Please ensure Javascript is enabled for purposes of website accessibility

Digging in Domestically With the iPhone

By Evan Niu, CFA - Apr 24, 2013 at 6:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With domestic iPhone data in hand, investors can now parse through the figures to get a picture of how the iPhone is faring in the U.S. -- and what that means for Apple's business.

Apple (AAPL 4.01%) just posted its earnings figures last night, almost at the exact same time that domestic main flame AT&T (T 1.67%) put up its own digits. Last week, Verizon (VZ 0.28%) shared its iPhone figures, and this morning Sprint Nextel (S) told investors how many iPhones it activated during the quarter.

With all the domestic data in hand, let's dig in.

Data deluge
Apple sold a total of 37.4 million iPhones during the first quarter, representing a moderate beat relative to consensus estimates. That included 4 million iPhones on Verizon, 4.8 million iPhones on AT&T, and 1.5 million iPhones on Sprint.

Technically, Leap Wireless (NASDAQ: LEAP) is another iPhone carrier in the U.S. with its Cricket brand, but its iPhone sales haven't been meaningful enough for the carrier to disclose specific figures. What investors do know is that the prepaid carrier is well behind schedule on meeting its purchase commitment, so it's safe to say Cricket iPhones aren't moving the needle meaningfully one way or another. T-Mobile is now an iPhone carrier, but that launched after the quarter closed.

Between the top three carriers, there were 10.3 million iPhones activated, or 28% of Apple's total. That composition is down sequentially from 36% last quarter, and in line with historical precedent following launch quarters. Each carrier saw a modest downtick in its contribution to total iPhone units.

Sources: SEC filings and conference calls.

The iPhone's composition of total smartphone sales also remained on par with historical levels for each carrier.

Carrier

iPhone Activations

Total Smartphones

iPhone %

Verizon

4 million

7.2 million

56%

AT&T

4.8 million

6 million

80%

Sprint

1.5 million

5 million

30%

Total

10.3 million

18.2 million

57%

Sources: SEC filings and conference calls.

Keep in mind that Sprint is also on the hook for a $15.5 billion iPhone purchase commitment over four years. Using quarter-specific iPhone average selling prices and Sprint's reported activations implies that the No. 3 carrier has likely fulfilled approximately $6.3 billion of its obligation over the past six quarters. That means Sprint may be 41% through its $15.5 billion commitment through 38% of the time frame -- slightly ahead of schedule. Too bad Leap can't say the same thing.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$143.11 (4.01%) $5.52
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$49.67 (0.28%) $0.14
Sprint Corporation Stock Quote
Sprint Corporation
S
AT&T Inc. Stock Quote
AT&T Inc.
T
$20.74 (1.67%) $0.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.