It seems that Thorsten Heins and Steve Ballmer — the chief executives of BlackBerry and Microsoft, respectively — have a friend in Verizon Wireless CEO Dan Mead, who praised both companies‘ mobile efforts during an investor conference earlier today. Before Heins and Ballmer start struttin’ their stuff, however, they might want to consider why Mead is so excited about Windows Phone and BlackBerry 10, because the truth probably begins and ends with the iPhone.
The iPhone line (Verizon sells the iPhone 4, 4S, and 5) accounted for 4 million of the 7.2 million smartphones activated on Verizon’s network last quarter. Despite the number of Android devices shipped each quarter, the relative novelty of Windows Phone devices, and, as Mead put it, customers with a “hunger for the qwerty keyboard” only available on BlackBerry devices, Apple reigned supreme.
This isn’t something unique to last quarter, either. Some 63 percent of the smartphones activated on Verizon’s network during Q4 2012 were iPhones; an increase over the 47 percent average over the previous five quarters. A product line unavailable on Verizon until three years after its debut is now responsible for around half of its smartphone sales, and that’s probably worrisome to the network for a few reasons:
Apple is notoriously hard to work with. Apple considers consumers’ — and its — desires before the carriers’. Verizon (and AT&T, and Sprint, and T-Mobile) isn’t able to install its own services on the device, or prevent customers from using certain features. (For the most part, that is. It did allow AT&T to temporarily block FaceTime calling over the carrier’s LTE network.) This is why Verizon initially passed on the original iPhone.
The iPhone costs more to subsidize than other devices. The iPhone is said to cost carriers more than Android, Windows Phone, and BlackBerry devices due to the subsidy carriers pay in consumers’ stead. (That’s why your iPhone probably cost $199 on a two-year contract instead of $649.) Encouraging consumers to purchase Windows Phone or BlackBerry devices directly affects Verizon Wireless’ bottom line.
It’s “Apple’s iPhone,” not “Verizon’s whatever.” The iPhone hasn’t been exclusive to any one carrier since the iPhone 4 came to Verizon in 2011. Now the device is available from T-Mobile, Walmart, AT&T, Sprint, Verizon, and prepaid carriers. Unlike other smartphones, many of which prominently display the Verizon logo or are exclusive to the carrier in some way, the iPhone is the iPhone, no matter who you buy it from.
“There’s an important opportunity in our industry for [Windows Phone and BlackBerry],” Mead said, adding later that “Three to four operating systems is good for the industry and good for us.” (Note that he’s saying “three to four” while talking up the two also-rans trying to compete with Android and iOS. Here’s to hoping Mead doesn’t give any commencement speeches any time soon.)
Those aren’t the words of a man confident in two hopefuls trying to enter what is currently a two-horse race, whether we like it or not. Those are the words of a man who really doesn’t want to continue relying on the iPhone — and, by extension, Apple — and would rather watch other operating systems and devices replace it.
[Image courtesy cameronparkins]