Apple iPhone Sales Strong, but Fewer Buying Newest Models

Even though Apple experienced a successful fourth quarter with its popular iPhone, “underneath the big numbers at the largest U.S. carriers are signs Apple Inc. faces a rapidly changing marketplace that could erode its dominance,” suggests the Wall Street Journal. It seems that customers are purchasing iPhones at a rapid rate, but aren’t buying newer, more expensive models with the same frequency.

“AT&T Inc. said Thursday it activated 8.6 million iPhones in the fourth quarter, while selling a total of 10.2 million smartphones,” reports the Wall Street Journal. “The popularity of the iPhone at the No. 2 carrier echoed a report this week from market leader Verizon Wireless, which said about two-thirds of the 9.8 million smartphones it activated in the fourth quarter were Apple devices.”

However, Verizon also noted that half of those iPhones were older models offered at discounted prices.

“Dane Scism, a Verizon dealer with nearly 600 stores around the country, said many of his customers settled for the iPhone 4 and iPhone 4S, because they didn’t see a value in paying up for the iPhone 5’s faster cellular connection — one of the new device’s marquee features,” explains the article.

Apple’s strategy allowing carriers to offer older phones at discounts (or for free) has helped get iPhones to more consumers. However, the company is facing increased competition from Samsung, new affordable Android phones and even Microsoft with its Nokia Lumia. Additionally, if other carriers follow T-Mobile’s lead, the subsidizing model may soon change.

“Apple’s success in the U.S. has been driven in part by the willingness of carriers to heavily subsidize sales of its expensive phones,” notes the article. “But under pressure from investors, carriers are increasingly trying to change that.”

No Comments Yet

You can be the first to comment!

Sorry, comments for this entry are closed at this time.