Verizon recently reported a surprising decline in its Q1 postpaid phone subscriber numbers, with a decrease of 289,000 users. This downturn is largely linked to weakening demands for the iPhone in the U.S. market. Notably, about 70% of iPhones sold in the U.S. come through carriers, making this trend concerning for both Verizon and Apple.
Along with the drop in subscribers, Verizon’s upgrade rate for postpaid services was recorded at 2.8%, marking the lowest figures seen in several years. The company indicated that although sales started to rebound in April, the ongoing trend of diminishing smartphone demand in the U.S. remains troubling. Analysts from UBS have suggested that Verizon’s disappointing subscriber retention correlates with a general decline in smartphone demand, which could potentially affect Apple’s sales figures.
The data also revealed a slight increase of 0.7% in wireless equipment revenue, reaching $5.398 billion, which exceeded expectations. However, this also aligns with concerns regarding low consumer interest in purchasing new smartphones. Furthermore, Verizon noted that the anticipated impact from tariff changes on imports did not catalyze a surge in iPhone purchases before new taxes were implemented.
Instead, added inventory of iPhones reportedly sat unsold in Verizon’s stock. The uncertainty surrounding tariffs on electronics continues to loom large. Currently, some tariffs on imported electronics, including smartphones, are on hold.
However, President Trump has indicated that new tariffs on semiconductors might emerge, which would likely include smartphones, leading to potential price increases for consumers across major wireless providers. This situation raises questions about the future pricing landscape for smartphones and the dynamics of the U.S. market.