Verizon activated 6.2 million iPhones during the quarter, half of which were the iPhone 5. This is slightly better than Wall Street was expecting, and the case can now be made for a 50 million+ iPhone quarter. Apple has increasingly become a seasonal company, with the holiday season carrying significant weight, and any optimism here, pending guidance, should bode well for the company's long-term future.Now, on to the subsidy thing. Subsidies, briefly, came up on the call, but let me make this completely clear: When the Verizon CFO said he would be looking at "subsidy reduction" (and he did say this), he did not specifically call out Apple, iPhone 5 or whatever iPhone we get next. It's also worth pointing out, as caught by Twitter follower @craig_kimball, that Verizon spoke of the same thing as long ago as the first quarter of 2012. This talk -- or these threats -- of cutting smartphone subsidies is hardly new. So, we've got nothing Apple-specific here, which could mean that Verizon has no plans to touch the iPhone subsidy. Maybe it will just tinker slightly with some of the other ones or the iPhone by a meaningless amount. Or maybe not. As I heard things on the call, the company's pretty happy with the way things are going regarding increased smartphone adoption and subsequent data consumption. During the Q&A session, the company touted considerable uptake in data consumption, thanks in large part to the speed of its LTE network. Fast and reliable network equals more video streaming, game playing, etc., etc. which, according to Verizon, leads to people upgrading to more expensive shared-data plans.
AAPL). Now, by "cheap" iPhone, I don't mean that inane rumor that Apple plans to make a smartphone out of plastic. I mean the "cheap" iPhone you can buy right now. The one for $199 online at your local Apple Store, via your friendly neighborhood wireless carrier or through an electronics store. The one that you think is "cheap" but in all reality is anything but. We'll get to that in a second (and it's critically important because, again, I cut through the noise and hysteria on Apple here), but first ... When something happens with Apple, I usually bounce it off TheStreet's resident tech authority (and geek) Chris Ciaccia. Along with the numbers you need to know, Chris agrees -- what Verizon had to say bodes well for Apple:
Speaking of shared data, Verizon allows up to 10 devices on one plan. Alongside the impressive statistic that 30% of smartphone customers are new to Verizon, the CFO claimed that, within six months, these customers nearly double the number of devices they associate with one plan. That's cash in the bank for Verizon simply because of the associated monthly device charges and data use fees. As a Verizon customer, I can vouch for this. I will bare my soul for this job so, here, take a look at my actual Verizon Wireless bill:
First, LTE rocks, at least here in Southern California. I consume exponentially more data now that I'm on Verizon's network than I ever did on the wholly unreliable AT&T ( T) tin can and string system. But it's a locational thing; your mileage may vary. Second, the notion of adding a device. So true. I switched to VZ from T when I bought two iPhone 5 smartphones, one for me and one for my wife. $199 a pop. Wow! What a bargain!! Bull. We pay $50 a month for 1GB of data. I won't even mention the monthly charge for having a smartphone. Our monthly bill comes to somewhere around $150. We're locked into a two-year contract. We are thinking of adding a device -- maybe an older iPhone -- for our child. That will ratchet up our monthly bill automatically and, quite possibly, cause us to up our data allocation. That's how it rolls. Do your homework. Listen to Verizon's call. I linked to it at the beginning of this article. Pay attention to the way they talked about smartphone subsidies in relation to device uptake and data consumption. Seemed to be pretty happy with the situation to me. Plus, Verizon referred to it as just one part of the company's overall cost structure. There's hardly a story here. Apple has -- seemingly -- pushed around wireless carriers for years. Don't let negative AAPL sentiment from Wall Street cloud your vision. Apple did not go and will not go from (cough, cough) fleecing companies like Verizon (they're not being fleeced!) to becoming a chew toy overnight. Not going to happen.
If Verizon, AT&T or other carriers, for that matter, pushes too hard, they'll end up shooting themselves in the foot. They know this. Remember, iPhone accounted for 63% of smartphone sales at Verizon. As we know from traffic data, iOS products drive Web traffic and data use. Verizon, which is a great company and stock by the way, was ultra-bullish on 2013. Do you really think it's going to (enter cheesy financial writer line here) upset the Apple cart when things are going so amazingly well? Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.