Verizon has announced their earnings for the first quarter of the year and given the brisk sales of the carrier’s iPhone 4S after it was launched, it represented a bulk of its Q1 numbers. But what we must understand is that the iPhone 4S was mostly sold on a 2-year contract and because of a subsidy by Verizon itself to keep the initial price low, the real money on the handsets are actually made from the contract after the transaction and not really at the point of sale. According to the Q1 report by Verizon that was released on Thursday, monthly bills for contract subscribers were $55.43 which is 3.6% more than last year at the same time.
The original figure was dormant several months earlier which showed the effect the iPhone launching had on the overall numbers. Along with the increase in bill-based revenue, the carrier’s total revenue also increased by 4.6% which totals up to $28.2 billion which overtakes last year’s tally of $27 billion. This quarter, Verizon is expected to lead the industry having sold 501,000 contract based plans which apparently is more than analysts first predicted and also twice as much as what is predicted for competitor, AT&T which will also be releasing its Q1 report on Tuesday. The tendency of Apple’s iPhone to increase wireless sales is being called the “iPhone effect”. In this past quarter, the iPhone 4 or 4S has sold no less than 3.2 million units which make it their most popular device.
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