An oversaturated market could spell big trouble for the nation’s largest wireless provider this year. While looking through an obscure securities filing, two analysts have come to the conclusion that Verizon will fall well short of estimated sales they promised to fulfill as part of a multiyear deal they signed with Apple in 2010.
According to analyst Craig Moffett of Moffett Research LLC, Verizon is obligated to sell $23.5 billion worth of iPhones this year. That’s more than twice the number of iPhones that Verizon sold in 2012 which means the company could come up short by $12 to $14 billion.
Nomura analyst Stuart Jeffrey essentially echoes those same sentiments. Jeffrey estimates that Verizon sold just 7.2 million iPhones during the first quarter of 2013 and will sell another 10.8 million units during the second half of this year. Based on his calculations, that leaves some 19 million unsold units at a value of around $12 billion.
All of this, of course, is assuming that Verizon agreed to receive and pay for that many phones in their agreement – something we are unsure of at this hour.
Either way, that’s a lot of unsold iPhones but the real question is, what is causing so many handsets to go unsold. As it turns out, there could be a number of factors leading to a slowdown of sales including the aforementioned saturated market, stiff competition from the likes of Samsung and the fact that several carriers now offer the iPhone (that wasn’t the case back in 2010).
The Apple iPhone 5 is the latest flagship smartphone from Apple. The iPhone 5 features a 4-inch display retains the same 326 PPI density as its predecessor with an effective resolution of 1,126 x 640, and a new Lightning connector. The new handset now features 802.11a/b/g/n Wi-Fi with 802.11n supporting dual-band 2.4GHz and 5GHz frequencies. Bluetooth 4.0 is back in addition to GPS and GLONASS for location services.
The iPhone 4S looks identical to last year's model but comes in a new 64GB flavor and upgrades the camera to include an 8-megapixel sensor with improved low-light performance and 1080p video capture. In terms of performance the new iPhone is reportedly up to 2x faster and is also capable of running on faster HSPA+ networks, reaching theoretical download speeds of up to 14.4Mbps.
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