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Verizon Faces Challenges Amid Declining Smartphone Sales
Despite a recent uptick in sales this month, Verizon is grappling with a concerning trend of diminishing smartphone demand in the United States, particularly affecting iPhone sales. Analysts from UBS have highlighted a direct correlation between Verizon’s disappointing first-quarter postpaid phone figures and the overall slowdown in smartphone purchases across the nation.
“The weak upgrade results and nearly stagnant equipment revenues suggest that the smartphone market in the U.S. remains slow, which could impact Apple’s sales, which heavily depend on this market,” stated David Vogt, a UBS analyst.
In its Q1 financial results, Verizon reported a modest increase of 0.7% in wireless equipment revenue, amounting to $5.398 billion—surpassing expectations. This figure, however, aligns with the general decline in domestic smartphone demand. Interestingly, the anticipated tariff implications did not drive subscribers to rush and purchase new iPhones before an impending import tax on Chinese goods took effect, as Verizon observed no significant revenue boost from iPhone sales during this period. Subsequent shipments of iPhones to the carrier largely accumulated in inventory instead of reaching consumers.
The current status of tariffs affecting smartphone prices in the U.S. remains uncertain. Although tariffs on specific electronics, including smartphones, have been suspended, President Trump has signaled potential tariffs on semiconductors, which would encompass smartphones entering the U.S. market. Major U.S. wireless providers have indicated they will not absorb the increased import costs associated with new smartphone models.
Consequently, customers of these networks may face higher prices when acquiring new phones, tablets, smartwatches, and other related devices. The critical question lingering is whether President Trump will continue leveraging tariffs as a form of retribution for various perceived grievances against the U.S. by its trading partners.
Source
www.phonearena.com