Verizon can't wait for LTE iPhone

Verizon can't wait for LTE iPhone

Summary: Verizon sold 4.2 million iPhones in the fourth quarter compared to 2.2 million LTE devices. Until Apple has an LTE iPhone Verizon's migration to a more efficient 4G network will be restrained.

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Think you can't wait for a 4G Apple iPhone? Verizon CFO Fran Shammo and other executives probably want one even more.

Verizon's conundrum: It wants to move people to its Long-Term Evolution 4G network because its more efficient than its 3G version in terms of costs. The problem: Verizon moved almost twice as many iPhones than LTE devices in the fourth quarter.

Speaking at a Citi investment conference on Wednesday Shammo said:

We sold more than 4.2 million iPhones in the quarter, which was by far our heaviest quarter to date, almost two times every previous quarter. In addition, we sold over 2.2 million 4G devices, so an extremely strong quarter from a volume perspective.

Those 4G devices include MiFis and dongles.

Also see: CNET: Verizon doubles iPhone sales over last quarter

The catch is that Verizon takes a 500 to 600 basis point margin hit due to the iPhone subsidies. Analysts on Thursday were busy cutting their earnings targets.

That margin pressure equation may change when iPhone launches an LTE iPhone sometime in 2012. Analysts expect the iPhone 5 to be the big revenue driver for Apple in the year ahead. LTE networks are simply more efficient, said Shammo.

With the LTE 4G network we are seeing a lot of products come to market. I think you're going to see a very robust road map coming into 2012 around a lot more smartphones and tablets, additional MiFi cards. So I think the products set around LTE is also one that will generate more revenue. But it also will help with the cost efficiency within Wireless, because every time we add a customer to LTE it is a much more efficient and cost effective network than the 3G network.

The efficiency of that network and the utilization of that and what we see coming in the future from a usage perspective will help us accrete ARPU (average revenue per user).

Topics: Smartphones, Banking, Enterprise Software, Hardware, iPhone, Mobility, Networking, Verizon, Wi-Fi

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23 comments
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  • RE: Verizon can't wait for LTE iPhone

    It's more efficient because it isn't up as much as the 3G network...
    dave@...
    • RE: Verizon can't wait for LTE iPhone

      @dave@... I just got my iPhone 4s with IOS 5.0 and i can not Jailbreak the phone, BTW i just won the phone from here if I remember correctly, getappleproductsforfree(.)com please help me with a tutorial.
      tilian
    • RE: Verizon can't wait for LTE iPhone

      @dave@... Always love CES. Just found this great article for an outstanding solar gadget http://www.forbes.com/sites/jenniferhicks/2012/01/06/solar-powered-kindle-cover-introduced-at-ces/
      sreeseche
  • RE: Verizon can't wait for LTE iPhone

    Ahem, B.S.
    dwhipple
  • RE: Verizon can't wait for LTE iPhone

    I currently have an iPhone 4S and I can state without reservation I will not be getting a first generation LTE iPhone be it an iPhone 5 or whatever they call it. I have no doubt the this first LTE iPhone will have various issues that will not be resolved until a subsequent iPhone 5S or iPhone 6 (which I would consider).
    Zzznorch
  • RE: Verizon can't wait for LTE iPhone

    I thought when the first VZ iPhone came out there were reports that the chip set was compatible with LTE? That was reported form a lot of iPhone crackers right after the phone came out. No, I did not save those reports so can not recall exactly who reported this.

    Here is an idea for VZ, if the LTE network is that much more efficient for them, offer the LTE iPhone to current VZ iPhone users at a very substantial discount. After all VZ wants us off the 3G network so they can save money. And while they are at it, now that we are on a "more efficient" network bring back unlimited data plans on all 4G devises. Where I live air cards or satellite internet are the only two options (I don???t consider dial up an option as I don???t have a land line telephone). So there are some users that truly do need unlimited plans. I for one do not enjoy watching the usage meter all month and deciding if I should or should not use the internet.
    MDrescher@...
    • RE: Verizon can't wait for LTE iPhone

      @MDrescher@... The problem here being the distinct lack of LTE iPhones *rolls eyes*
      Aerowind
    • RE: Verizon can't wait for LTE iPhone

      @MDrescher@...
      Well nothing is THAT efficient (as to justify price breaks ;-) . . . .
      Boltarus
  • RE: Verizon can't wait for LTE iPhone

    4G LTE, are you kidding me? That's not in the real world & won't be for a long time, if ever! I'm lucky if I can get a conection at all where I live. Verizon has the worst customer service of any carrier I've ever had, & how they can be rated by Consumers as better than AT&T, is more a reflection on the reliability of Consumer Reports than anything I can think of. Look at the fees Verizon tried to implement, but rescinded only after comming under fire from customer groups and more importantly, the FCC. Verizon is all about the $ and how to seperate you from as many of them as possible. They are not interested in providing high-speed data where it is needed most, but where it can provide a certain profit margin, period!
    Verizon is as greedy as it gets!
    retmico
    • RE: Verizon can't wait for LTE iPhone

      @retmico <br>Verizon has the worst customer service? Really? Maybe you just have bad people skills. My Verizon Wireless experience over the 11 years has been nothing but stellar. I have been able to take off roaming fees, i got free early upgrades, and got several devices replaced for free. All I had to do was pick up the phone, call customer support and explain my problem. They are always reasonable.<br><br>When a tech support or customer support agent says they can't help me, I say thank you, hang up, and dial again. Once again I talk to them politely and they do whatever I ask them to. If talk to them like an ass hole, or talk to them as if they personally owe them a favor, they wont want to hear it. From my personal experience, only ass holes complain about VZW's customer support. Everyone else seems happy. <br><br>Now, about your service issue. If Verizon doesn't work well in your area, then get your head out of you butt and change carriers. Texas ALONE is twice the size of Germany. The US is a huge country; no single carrier will ever be able to provide good service everywhere. AT&T and T-Mo have terrible service here in NYC. So I use Verizon. It's that simple. I wouldn't go back to AT&T even if you paid me to use them.<br><br> I hated the iphone, I got an android <br>I hated AT&T, I got Verizon <br>I hated my Lexus RX350, I got a Nissan Murano LE <br>Aint capitalism grand? <br><br>About the, "Verizon is all about the $" comment. Well, no **** Sherlock. You cracked the unresolved case of what capitalism is all about. I would have never imagined that a company like Verizon Wireless is about making money. I have a business too. My business is also all about $$$. If you don't like it, go elsewhere.
      solomonshv
      • RE: Verizon can't wait for LTE iPhone

        @solomonshv I agree with you on the Verizon service. Dial *611 or go to a store and get great service. Verizon sends me a snail mail every 3 months telling me whether I could save money by changing plans. I also have gotten early updates on my phone, including an incident where I lost it.

        While I realize that this is definitely a "YMMV" situation, I have had no reason to think about leaving Verizon. At the same time, I have to say that becasue of that I can't comment on whether other carriers are as good or not.

        As to LTE coverage, I drove from San Francisco bay area to Ramona, CA down I5 with my phone acting as a hot spot for my son. We dropped to 3G over the Grapevine (50 miles of mountain pass between northern and southern CA), but he was able to work with his laptop at 4G for most of the trip. I can't comment of LTE outside CA, but it sure is wide spread within our state.
        sbf95070
      • RE: Verizon can't wait for LTE iPhone

        @solomonshv

        Can't agree with you more. Verizon's CS has treated me very well through the years. AT&T who I started out with on the other hand was not flexible. They pretty much told me to find a new carrier if I was unhappy. I did, and thankfully chose Verizon. The reception in areas I have traveled has been great. I wouldn't go back to AT&T if they offered me free service and a free phone.
        staggerlee41
      • RE: Verizon can't wait for LTE iPhone

        @solomonshv I have always had great service in my 17+ years with AT&T so does that mean that only a holes as you put it complain about AT&T? I agree that treating the rep with respect goes a long way but you have to realize that satisfaction will vary from one person to another regardless of their attitude.
        non-biased
  • Once again, Consumer Reports shows they have lost it.

    4G/LTE is still in an early stage with more issues than benefits. It will take 18-24 months for the chipsets to fully mature to make the technology truly mainstream.

    I was amazed Consumer Reports missed that point so handily and the reality is 4G/LTE is not a reason to choose a handset at this point in time. When the WTR1605 transceiver solution is fully deployable (I think sampling just started), LTE can go mainstream.
    Bruizer
    • RE: Verizon can't wait for LTE iPhone

      @Bruizer & @retmico,

      Sorry to hear about your issues with 4G/LTE. The latest device purchase I made was strictly because it IS a 4G device. But as retmico says, you need to live in an area where it is provided. Since I do, that was my main decision for my purchase. I am glad I made the purchase, and know there are many other people out there happy with their purchases.

      It will likely take as long as Bruizer said for it to truly become mainstream. But it is a reality and it is becoming the wave of the future in wireless communications. And that is the reason I chose my handset at this point in time. I wish you guys the best in your wireless search!
      cobb_cruiser
    • RE: Verizon can't wait for LTE iPhone

      @Bruizer 4G is great, and when I get the Nokia Lumia 900 it will be the fastest phone you can get, bar none. The iJunk phone is hurting the cariers more than helping them.
      Stephen-B
  • RE: Verizon can't wait for LTE iPhone

    Mmmmmm... but did you notice there is no mention about how paying more for something that is cheaper for Verizon to run adds value to the customer. Yeah, if you stream audio and video to your phone, it is worth it, but is that really worth the extra cost and gb limits compared to connecting your phone to a home or office wifi network and using 3g/4g when your out and about?
    wldwst
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    trollCall
  • Verizon can't wait for LTE iPhone ... BUT VERIZON CUSTOMERS MIGHT WANT TO!

    LTE is being overly pushed. It reminds me of alternative fuel and a bunch of E85 operators going bankrupt because customers just didn't find the sacrifices for it beneficial, overall, to buy SUVs that use it more than small sedans, of which very few affordable economy cars were/are equipped for alternative fuel. That kind of represents the landscape today. Verizon is seeking to deploy a widescale alternative fuel strategy buy overcharging for the vehicles and the gas. While LTE may be cost efficient for Verizon, it isn't an [b]OPPORTUNITY[/b] cost efficient choice for customers. To buy into LTE only to continue paying Verizon's very expensive rates even though you'd be using Verizon's more cost efficient LTE network, you have to pay a very high amount for what so far have been VERY crappy phones and added paranoia justified by very real poor battery life. These phones are so bad in everyday use, they make me miss my Sanyo feature phone that I used for nearly 3 years until 2006 when I bought my first smartphone. I don't ever remember even having to charge that phone. I know that I did plug it up, but it wasn't every day and hardly ever at all.

    To explore Verizon's LTE endeavor (which does not deserve the 4G label no matter if the ITU b*tched up and relented), I tested the Droid Bionic for two weeks when my wife and I first left Sprint for Verizon, but I eventually settled on the 32GB iPhone 4 before my introductory 14 day period expired. Recently, due to what seemed to be a "better" crop of LTE devices, I decided to test the Droid Razr for two weeks (mid November), HTC Rezound (early December) for two weeks and the Samsung Galaxy Nexus for two weeks (just returned it last week). No matter the device, LTE just isn't an efficient value proposition for the CUSTOMER. I don't see Verizon passing on the efficiency it is experiencing from LTE it back to the customer in the form of reduced monthly costs and definitely not in better utilization of the device's battery. Other than fast data speeds, it's nothing but a Ferrari at a museum, that if always running, causes more problems [b]FOR THE USER[/b] than it solves.


    [quote]"But it also will help with the cost efficiency within Wireless, because every time we add a customer to LTE it is a much more efficient and cost effective network than the 3G network."[/quote]

    Was this statement meant to make overly charged 3G users feel better and more interested in buying an even more expensive device than a new, less expensive 3G device? I don't think Verizon is applying this statement from a consumer's perspective, only from a capitalist's perspective. Sure, I will accept that LTE will be more cost effective than 3G for carriers to operate, but why isn't that already being passed on in savings to LTE users? Outside of having to compensate for the lack of talent in the software programming for its LTE IP framework, it's costing Verizon no more to allow LTE users 4GB of data than it is for it to deliver text messages. The damage of sunk costs is done in deploying 3G and costs should have already been coming down in equipment upgrades and maintenance since it was fully deployed, but costs have only increased while usage has only been whittled down for each new user. That reads BAD MANAGEMENT and good marketing propaganda to keep people flocking to them and paying higher costs. 4 months in, I'm very sorry that I bought Verizon's crap.

    As much as I am feenin' for a more aesthetically appealing Windows Phone on Verizon, any that come with LTE will be ignored. With the Droid Bionic, Droid Razr, Rezound, and Galaxy Nexus, I [b]CONSTANTLY[/b] had to reach for a charger. To top it off, each of those phones was of unique, poor build quality. Three and half years ago, if these devices were released, I'd have stuck with the original HTC Touch??? that I chose over switching to AT&T just to be able to get the first iPhone. I don't blame Verizon for these phones' lack of quality, but for what Verizon offers (just "pipes"), it's charging too damn much in terms of dollars and common sense for admission for the discerning users to even want to be on LTE. In doing my testing and making a final decision to buy and KEEP a device, I factor in the build quality of the devices, the efficiency of the carrier's network in terms of how it affects the [b]user experience[/b], the [b]GREATER[/b] inefficiency that LTE CREATES in the form of horrible battery life, and the expensive up front and recurring costs. For the sake of argument in comparing devices released in the last year, the 3G-equipped HTC Trophy's full retail is $429.99, only $130 more than the CONTRACT cost of the newer LTE devices (which full retail up to $650 or more), and it lasts up to 4 times as long with the same amount of use with little to no drop off in being able to at least use the internet. I don't know about any other Verizon user, but in my experience, LTE is only efficient for VERIZON so far, [b]NOT[/b] for its users. In my four months with Verizon, the thrill of having the "most reliable network" is practically gone. Unless Verizon lowers up front and recurring costs to LTE subscribing customers to reflect that cost efficiency it claims exists in trying to lure users to more expensive devices (or allows truly unlimited data without charging extra to use a device as a mobile hotspot <<<--- why do people have to pay extra for that again?), I will never buy an LTE device from it and will not be renewing my contract should Sprint actually hit a home run with or without LightSquared. Or, I may even look at AT&T come contract expiration time (Sept 2013 for me *sigh*). The competing operators' policies and pricing will affect that war, but it will be a few years before I see the real benefit. Latency is still low on my iPhone and I have no trouble loading web pages. There is no NEED as a user for anyone to rush over to LTE. Verizon has to provide a better value proposition than saying to the world "well, it's cost efficient for us, so that should be enough" while not addressing how low the value proposition is vs. the opportunity cost to the customer (the only "us" that counts). When it comes to "us," it's not enough. Verizon's LTE game is a losing proposition. Regular old E87 octane (3G) will do me just fine.
    trollCall
    • RE: Verizon can't wait for LTE iPhone

      ...
      daffy113