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There has been a lot of buzz about wireless operators getting rid of mobile subsidies in the near future and how that may potentially hurt Apple (NASDAQ:AAPL), but if the Verizon (NYSE:VZ) chief financial officer is to be believed, the iPhone maker has nothing to worry about.
Fran Shammo said at the Deutsche Bank Annual Media, Internet & Telecom conference that Apple’s free-on-contract iPhone 4 had produced a lot of volume for his company, and the operator had no plans to offer incentives to sales staff to push low-cost alternatives despite the Apple smartphone’s high subsidy costs.
In its fourth-quarter earnings report last month, Verizon said 6.2 million of its total 9.8 million smartphone activations were the iPhone. And while the new iPhone 5 helped drive sales, the free iPhone 4 also proved to be a major factor. “This past fourth quarter you had a couple — you had really one thing happen that never happened before, especially with Verizon Wireless, and that was for the first time ever, because of the iPhone 5 launch, we had the 4 at free,” Shammo said.
“So it was the first time ever you could get a free iPhone on the Verizon Wireless network and that produced a lot of volume for us. We had a lot of new customers come into Verizon who took that free phone, and that was great for us because again if you think about — we sold a lot of LTE product in the fourth quarter. We sold a lot of 3G product from the iPhone products in the fourth quarter”…
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