On the Call: Verizon COO McAdam on iPhone

July 22, 2011

Verizon Communications Inc. is benefiting from being able to sell the iPhone, but investors were looking for even stronger results in the second quarter. On a call with analysts, incoming CEO and current Chief Operating Officer Lowell McAdam was asked if he thinks smartphone adoption will speed up this year.

QUESTION: At the beginning of the year we heard that 50 percent of phones in the hands of Verizon subscribers would be smartphones this year. It doesn’t look like you’re going to make it. Do you see anything in the second half of the year that’s going to get you there?

RESPONSE: We like the gross add mix (the percentage of smartphones versus phones sold) that we see coming in here. We are in the roughly 60 percent kind of range.

We are probably what I would view as maybe a quarter behind what we had talked about in January, primarily because we expected an iPhone 5 refresh sometime this summer.

We don’t know when the next one is going to come out. You will have to ask Apple that, but we expect that probably sometime in the fall, and I think you will see a significant jump there when we get to that point.