“Obviously, a big part of this was the impact of the iPhone 4S being delayed until Q4, but there are also some ominous signs for Android vendors in these results given that there were a number of Android launches in the quarter at AT&T and Verizon, and yet Android sales likely declined sequentially and had only modest growth year-over-year,” he writes in a research note.
McCourt adds that a slowdown in Android, Blackberry and Windows Phone sales at AT&T and Verizon “likely indicates a
reasonable number of customers choosing not to upgrade in Q3, but rather waiting to switch to the iPhone in Q4. The strong initial sales figures for iPhone 4S would seem to back up this assumption.”
The analyst also contends that the data suggests that high-end adoption of smartphones is now nearly complete, with 45% of postpaid subs at AT&T and Verizon combined now on smartphone plans, with carriers likely to experiment with lower priced plans to expand adoption to less affluent customers.
“In sum, the AT&T and Verizon data is interesting in that it does suggest a meaningful slowdown in Android momentum in Q3, which could portend significant switching from Android to iPhone during Q4, as it certainly appears that Android customers were not upgrading in Q3 despite numerous high profile Android launches,” he writes. “The other takeaway from the data, we believe, is that the smartphone business is now being increasingly driven by upgrades, which likely indicates that much of the population willing to pay $30+ for an unlimited data plan is becoming saturated. Because of this we would expect more experimentation with various tiered pricing plans and other creative plans to attract the next 55%.”
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