The iPhone5 is a huge seller, but it may not be selling as well as some had predicted. Just this past fourth quarter, Verizon Communications Inc. (NYSE:VZ) sold a huge number of iPhones in the fourth quarter of 2012, but only half of those were the iPhone5.
According to CNN Money, supply constraints take most of the blame for iPhone5, at least for the first two months after it’s arrival, this disappointed many who wanted to upgrade their iPhones to the latest model. It may have also helped that some of the older models like the iPhone 4S and iPhone 4 were discounted by $100 and $200 respectively. Many people who were waiting for an iPhone, but didn’t want to pay full prices, chose to go with an older model for less.
Verizon sold a total of 6.2 million iPhones, a 48% increase from last year. 3.1 million of those were the iPhone 5. Monness Crespi & Hardt’s analysts decreased their share price target for Apple Inc. (NASDAQ:AAPL). They added that a total of 50 million iPhone sales for a quarter would be a positive surprise.
Later on this week, Apple Inc. (NASDAQ:AAPL) will share their quarterly results. And although they won’t be breaking out into all the different iPhone models, they do plan to share the average iPhone sale price. More good news: the iPhone still ranks as the top choice for all major carriers including AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), and Sprint Nextel Corporation (NYSE:S).
Interesting enough, the iPhones for Verizon Communications Inc. (NYSE:VZ) carry heftier subsidies than those of rival smartphones. Thanks to this, Verizon recorded a profit margin for wireless service and it was 41.4% for the quarter which also happens to be the lowest it was in years.
They also added their expectations that profit margins will average somewhere between 49% to 50% this year, which may be helped by the 5 million new customers and massive growth from their “Share Everything” plans. It could be a significant year for Verizon.