Verizon did report a record in the number of iPhones sold in the last quarter, but the picture for Verizon’s profit speaks otherwise.
Verizon sold 4.2 million iPhones in the final quarter of 2011. This number was more than double the number of iPhones Verizon Wireless activated in the previous quarter. This number takes it extremely close to the it’s 11 million target for the year.
According to Fran Shammo, CFO of Verizon Communications
Subsidies for iPhone handsets, when customers sign-up for service contracts increase costs for operators, pressuring margins. Given the volume, we’re probably going to see a 500 to 600 basis point decrease in wireless margins from the fourth quarter from where we exited the third quarter, which was an all-time high of almost 48 percent.
Now that comment had some effect on Verizon’s share prices and it’s shares fell 1.3 percent to US$39.21 at the close of trading in New York yesterday.