Verizon sees 'record' 1st-day sales with iPhone

[February 05, 2011]  NEW YORK (AP) -- Verizon Wireless on Friday said its first day of taking online orders for the iPhone produced record sales, and it's stopped taking orders until Wednesday.

The cell phone carrier said that in just two hours Thursday morning, between 3 a.m. and 5 a.m., more customers had ordered the phone than in the full day of any previous phone launch.

The company didn't specify how many iPhones had been ordered. It halted orders at 8:10 p.m. Thursday, and said it will resume taking orders at 3 a.m. on Wednesday.

It's only taking orders from current Verizon subscribers. The phone will be available in stores for the general public next Thursday, but supplies are likely to be tight.

AT&T Inc. has so far been the exclusive carrier of Apple Inc.'s popular phone in the U.S. It activated 15.2 million of them last year. Analyst estimates for Verizon iPhone sales this year vary widely, from 5 million to 13 million. Analysts expect the sales to Verizon subscribers will be strong, but the big question is how many iPhone buyers will be jumping ship from other carriers.

Barclays Capital analyst James Ratcliffe wrote in a research note Friday that he had been expecting that AT&T would still be able to add a net 250,000 subscribers on contract-based plans in the first quarter, but news of the strong iPhone pre-orders on Verizon prompted him to lower that forecast to zero.

Verizon shares fell 7 cents to close at $36.31. AT&T shares fell 2 cents to $27.97. Both stocks are close to their two-year highs.

Verizon is offering trade-in rebates for new customers, which can help offset the cost of breaking a contract with AT&T. For instance, it's offering $212 for a 16-gigabyte iPhone 4 in good condition. AT&T's fee for breaking an iPhone 4 contract early is $325, but that's pro-rated by $10 per month.

On Thursday, Verizon revealed that it will slow down traffic for heavy data users on unlimited plans if they're hogging the local cell tower. This only applies to subscribers signing up for a new data plan, or renewing a contract. Since the unlimited data plan is required for the iPhone, Verizon is reserving the right to throttle all iPhone traffic.

It also said it will conserve data capacity by recoding all online video requested by data subscribers. It said the effect on image quality should be minimal.

[Associated Press; By PETER SVENSSON]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.