Verizon may be staying out of any Android versus iOS war, but one thing is for sure: smartphone subscribers are the company's future.
Weeks ahead of the Verizon iPhone launch on Feb 10, Verizon chief operating officer Lowell McAdam emphasized to investors that Verizon was "not a one-phone company."
"The iPhone establishes its own gravitational pull, but if you look at [Android phones at the Consumer Electronics Expo] and how much attention we got over LTE and the breadth of those devices I really feel good," he said during Verizon Communications' Q4 2010 earnings call this morning. "We've worked very hard to have a balanced approach. One thing we said we'd never do is be a one-phone company. We're a portfolio company."
While Verizon CEO Ivan Seidenberg admitted he didn't know how well the iPhone would fare, CFO Francis Shammo assured investors Verizon would not have "any flaws on the execution" of the iPhone launch.
Growing smartphone penetration buoyed parent company, Verizon Communications, last quarter. Overall Verizon Communications announced a net income of $2.64 billion on revenue of $26.4 billion. This is down 2.6 percent from a year ago, as revenue from its fixed-line business fell 2.8 percent to $10.8 billion-- despite FiOS revenue growing 26.8 percent year-on-year.
However the company experienced strong revenue growth in its wireless business, Verizon Wireless, which surged 5.7 percent from a year ago to $16.1 billion. Data revenue accounted for $5.3 billion of this amount.
Verizon Wireless added just over half a million smartphone subscribers last quarter. The company said smartphone penetration has grown to 75 percent of its postpaid base, up from 15 percent a year ago. Overall the company added 872,000 new postpaid customers, beating analyst expectations of 650,000.
Smartphone users now account for 26 percent of Verizon's total postpaid retail base. McAdam said he expects at least half of its wireless customers to own a smartphone by the end of the year.
Furthermore Verizon sold 86,000 tablets, mostly iPads, and 96 percent of those customers were new to Verizon.