December 31, 2011, 7:45 AM — It's billed as the nation's fastest wireless network. But it's been slow to attract users. One year after its launch, Verizon Wireless's 4G LTE network has failed to capture the imagination of the cell phone-buying masses, who still prefer the slower-connecting Apple iPhone by large margins.
With data-download speeds up to 10 times faster than previous technologies, Verizon's "fourth generation," or 4G wireless network, would seem to be a hot commodity in a mobile device-crazed world. But a general iPhone inertia, combined with high 4G LTE device prices and the lack of a compelling new "4G-only" application are all possible reasons why Verizon had sold fewer than 2 million 4G LTE-capable smartphones during the first nine months of 2011.
While not exactly a flop, the slow pickup on 4G LTE phones during 2011 signals that Verizon might be a bit ahead of the demand curve for faster wireless connectivity. However, the company's first-mover position in the LTE market might pay off handsomely during 2012, as its more-complete network buildout should give it an edge over competitors--if and when an expected LTE-capable iPhone arrives.
iPhone Inertia and Improved 3G
Right out of the gate, Verizon's 4G LTE generated excitement and buzz as the provider sold more than a quarter-million units of its first 4G LTE phone, the HTC ThunderBolt, in just two weeks after its mid-March debut. But instead of taking off like a rocket, Verizon's 4G LTE numbers went into a much slower climb, adding 1.2 million LTE subscribers in the second quarter, and 1.4 million in the third, roughly split half and half between smartphones and other devices such as modems or portable Wi-Fi hotspots.
Though far from a flop, the 4G LTE sales were also well behind those generated by Apple's iPhone, which only runs on 3G networks in its fastest versions. Verizon, which gained access to the iPhone in February, sold 6.5 million iPhones during the first nine months of the year, compared to a total of about 1.5 million 4G LTE phones. And that's not counting any iPhone 4s sales, which should just increase the gap. According to Apple, there were 4 million iPhone 4s devices sold in the first weekend of sales in October, from Verizon, AT&T and Sprint. So why do the slower iPhones continue to outsell the speedier 4G LTE devices?