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).