Verizon Halts iPhone Sales After Record DayBy Reuters | Posted 2011-02-04 Email Print
Verizon's iPhone sales beat its previous launch-day phone sales record in just two hours.
NEW YORK, Feb 4 (Reuters) - Verizon Wireless ended online sales of Apple Inc's (NASDAQ:AAPL) iPhone on Thursday evening, after beating its previous launch-day phone sales record in just two hours.
But Verizon shares fell almost 1 percent as analysts cautioned that the new phone would hurt profits at the No. 1 U.S. mobile operator, whose shares had risen 13 percent since November in anticipation of the device.
Verizon said it ceased iPhone sales at 8:10 p.m. EST (0110 GMT) on Thursday after inventory it had set aside for existing customers ran out. I had starting taking pre-orders for the device at 3 a.m. that morning and broke its record for a first-day launch in two hours.
The company said by the way that after the initial spike in demand it had a steady stream of orders throughout the day. It was balanced throughout the country.
Verizon Wireless Chief Executive Dan Mead said in a statement that it was the company's most successful launch ever.
Verizon's launch of iPhone ended AT&T Inc's (NYSE:T) more than three years' of exclusive U.S. rights to the phone.
Nomura analyst Mike McCormack said Verizon Wireless could sell more than 12 million iPhones this year, giving it a "meaningful share" of subscriber additions.
But McCormack said iPhone would weigh on Verizon's profit margin as it comes with hefty subsidy costs and that the margin pressure was unlikely to ease after the initial burst of sales of the device as some investors hope.
"While such a scenario is possible, we grow increasingly skeptical that such an outcome is likely, and note that it certainly never proved to be the case at AT&T," he said.
Verizon Wireless, a venture of Verizon Communications Inc (NYSE:VZ) and Vodafone Group Plc (VOD.L), plans to release the iPhone for general availability in its stores Feb. 10.
Verizon shares were down 33 cents, or 0.9 percent, at $36.07 on New York Stock Exchange, where AT&T shares were down 8 cents, or 0.3 percent, at $27.91. Apple shares were up $1.71, or 0.5 percent, at $345.16. (Reporting by Sinead Carew; Editing by Gerald E. McCormick and Steve Orlofsky)