Is Verizon intentionally talking customers out of iPhones?

By , May 5, 2012

Of the 6.3 million smartphones Verizon sold last quarter, 3.2 million of them were iPhones. This means it sold more Apple-branded handsets than it did all other smartphones combined. So the carrier must really be pushing these things, right?

Well as it turns out, that doesn’t seem to be the case. CNET’s Chris Matyszczyk recently went to his local Verizon store to investigate a rumor that Big Red reps were actually purposely diverting iPhone sales. And judging by the account, they are…

“First, I noticed that the iPhones at this Verizon store weren’t displayed near any of the other smartphones. They had their own little home, tucked away against a wall. The majority of this store was given over to rivals”

Ok, so the iPhones are in the back corner. Surely handset locations vary from store to store. But what about sales pitches? Check out what happened when Matyszczyk told the Verizon rep that he was looking for a new smartphone:

He darted immediately toward the Motorola Droid Razr. He explained that this would download anything 10 times faster than the iPhone… …Phil explained that this was what 4G could do for you and the iPhone just isn’t 4G. He added that the Marketplace is so much less expensive than Apple’s. “And a lot more apps are free.”

He could still feel my doubt. I have that kind of face. So he added: “And the battery lasts a lot longer than the iPhone…” …that’s when I interjected with my questions as to why Verizon sells iPhones at all. “Verizon doesn’t push iPhones,” he explained. “Apple pushes iPhones.”

Sure, this is only one man’s account. But it didn’t exactly prove the theory wrong either. So let’s pretend for a second that Verizon really is deflecting iPhone sales. Why?

There’s a couple of reasons I can think of off the top of my head. For starters, Verizon and Apple haven’t always been the best of friends. There’s a history there, and it goes all the way back to rumors of Verizon turning down Steve Jobs’ offer of carrying the original iPhone. Then there’s that time that the carrier backed Samsung in a lawsuit, asking a US district judge to deny Apple’s request for an injunction on Samsung’s products. Ouch.

But the real answer here is probably much simpler. Think about it: Verizon has been a major catalyst in the growth of Android here in the US thanks to its popular Droid campaigns. And not only that, but the Android platform is currently the only one churning out LTE-compatible devices. And what company is pushing LTE more than any other carrier in the world? Verizon.

Now, don’t underestimate the power of that last fact. It’s become fairly common knowledge that it’s much cheaper for a carrier to operate LTE than it is 3G (after the initial investment). So if you’re Verizon, and you’re trying to lower operating costs, and at the same time pad your LTE numbers, why would you push a 3G device?

So to answer the question at the top of this post: is Verizon intentionally talking customers out of the iPhone? Probably. Reps are more than likely being told to push 4G phones over iPhones. And I wouldn’t even be surprised if they were getting incentives to do it.

It’ll be interesting to see how Verizon’s relationship with Apple progresses after the company releases its LTE handset, which is rumored to happen sometime this fall.

  • Share:
  • Follow:
  • Anonymous

    I used to work for a major cellphone carrier store. Its a fact that apple makes us set up their enclosures separately. I find this to be a good marketing idea.

    • http://twitter.com/RilesPro RilesPro

      While true that they have a contractor (supposedly) who locates the display, it is odd that many times they are not in a prime location ie a back wall with relatively dim lighting. It’s shameful, they promote off of Apple’s back. If Apple can find a way to subsidize iphones they should bring back the model cutting out the carriers altogether, and just let the customer choose upon boot up.

      Also they should all come unlocked!! For pete’s sake what the hell. You already enter into a legally binding contract. Unlock the damn thing!

  • http://www.facebook.com/dsaenz85 Dan Saenz

    I know for a fact that AT&T does. A good friend of mine told me they recently had a meeting and told them to try to sell anything but the iPhone.

  • Anonymous

    I know they do this too. I see people using some of these crap phones and the only things they know is iPhone is more expensive (this is a myth that needs killed badly) and their phone has 1 more “g” than the iPhone, therefore it is better.

  • http://twitter.com/Franco_leon Franco Leon

    wow. yesterday i left my friends plan(due to some reasons) and signed myself as a brand new costumer and chose my plan etc… as soon as he started the “showing of the phones” part he went straight to the androids, i told him i didnt want an android and ive loved my previous iphones and he kept insisting on how much better the androids were. point of the story is that this happened to me yesterday.

  • Anonymous

    I work for a telecommunications company and I assure you this is the most unproven report. Apple products are usually always kept seperate from other devices. Not only that but many times other products pay higher incentives (commission) then when they sell an iPhone (apple products usually never have extra incentives). Other cellphone manufactures pay big bucks to pay employees more so they push there product. sales reps tend to pick whatever is going to make them more money, so that’s what they sell.

    iPhone’s sells themselves at this point anyway.

  • Anonymous

    Nice post, Cody.

  • Anonymous

    Honestly, Verizon needs to do what they can if they’re trying to push out 4G phones. Nowadays, the only reason people want an iPhone is because everyone has one and it has Siri, while when people look at Android phones, all they say is, “This phone is way to big.” or “It looks too complicated.”

  • Anonymous

    Verizon has been pushing Droids since they came out. They killed the Palm platform as a result of pushing customers away frm anything not Droid.

  • Anonymous

    So one single instance, at one single Verizon store, with one single employee means that this is a company-wide initiative? I think not. Verizon is running a business, they don’t care which manufacturer sells more phones, they care about making money. If 50% of their smartphone sales are iPhones, then it stands to reason that they would be happy selling the iPhone.

    I think this article was very subjective and a poor attempt at painting Verizon in a negative light. Did you ever stop to think that maybe this particular employee was an Android user and was biased against iPhones?

    • Anonymous

      “Sure, this is only one man’s account. But it didn’t exactly prove the theory wrong either.”

      ONLY ONE MAN’S ACCOUNT. He’s just thinking why would Verizon (hypothetically) be pushing customers away from the iPhone.

    • Anonymous

      Three things. 1. The post mentions that this is only one man’s account, so no, this is not proof of a company-wide initiative. 2. According to the source article, from CNET, the rep in the story is actually an iPhone user. And 3, I am 1000% sure that this going on. It is in fact a company-wide initiative and stores are expected to hit a certain percentage of 4G devices every month.

      No one is trying to paint Verizon in a negative light. It’s just interesting that this is going on. And even more interesting that, despite the 4G push, people are still buying iPhones 2-1.

    • http://twitter.com/RilesPro RilesPro

      This is not isolated buddy. Good for VZ let them run their business, but Apple should punish this. It’s not surpirsing VZ wants customers on a higher margin service like LTE (they have marketed to us in such a way that we believe faster is more expensive and we should be happy to pay up). Not to mention when they sell so many iPhones w/ a larger subsidy it is in their interest to steer folks away. VZ sees Apple as a threat/competitor in many ways and they do their part to mitigate this.

  • http://twitter.com/packerrd packerrd

    I think it was just employee. Sprint now brags and have ads everywhere that they have the iPhone, but when I went to buy an iPhone 4S to a sprint store, the employee couldn’t stop telling me how great the htc evo was and why he hates the iPhone.

  • http://twitter.com/intelxtreme kill all mexicans

    iphone 4s is king and is like a computer droids and  and android suck its like comparing mac to pc

    • http://twitter.com/thehayhorse Hayden Jenkins

      While I agree that iPhones destroy android on most fronts, you can’t say that mac is better than pc. I’m sorry, but what can macs do that pc’s can’t?

      The main reason the iPhone beats android is because of the apps. All smartphones are. iphone apps are better, and there’s more of them.

      Macs and pc’s? well…not so much. the number and quality of apps macs run can’t even hold a candle to pc apps and quality.

      • Kok Hean

        Each OS has its own applications for consumer use. It’s all down to user preferences.

      • http://twitter.com/melovestoast Jared Floyd 

        Macs have a much more modern looking clean interface, have less complications, you’re practically immune to viruses, you can make funny looking pictures of yourself, macs can run any other OS legally, and OS x comes with a lot more apps stock. Plus quality iOS development can’t be done on windows.

  • Kok Hean

    “And a lot more apps are free.”

    Why, of course some people love Android. Some paid apps on iOS aren’t worth paying for.

  • Kok Hean

    “And a lot more apps are free.”

    Why, of course some people love Android. Some paid apps on iOS aren’t worth paying for.

  • http://twitter.com/Nicholas_Cline Nick Cline

    I work for Verizon, and it’s true that we do everything to deter our customers from purchasing the iPhone. Why? Because Apple is SCREWING Verizon and Verizon’s retailers on the device. Apple also receives HALF of the data revenue for each handset plus the cost is so high, Verizon and it’s retailers LOSE money every time one is sold. Plus, Apple has decided they don’t want to pay us as much as Droid manufactures do to push their product. So for reps who are 100% commission based, such as myself, why would I sell an iPhone and make $70 per device when I could make anywhere from $100-$150 when selling a Droid? Not to mention iPhones don’t count towards our numbers like every other phone we carry does,  including basic feature phones. I have the iPhone, love the product, but I won’t sell it until I’m paid to do so. Oh, and here’s a fun fact: Verizon had never gone negative in a quarterly year in their history until the year it launched the iPhone on their network. That’s no coincidence. Apple better start looking out for the network providers that carry their phone, or the relationships they have will ultimately deteriorate completely. AT&T, Verizon, and Sprint have done nothing but lose money since they sold their souls to Apple. All it will take is for those three major carriers to ultimately stand up together and give Apple the middle finger for things to change. Trust me, it’s coming.

  • http://www.facebook.com/AKChris82 Chris Williams

    I think it’s Stupid…bad Business & it makes Customers seem stupid.

  • http://twitter.com/Nicholas_Cline Nick Cline

    I forgot to also mention that, until Verizon got the iPhone, we had things such as Annual Upgrades and New Every Two credits. As a part of Verizon’s contract with Apple, Verizon was forced to get rid of these, leaving we the customers out to dry. And as of two weeks ago today, Verizon introduced a new, $30 dollar “upgrade fee” for every phone to make up for the loss they take on iPhones. Bad, bad business.

  • http://www.facebook.com/people/Thunder-Cats/100003820771463 Thunder Cats

    who wrote this stupid blog? Why would Verizon discourage people from signing up with iphones when they paid Apple billions?

    Just because the iphones were not placed near other smartphone doesn’t mean shit! Other devices/manufacturers are pushing higher incentives and commissions so the layout of the store is strategic.

    update: I forgot, some bloggers are more dumb then others. This guy is talking out of his ass and proved my point.

    • Anonymous

      Ok, first of all, Verizon didn’t pay Apple “billions.” Thats just ridiculous. Sprint’s iPhone deal was somewhere in the neighborhood of $500 million, so I can’t imagine Verizon paid much more than that. Next, there was a lot more to the post than just where the iPhones were placed in the store. A lot more. And finally, you’re right. Some manufacturers probably do give incentives to wireless sales reps. But that would still prove the point of the post, which is that Verizon employees are intentionally deflecting iPhone sales. Interesting.

      • http://twitter.com/melovestoast Jared Floyd 

        Thunder cats is stupid. This is a great blog, Cody. I’ve wondered these things ever since I’ve been in a verizon store. They tried to persuade me to get a some android phone when I had already told them I wanted the iPhone and wasn’t changing my mind because android phones are a piece of crap.

    • http://www.facebook.com/profile.php?id=100000041129068 John Angelo Moraitis

      Version did’t get the iphone to push it. They got it to stop customers from leaving to at&t and to get transfers from at&t where their coverage is better.

  • Anonymous

    There’s probably some annoyance from Verizon that AT&T iPhones have 4G data transfers. Although not LTE, it gives AT&T a marketing edge since the relatively inexpensive software update was pushed out nationwide much quicker than LTE could be. AT&T is about a year behind Verizon on LTE deployment. Naturally, a business wants its new technology to be an early success, rather than sell what they’d like to transition out of. When Apple intros their 4G LTE iPhone, they will begin pushing iPhones again

    Cheers !

  • Anonymous

    There’s probably some annoyance from Verizon that AT&T iPhones have 4G data transfers. Although not LTE, it gives AT&T a marketing edge since the relatively inexpensive software update was pushed out nationwide much quicker than LTE could be. AT&T is about a year behind Verizon on LTE deployment. Naturally, a business wants its new technology to be an early success, rather than sell what they’d like to transition out of. When Apple intros their 4G LTE iPhone, they will begin pushing iPhones again

    Cheers !

  • Anonymous

    When I went with my brother to get him an iPhone, when we got there they had a little table advertising 2 different LG phones. Can’t remember which ones. But the 2 reps couldn’t stop telling us about the 4G speeds and HD screen, as they called it, and some other features like tapping on the side of the phone to move the cursor while typing because apparently it makes typing easier. Anyways, they both were trying so hard to get him to get either of the phones, and when I mentioned to my brother to go look at the iPhone since that’s what we came for, they both looked pissed that he wanted that instead of the LG’s.

  • Anonymous

    I believe, like people have mentioned before, that it’s not about the phone, but more about pushing their 4G data to expanded.

  • http://www.iamspencer.com/ speener

    Verizon also has more control over content and the phones than on Apple. Don’t forget the original reason that Verizon lost the original iPhone – because they wanted more control than apple was willing to give.

  • Anonymous

    Funny. All 3 Verizon store I visited had the iPhone in it’s own little corner. When i did buy one, the rep did in fact try to get me to buy an LTE Android.lol. And I’m not the only one either.

  • Anonymous

    The point is for the people that don’t agree with this article. Yes Verizon wants to have iPhones at there store to sell, but they would rather sell other smart phones if possible because of profit margins. They know iPhones sell themselves no need to push sells, less profit. So they have the iPhone but if they can’t talk you into another phone they still have the sell.

  • Anonymous

    could be the whole att ceo being bitter about imessage and screwing up their data networks and plans. wouldn’t surprise me if verizon (and sprint) feels the same way.

  • http://tavlen.tk/ Mathias Lindberg

    If I were to sell phones, I would put them each in their own section. From smaller screens to bigger screens, from hardware keyboard to software keyboard, Blackberry to Android, and so on. You don’t have to put them each in their own section, but you can make an Android section and then group them by their features. There’s not 1 thing that fits all, so it’s best to highlight them all in their own way.

  • http://twitter.com/GuyBey0ndC00L eDDie

    AT&T & Verizon push other ” Smart Phones ” over iPhone simply because the other ” Smart Phones ” cost less money for the companines to get. The iPhone is very expensive and even though the companies sale a lot of iPhones the revenue is not the same. Android Phones make them more revenue even though the iPhones sale better. Just read what happen to Sprint CEO the day. 3.25 million pay cut over iPhone subsidy rate.

  • Craig Conte

    I know someone who i s a rep at verizon and they told me the commision is greater on the LTE smart phones and is less on the iphone. Thi sis why they are pushing other devices because they make more money by the end of the month.

  • http://www.facebook.com/profile.php?id=100002720427441 Matthew Nelson

    Odd. I bought an iPhone just yesterday at my local verizon and was welcomed and encouraged to buy it. Didn’t even once mention a droid.

    • Anonymous

      Not really, nobody says it happens every time. Your rep may like the iPhone or didn’t feel like talking you out of it. I’m sure he noticed the Apple shirt you were wearing with the nano wrist watch. :) just kidding!

  • James Wood

    COMMENT REMOVED.

  • G$

    its the money. apple pays the sales reps junk compared to the other phones like droids. why sell something like that for 75% less then the other smartphones.