Despite all the anticipation and fanfare, the Verizon iPhone hasn't changed the world. In fact, its introduction this year hasn't even unseated AT&T as the leader for new iPhone activations. Both companies provided first quarter results this week. Verizon announced a healthy demand for iPhones, with 2.2 million activations. But AT&T had even more over the period -- 3.6 million.
AT&T Continues to Dominate
For starters, these numbers don't make for an entirely fair comparison. Verizon only began taking iPhone orders on February 3rd. That gave AT&T a 33-day head start. In the first quarter, AT&T had 90 days to sell iPhones, while Verizon only had 57.
If you take this into account, Verizon was much more competitive with AT&T. If you calculate iPhone activations per day, AT&T averaged 40,000, while Verizon averaged 38,600. So even if you take AT&T's head start into account, its pace of iPhone sales still beat Verizon, but the numbers were pretty close.
On one hand, this might worry AT&T. After all, if all of those iPhone subscribers had been forced to use AT&T instead, its subscriber growth would have been far more robust, though some would likely have opted for a different Verizon-supported smartphone instead. AT&T's iPhone activations actually fell in the first quarter from 4.1 million in the fourth quarter. The carrier is losing some customers to Verizon.
On the other hand, it's pretty impressive that AT&T continued to beat Verizon under the circumstances. Considering that many iPhone owners and wanna-be owners have been dreaming about a Verizon iPhone for years, relatively few actually jumped at the chance to buy one. If the demand for a Verizon iPhone was really that strong, then the company should have easily beaten AT&T in purchases in the first two months the device was available with Verizon.
Will AT&T's Dominance Last?
The Timing Matters
The statistics above don't really provide a complete picture, however. We only know cumulative first quarter sales. It's possible that AT&T's iPhone sales were heavily front-ended and they slowed considerably when Verizon started taking orders in February. To really know whether AT&T remains the leader, you would need monthly iPhone activations.
Even if someone wants to try the Verizon iPhone out, there are several reasons to wait on getting one. For example, the iPhone 4 could become obsolete in June if Apple introduces a new model. Potential Verizon iPhone subscribers might not have wanted to shell out cash for an expensive phone that could be inferior technology in a couple of months. The real test will come when a new version of the iPhone is released for both AT&T and Verizon simultaneously.
The Advantage of Switching Unclear
Although many iPhone users have complained endlessly about their hatred for AT&T's network, initially, there wasn't clear proof that things would be much better with Verizon. Even if the company does have a better network, tens of millions of data-hogging iPhone users could pose a challenge for its network capacity. So far, it appears that Verizon's network performance is a little bit better than AT&T's. But as long as the evidence is cloudy, the motivation for choosing Verizon will remain somewhat weak.
When looking at the first quarter iPhone numbers, AT&T might be cautiously optimistic. It lost its iPhone exclusivity, and the company didn't suddenly collapse. Indeed, it even maintained it dominance. But to keep its position as iPhone users' servicer provider of choice, it must convince new and existing customers that their experience will be better with AT&T.