Verizon's iPhone Shortfall
2013-07-19 18:03:34
I first read about this last week, and wasn't sure if it was just a rumor. But apparently it's true: Verizon committed to buying a lot of iPhones from Apple back in 2010, and now it looks like their eyes were way bigger than their stomach.
More details here at All Things D
The fact that Paczkowski is reporting this moves it firmly out of "Wow, can that really be true?" territory into "Holy shit! I'm glad I don't have any VZ stock in my 401k" land.
I'm pretty sure that estimating how many phones-- of any brand-- you are going to be able to sell over three years is challenging.
However.
Every time I go into a Verizon store, and I go into them a lot, mostly to buy various Android phones for app development, I see this scenario play out. A normal person comes into the store and says they need a new phone, and they probably want an iPhone. "Oh no," the sales rep intones, "iPhones are old and the new hotness is this Droid. Droid, droid droid. Droidy McDroid. Isn't this Droid awesome? iPhones are shit. Buy the Droid!" It's amazing how often it works. It's all I can do to keep my mouth shut. But I am trying to telepathically scream at the customer: "Run away! You are going to so hate that phone in a month!"
Everybody knows that Verizon has been using their Droid brand of Android to try to drive a wedge between the consumer and the iPhone. The iPhone means the end of the carrier being able to dictate what apps, content, services, software updates, etc are on the consumer's phone. Apple commands high wholesale prices for their devices, and they can't be beaten down and made to sell at razor-thin margins like HTC, Nokia and everybody else. Samsung alone manages to sell smartphones at a profit. So Verizon had to do something, SOMETHING to slow down the iPhone juggernaut.
So they sabotaged sales of the iPhones in their own stores, promoted their own branded devices whenever they could. Guess what, it worked. It worked so well they have come up short on their sales commitment. How can they be surprised?
What if their store sales reps stop pushing the Droid crap, and start actually trying to sell iPhones?