The tandem of Apple and Verizon seems to be working wonders for the telecommunications firm as well as technology giant.
According to Fran Shammo, the Chief Financial Officer of Verizon, they have sold 4.2 million iPhones in the fourth quarter of 2011. This figure is double the number of iPhone sales from the previous quarter.
Though Verizon is not the lone distributor of iPhone in the U.S., they still consider it as an asset for convincing individuals, who have basic phones, to upgrade to an iPhone and pricier data plan. The company is only one of three carriers distributing the said smartphone in the country.
The sales boom is attributed to the release of the iPhone 4S last October. Before the launch of its latest device, Apple’s sales figures were not optimistic since consumers decided to hold on to their money in the event that the company releases their latest iPhone model. Verizon said that they have at least 120,000 of undelivered iPhone 4S orders.
If we add the back log and the sales of all iPhones for 2011, Verizon said that it sold nearly 11 million units of the smartphone the previous year.
The problem with sky rocketing iPhone sales is that the more it sells, the higher the payment of subsidy increases. This goes the same with all the carriers offering the iPhone to its customers. These said companies have to pay Apple just to keep it priced at $199. The Verizon CFO said that it lessens gross margin by 500 to 600 points.
