Two in every three smartphones sold by the top three US mobile operators in Q1 related to iPhone activations, according to new analysis by Wireless Intelligence, reflecting the increasing dominance of the iconic Apple device in mature markets.
There were 9 million iPhones sold in the US in the quarter via Verizon Wireless, AT&T and Sprint, accounting for around two-thirds of the estimated 13.5 million total smartphones sold by the three operators in the period.
Although Android devices are now thought to account for over half of all US smartphones in service, the latest figures suggest that users are opting for the Apple device over alternatives in increasing numbers.
This implies that iPhone operators are successfully using the device to pull in subscribers from rival networks and increase their market and value share.
AT&T was responsible for almost half of US iPhone sales (48 percent / 4.3 million) in Q1, which accounted for 78 percent of the US number-two operator’s 5.5 million smartphone sales. Verizon Wireless and Sprint activated 3.2 million and 1.5 million iPhones each, accounting for 51 percent and 76 percent of smartphone sales, respectively, according to Wireless Intelligence calculations.
AT&T offered the iPhone on an exclusive basis for two-and-a-half years until February 2011 when Verizon Wireless launched a version compatible with its CDMA network. Sprint began offering the device in October 2011 (coinciding with the launch of the iPhone 4S), making Q1 2012 its first full quarter of iPhone sales. The US fourth-placed operator, T-Mobile, is not an official iPhone distributor but claims to have around 1 million iPhone users connected to its network.
It is vital that iPhone operators clock up strong sales of the device in order to offset the high subsidies that they must pay to Apple. This was a notable concern around Sprint’s iPhone launch, which was a seen as major gamble by the firm to keep pace with its two larger rivals.
While Sprint’s share of US iPhone sales in Q1 (17 percent) was roughly the same as its overall market share, the firm claims that 44 percent of its 1.5 million iPhone activations related to new subscribers to its network, a proportion significantly higher than either of its two rivals which have both been offering the device for a year or more. This went some way in justifying Sprint’s wireless equipment net subsidy bill of US$1.6 billion in Q1, which increased from US$1.1 billion a year earlier due to iPhone costs.
The total 9 million US iPhone sales in Q1 was below the 13.6 million iPhones sold in the previous quarter (Q4 2011), which included the launch of the iPhone 4S and key holiday shopping season – and contributed to a record 37 million iPhone activations worldwide. In that quarter, the US accounted for 38 percent of total iPhone sales, due to the limited distribution reach of the new iPhone launch, but the country made up just 26 percent of sales in Q1 2012.
This was a result of Apple ramping up iPhone sales efforts in non-US markets during the period, notably in Asia-Pacific where Apple reported a 114 percent year-on-year increase in regional revenue to US$10.2 billion, making it the firm’s second-largest regional market after the Americas (US$13.2 billion).
Apple reported a five-fold increase in iPhone sales in China alone as a result of the Chinese launch in January of the iPhone 4S and a new distributor in third-placed operator China Telecom, but it did not reveal specific Chinese sales figures. It has still yet to secure an official iPhone deal with China Mobile, but the country’s (and world’s) largest operator is thought to have at least 15 million “unofficial” iPhone users on its network.
Global iPhone sales make up over half of Apple’s total revenue, bringing in US$22.7 billion in Q1, and accounting for 58 percent of the firm’s total US$39.2 billion sales in the period.
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Wireless Intelligence is the definitive source of mobile operator data, analysis and forecasts, delivering the most accurate and complete set of industry metrics available. Relied on by a customer base of over 700 of the world’s mobile operators, device vendors, equipment manufacturers and leading financial and consultancy firms, the data set is the most scrutinised in the industry. With over 6 million individual data points – updated daily – the service provides coverage of the performance of all 940 operators and 640 MVNOs across 2,200 networks, 55 groups and 225 countries worldwide.