Wonder where is the revenue from all that Android sales going?
Despite a strong lineup of smartphones powered by Google's operating system, Verizon Communications on Friday reported a 25 percent drop in profit and a slowing growth of new customers in the third quarter. The company cited pension settlements resulting from layoffs and voluntary departures as the main reason for the smaller profit. Net income dipped to $881 million, or 31 cents a share, compared with $1.2 billion, or 41 cents a share, reported a year ago. Excluding the pension-related charges and acquisitions, including the sale of four million phone lines to Frontier Communications, Verizon's earnings were 56 cents a share - beating the expectations of Wall Street analysts by 2 cents. Verizon Wireless also struggled to appeal to new customers in the quarter, which ended Sept. 30, adding fewer than its main competitor, AT&T, which is still luring subscribers to its service with the iPhone. Verizon reported a net addition of 584,000 contract customers in the quarter, while AT&T added 745,000. Still, Verizon managed to hold on to its place as the nation's largest wireless carrier, if only by a fraction. Its total subscriber pool increased by nearly 5 percent, to 93.2 million wireless customers. By comparison, AT&T now has 92.8 million consumers. Verizon, based in New York, has suffered from the impact of a steadily declining landline business, the result of more people giving up home phones in favor of cellphones. John F. Killian, Verizon's chief financial officer, said there was "tremendous opportunity" in the number of customers purchasing smartphones and the lucrative data plans that accompanied them. More than 40 percent of the company's device sales are now attributed to smartphones, he said. "We're performing very well in this very competitive marketplace," he said in a call with investors and analysts. Mr. Killian said Verizon's portfolio of smartphones, including several that use Google's Android operating system, were helping to spur sales. "The Droid franchise has gone from nothing a year ago to having a lot of buzz and momentum in the marketplace now," he said. Mr. Killian also said he expected earnings in the final quarter of the year to improve by 5 to 10 percent. He did not discuss reports that the iPhone was coming to Verizon's network. But he said he expected the company to gain a competitive edge against rivals with the introduction of its next-generation wireless network, LTE, which will improve the speed of data-heavy functions like video streaming.