reduced price).
    Rick_Kl
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    I'm a Verizon customer and can't wait to get an iPhone, but I won't use my upgrade until it is an lte iPhone. Why bother using it for this iPhone comin out if it isn't an lte iPhone when almost assuredly one will be out within the next year. My plan is simple. Gt a new lte iPhone 5, or a used iPhone 4 from a third party. Either way, can't wait to ditch the unstable, unpredictable update cycle that is android...
    aestep1014
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @aestep1014 I agree completely. LTE is broadband and would really enable this devices full capability. However, the FUD emitted by ATT and others about the term 4G may cause many people to not realize what they would be missing with a true 4G network. Cable like speeds and low latency. A true multimedia wireless device without the need to find a wifi hotspot.
      w2pm
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    Verizon will lack in demand because of the change in their data plans, Sprint and ATT have the unlimited data! If i have a powerful phone I want to use it all withoout getting gashed by the data plan cost.
    wallyworld121
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @wallyworld121 Um AT&T hasn't offered an unlimited data plan for about a year now. Only people who have unlimited iPhone data are those who were grandfathered in like me. But you are still throttled after 2 GBs of data.
      Bates_
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    I'm on AT&T so being a 4G/LTE phone doesn't mean squat for me. I am sure the areas that get 4G coverage will be spotty, I like my battery lasting me all day, plus with 4G speeds, I will burn through 2GBs of data and get throttled. So as far as I am concerned right now, they can keep the 4G/LTE capability.
    Bates_
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    Well said, I can afford to pay $299 for an IPhone with a two year agreement, but I refuse to pay $30/month for tier data. I rather buy a new iPod touch or the new Samsung music and continue to use google voice. Verizon is pricing self out of the market.
    JunitoNH
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    I think every one are in for a big surprise, this is just my opinion ok but i think with android smartphone been so powerful the iPhone will not sell like many of you are predicting, as android phones are much more advance then the iPhone (please apple fans do not kill me for saying the true) that people are going to be buying the latest and greatest that android has to offer, but that is just my opinion.
    moises1204
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @moises1204 Which Android phone is outselling the iPhone 4? What is the path for upgrades on Android phones? Will you be able to upgrade Android on any given phone? Or will some be stuck with the shipping OS for the life of the phone?
      Rick_Kl
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @moises1204 Not trying to attack you, but you couldn't be more wrong. Android is buggy, and most devices are limited to their shipping OS version. Since most Android phones are outdated in 2 months because of the influx of Android devices being released every 10 hours, most seem to lose support and reach EOL in record times. I love Android, but I love iOS more, as it is beyond stable, easy to use, smooth, and I don't have to worry about being singled out in updates.

      The "latest and greatest" Android has to offer changes on a weekly basis, while Apple only releases new devices once a year, and they still manage to pull in record sales with old phones.

      Naturally "Android" will sell more then iOS, because iOS is limited to 3-4 devices at a time (not including the iPod Touch or iPad, just talking in a phone sense), while Android gives birth to new phones like a damn rabbit. You may think you have the biggest and baddest Android phone, but don't turn around because you may be slightly disappointed when you learn your "flagship Android" phone has been outdone after a month of being on the market.
      Bates_
      • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

        @Bates_ So true, yet some may not see that. As with any technology product, they seem to become obsolete in a very short period of time. Buying a technology product is like riding a train. When you make the purchase, it is like stepping off the train, it moves on leaving you behind.
        Rick_Kl
      • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

        @Bates_

        I've had an Android device for several years now. What about them is buggy? If you are going to state something like that at least back it up with your personal experiences. Be specific about what is buggy..

        I'm curious. That way i can check out these bugs your talking about myself.
        heathman
        • @heathman

          I too am an avid android user, however, it does have it's glitches that I'd love to know how to stop, such as an operating system that freezes up, the phone gets extremely hot, and the screen jumps around not allowing me to do anything until I put it to sleep and wake it back up again.
          I have the Motorola Bionic, and when I had the original Motorola Droid, I had the same issues. Almost frustrating enough to switch to apple (cough, cough) iphone, but I'd prefer not to be on that band wagon.....
          Any suggestions?
          i lv sw
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @moises1204 Oh the Apple fans will kill you for it even though every metric under the sun shows them its true. Look at the couple that replied to you. They spew the same old crap they read on MacRumors and the like. "Its buggy". "Don't get updates". Yet again every metric shows that with these so called problems Android is outselling the iPhone and has been since like early 2010.

      Which Android phone is outselling the iPhone 4? Well for a while the Thunderbolt was at Verizon. But thats besides the point. For a single Android phone to outsell the iPhone it must overcome an amazing hurdle which has nothing to do with the iPhone. It has to overwhelmingly beat the brakes off of all of the other Android competition. iOS sales are concentrated on the few iPhone models that exist. Android sales are split across many OEMs and models. Yet the Apple fans keep thinking that somehow this single best selling phone argument is worth anything when twice the amount of people are buying Android devices as iPhones. To put that another way....when somebody looks at an Android device and doesn't like it they overwhelmingly choose ANOTHER Android device before choosing an iPhone.

      So to sum it up no Verizon is not going to see any "pop" with the iPhone 5 outside of your normal sales surge. Its just the same marketing crap that gets cranked up every time release time nears for Apple. Theres all this talk about how the next iPhone is going to do this and do that and through each one of these launches you can look at the market share and it remains flat. All these lines out the doors get hyped up when it was discovered that 70% of these people are upgrading. Its a cool tradition and all to line up to get yours but some try to paint this as some amazing demand to help pump stock prices and then go quite on it when that demand falls to relatively nothing when compared to the Android sales rate within only a couple of weeks of the launch.
      storm14k
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    Awesome.,
    GeorgeGallagher
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    This is incredible,
    GeorgeGallagher
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    The "latest and greatest" Android has to offer changes on a weekly basis, while Apple only releases new devices once a year, and they still manage to pull in record sales with old phones.
    GeorgeGallagher
  • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

    My wife wanted an iPhone. I switched her from Verizon to AT&T so I could get her an iPhone 3G. My employer hade me on Sprint with a Blackberry. It wasn't long before I got an iPhone of my own. To tell you the truth AT&T network is horrible. I have an unlimited data plan (I was grandfathered in). I have a micro-cell in my home. My messages come late. While trying to make a call or on a call I get the "Call Failed" message 25% of the time. AT&T reps are great, but they can't fix the network. I have been waiting for two things. 1. My AT&T contract to run low and 2. the new iPhone on Verizon!!! I do not care what changes they made. Apple's iOS 5, iCloud, "It just works" is better than Android's clunky, fragmented, iPhone knock off, and of course Verizon is way better than AT&T.
    itiswhayitis
    • RE: Apple's iPhone 5: Will Verizon get its demand pop this time?

      @itiswhayitis I would say that depends on where you live. I have seen areas that AT&T has better coverage, and in other places Verizon has better coverage. So your milage may vary, depending on where you live.
      Rick_Kl