I'm thinking this is it: the huge amount of more casual Verizon buyers — the ones whose arrival to the App Store I’ve been eagerly awaiting — are far more likely to wait for their contracts to expire.
Most of the people I know who are on Verizon and are Mac focused or Tech savvy have either an iPad or iPod Touch, and already have the apps they want.
Also, Instapaper is pretty darn geeky in the grand scheme of things - It's somewhere between RSS readers and Dropbox in terms of non-technical user acceptance.
I've got both my parents using it, mainly just as a file sharing service (drag file into dropbox, get public URL, paste in email). It's easier for them to understand than a file sharing site like Rapidshare.
I've gotten some of the least techie people I know using Dropbox. It's surprisingly one of the few new tech products that's really just caught on with computer users of almost every skill level and sophistication.
Instapaper does seem geeky, but if it's always in the top charts for paid news apps I think it's safe to say that it's pretty mainstream in the iOS ecosystem.
I've been thinking that the iPod Touch is a kind of weird market segment for a while, yet it's been selling strongly.
They're basically aiming for people to young or poor to get an iPhone, a market that the ever decreasing price of Android phones should start to eat into, as will a low price iPhone if recent rumors are to be believed, to the point of it being an evolutionary dead end.
I hadn't considered the impact of iPhone being carrier locked in the US. I wonder how this will impact sales and development interest from Apple.
I think the easier answer is that Verizon iPhones are strong but not earth shattering. All evidence so far supports that sales are lower than expected (best indicator: Apple has yet to do their typical "we sold a million in 48 hours" press release that has followed every other major release). It was important for Apple to get on more carriers and I am sure it will net another few billion, but my guess is the tech community overestimated how much pented up demand there was.
Yeah, I'm surprised people were so bullish on the VZW iPhone. Consumers have had 4 years to switch to AT&T and buy an iPhone. Why would the VZW iPhone change the market equilibrium in the short run?
I have said previously on HN that the Verizon iPhone was too little, too late, and that last Summer, Verizon's Android offerings became good enough for most of the consumers that wanted a smart phone on Verizon's network. Those that wanted an iPhone badly enough had plenty of opportunity to switch to AT&T; the remaining hold-outs -- those that hated AT&T passionately enough (or were in areas that it didn't serve) -- gave up waiting last year and found a good enough Android device.
I'd also argue that consumers are savvy enough to predict a new iPhone coming out later this year — after all, it has been on a yearly cycle since its launch.
They may be holding out for a new release rather than committing to a contract/service now.
I fall into both these examples. I had an iPhone and kept waiting around for either better reception or verizon iPhone. I finally gave up and bought the droid 2 last aug but it isn't as good as the iPhone. I qualify for another upgrade this aug which puts it right about the time iphone 5 comes out. I'll wait for 5 then dump droid and go back to iPhone.
I don't think it's about lack of pent up demand, it's that this actually doesn't offer the iPhone to most of Verizon's customers.
A lot of us will change, but that demand is going to stay pent up until our upgrade cycles stick around. The pricing just isn't right ($600 without an upgrade), whereas coming from AT&T $200 isn't that bad. Verizon still has many eggs waiting to hatch in its customer base.
I don't think lack of early sales reflect the lack of value of the phone, just the fact that people know they can wait a bit longer and get it for 1/3 the price.
An interesting question would be how many Android phones did they sell at Verizon over that same time period. If Android at Verizon sold neck and neck with Apple during this time period, that probably bodes less well for Apple. But if the iPhone is selling much better, that's a good sign, especially when the iPhone 5 comes out.
I agree lots are waiting for the iPhone5, but I'm not so sure one will be releasing! I don't see a reason for apple to release an updated phone because of it's superiority in the current landscape. The longer they wait, the larger their tech margins. People may be waiting and expecting a new version because of the past, but this may be the time for apple to shatter the schedule to stop people from behaving this way.
However, the iPad I could see getting an update because of it's early life and a nice update would further the gap delivering a crushing blow.
People are waiting, or they are not; whether or not the 2 types of phones hit at the same time is not relevant to what people are doing. He said he knows a lot of people are waiting, so it clearly DOESN'T depend on that assumption.
If Apple were going the staggered release concept, they would have been wise to let the public know (so they don't wait a few months for a phone that doesn't appear, then decide to get an Android instead).
The phone 4 for Verizon uses a dual-mode chipset (same as the druid pro) - they just haven't added a SIM slot to it. The smart money is on the next iPhone supporting both (it will have to anyways in order to support LTE data).
If the CDMA phone isn't selling well, there would be no reason to hold the CDMA iPhone back.
i don't have the source in front of me at the moment - it was on HN a week or so back - but there were parts orders in china that indicate apple is planning to launch a dual band CDMA/GSM version of iPhone 5...
Isn't a further possibility that the number of total iOS devices activated (new owner or existing owner changing service provider) has remained flat.
Wouldn't this be the case if a person wanting to buy an iOS device didn't care about provider? If BestBuy is the only retailer distributing product X, and then after a few years, Radio Shack begins stocking the same product, would you automatically expect product X to have 2x sales? If so, distribution would be the only thing that mattered in gaining market share.
Verizon iPhone owners are buying very few apps relative to other iPhone owners. This also seems unlikely.
I would like to see more data to address this question. Especially interesting would be data form anyone delivering a free ios app. Verizon users have been pushed towards to Android phones for a year now, and that user base is trained to look for free instead of paid.
I was an existing Verizon customer, and finally convinced (today) the store to sell me an iPhone at cost. I had a Razor, from 2006, but my 'free upgrade' went to my brother a few months ago when he lost his, though I still had a free upgrade from two years ago I didn't use...apparently those don't accrue every two years.
Anyways, as an existing Verizon customer they made it really hard for me to get an iPhone--mainly without spending $749.00. I feel that many customers are in that weird stage where they can't get the iPhone at the 199/299 price and if they hadn't left Verizon for AT&T they more than likely weren't dying to have an iPhone for the price of a new iPad.
Why would they "accrue"? You get a subsidy because you renew your contract. Just because you didn't renew your contract two years ago doesn't mean you could somehow renew your contract "twice" now.
My sales have also remained very steady, which I was not expecting at all. Perhaps it will take time for Verizon iPhone owners to get used to buying apps?
That was my initial guess... I see two main scenarios for Verizon iPhone buyers:
1) existing iPhone users switching to Verizon
2) Verizon users that don't have an Android phone buying an iPhone
In the first case, they'd already have the apps they want. In the second, they may not be used to buying Apps yet. I'd be interested to know what the sales of something more mainstream would be. I just don't see the buyers of Instapaper being in category #2.
I would assume that new customers with app-less phones would be the most eager to start filling up their phones with apps---isn't that the point of buying a smartphone?
When I bought my phone, I swore I wouldn't buy any apps. I don't know why, but I just thought it was something I had to tell myself. 2 years later, well...you know how it goes.
Well, when on VZ a few years back with my Treo I made it a policy not to buy any service bump or add-on as I felt VZ screwed anyone foolish enough to try... perhaps the VZ feature-phone switchers are still thinking likewise?
> Perhaps it will take time for Verizon iPhone owners to get used to buying apps?
As a user, I have just the opposite experience: I buy 90% of my apps within 2 weeks of getting the phone. Thereafter my phone's customized and my app-downloading/buying dwindles significantly.
I noticed nearly the exact same thing, but from the Android Market perspective.
I too have a top 5 app in my category.
I too don't see any change in rank on a day to day basis.
I too have a top 50 paid and free app.
I too have seen no significant change in sales volume since the iPhone launch on Verizon.
Maybe he's right. Maybe the largest percentage of change has come from iPhone owners switching networks, but it certainly hasn't affected sales of my apps in the Android Market which are staying good and strong.
And to be honest, I really thought the Verizon launch of the iPhone was d-day for Android Market sales. I'm HAPPILY wrong.
My hypothesis is that most people willing and able to do that for the iPhone were also willing and able to jump carriers to get an iPhone on AT&T sometime since its release nearly four years ago.
I said exactly this once the Verizon iPhone rumors started building up a few months ago.
The cell phone market is a market, like any other. Like any other (unregulated) market, it has probably been at equilibrium for some time, as anyone that wanted an iPhone could've switched to AT&T over the last 4 years. So the strong iPhone demanders are already AT&T subscribers.
Who's left? Casual Verizon iPhone demanders. Let's assume they're not on AT&T (if they were on AT&T, they'd already own iPhones--trivial case). These people are casual demanders, so they won't pay $200 to break contract and get iPhones. They'll wait instead. What happens to them when a Verizon iPhone is announced? Nothing--they're still locked into their former contracts.
More likely is that Mauro sees a slight trend increase over the next few months (as these casual iPhone demanders see their contracts end and decide to buy iPhones).
I'm not shocked that February 10th was not a humongous success. Gruber predicted something like 1.5-2 million Verizon iPhones sold, but that number was too high. The iPhone market has had 4 years to settle down.
His experience correlates with the rate of change in Android/IoS ownership (aka phone sales/adoption). So basically it would seem that adding Verizon wasn't a huge boost to the total number of iPhones in folks hands, or that other signals have swamped that contribution. (The iPad is a good candidate for such a signal)
I think the biggest reason here might be that most Verizon customers who wanted to switch to iPhone without switching networks purchased an iPod touch to get iOS without switching networks. If so, they simply transfered the apps they'd already purchased to their new iPhone and kept on using them as before.
I'm not so sure. My step father just showed me his brand new verizon iphone he got the other day. He switched from bberry then tried and returned the android.
There are circa 75 million iphones in use. AT&T activated about 4 million phones in q4 2010. The Verizon iPhone has been available for just a little over 40 days.
If Verizon iphones sold at the same rate as AT&T models (which includes the 3G and 3GS at much lower prices) we would expect the total installed base to have increased by... about 2%.
Even if Verizon iphones sold at say 3x the typical rate the resulting 6% increase in installed base would still fall down into the noise on these graphs.
In short, this data is not even remotely conclusive.
It's not the installed base that matters, but rather new users, since they are presumably the ones who are more likley to buy an existing app. At least that's my take based on reading Marco's post where there are spike events that cause sales to go up.
Most of the people I know who are on Verizon and are Mac focused or Tech savvy have either an iPad or iPod Touch, and already have the apps they want.
Also, Instapaper is pretty darn geeky in the grand scheme of things - It's somewhere between RSS readers and Dropbox in terms of non-technical user acceptance.