Apple’s iPhone had another stellar quarter, as Apple reported last night. But as AT&T — the exclusive U.S. iPhone carrier — revealed today, Apple’s international iPhone business is growing far faster than its U.S. business.
This is one reason why Apple should start selling its iPhone through more U.S. carriers, especially Verizon Wireless, the nation’s biggest.
Specifically, while Apple’s overall iPhone business was flat worldwide quarter-over-quarter, it declined quarter-over-quarter in the U.S.
AT&T announced this morning that it activated 2.7 million iPhones last quarter. That’s a big number — don’t get us wrong. But it represents a 13% sequential drop from 3.1 million activations during the December quarter, while Apple’s worldwide iPhone shipments were roughly flat quarter-over-quarter, at 8.752 million.
Similarly, while AT&T’s March quarter iPhone activations grew 69% year-over-year — from 1.6 million in Q1 2009 to 2.7 million in Q1 2010 — Apple’s March quarter worldwide iPhone shipments grew 131% year-over-year. That represents worldwide growth that’s more than twice as fast as U.S.-only growth.
To be sure, some of the lagging U.S. growth is probably seasonal — we imagine that iPhone holiday gift-giving is more of a U.S. phenomenon than a rest-of-world phenomenon. And some of it could be a result of Apple adding more carrier partners in other countries. And some of it could just be that the iPhone business is maturing in the U.S.
But we think a lot of the lagging growth in the U.S. is a result of many peoples’ reluctance to switch to AT&T, the only U.S. iPhone carrier, and stronger competition from other carriers’ rival devices, including impressive Google Android-powered phones and cheap BlackBerry devices.
It’s not just that AT&T has gotten a lousy reputation for its 3G network reliability, it’s also that many customers are on family plans or are otherwise loyal to other carriers, and simply don’t want to switch.
AT&T again said that more than one-third of iPhone activations were to customers who were new to AT&T. (And, again, that’s a good number; likely more “switchers” than any other phone in the world is drawing.) But in context, more than two-thirds of U.S. wireless subscribers are still on carriers other than AT&T. And about half of those non-AT&T customers are Verizon subscribers.
So if Apple really wanted to maximise its U.S. iPhone sales — which, given the platform-land grab-nature of today’s smartphone market, it should want to do — it needs to start adding more carrier partners as soon as its AT&T exclusive is up.
We believe it will do so, including Verizon, potentially as soon as this year.
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