As Much As US Carriers Want To Promote Windows Phone, iPhone Still The Cash Cow

As much as they want to prevent Apple from taking over the US market, AT&T and Verizon Wireless can’t seem to let go of the iPhone either, no matter how much they promote Windows Phone devices. Nevertheless, the two major wireless carriers don’t seem keen on paying a large subsidy on every iPhone they sell and parting with a fraction of the revenue they earn from their subscribers every month. This has got the two companies to now look at working on Microsoft’s Windows Phone 8, which is expected to be released later this year. AT&T has already begun to endorse Windows Phone on Nokia’s Lumia 900.

However, there are a lot of complications involved. Despite their grievances with Apple, both the carriers earn a lot of money from the sale of iPhones. Verizon sold 3.2 million iPhones and AT&T sold 4.3 million iPhones in the first three months this year. With data service revenue rising by 16% and profit margin increasing by 4 percentage points to over 46%, Verizon still managed to earn plenty of revenue from their sale of the iPhone.

At AT&T, the wireless operating income margin went above 27% and earnings before taxes, interests, amortization and depreciation shot up to 42%. However, of late, the inflow of new smartphone users seems to be reducing and this could pose a problem for both the carriers. While 29% of users in the US already own iPhones, 39% of people who plan on buying a smartphone in the near future want to stick to Apple.

Though Google Android currently leads the smartphone market and Android works out well for carriers by costing less in terms of subsidies, Apple is also looking at gaining even more market share, especially because Samsung is giving it tough global competition. Helping Apple’s case is the fact that Android has been witnessing a downfall in the market of late.

Manufacturers aiming to target Verizon and AT&T may have to face problems of slow subscriber growth, slow smartphone development and lesser market share for non-iPhone smart devices, according to mobile analyst Tero Kuittinen. Verizon and AT&T may try all they can to give the sale of Windows Phone devices a boost with the help of resources provided by Microsoft, but this may be insufficient in bringing about any major changes in the carriers’ current association with Apple.