--Apple's iPhone continues to dominate smartphone market
--Telecom companies want a third option besides Android, Apple phones
--This could bode well for Microsoft and its Windows Phone mobile operating system
By Dan Gallagher
As Verizon Communications Inc. (VZ) and Nokia Corp. (NOK, NOL1V.HE) reported their first-quarter results on Thursday, one fact was painfully clear: the continued dominance of Apple Inc. (AAPL) in the fast-growing smartphone market.
Verizon shares were recently ahead 1.5% at $38.24 after the wireless giant reported a 17% earnings gain for the period. About 734,000 new subscribers were added for the period, helped along by the iPhone, which sold about 3.2 million units at the carrier.
Sales of LTE-based smartphones, most of which use the Android operating system from Google Inc. (GOOG), totaled 2.3 million units for the period.
Meanwhile, Nokia shares were recently down 2.5% to $3.87 after the Finland-based wireless phone maker reported a deeper-than-expected loss for the period as total handset shipments fell by 24% from the same period last year.
Nokia said it sold more than two million units of its Lumia smartphone during the quarter, its first line based on the Windows Phone mobile operating system from Microsoft Corp. (MSFT). Apple, by contrast, is expected to report unit sales of more than 30 million for the iPhone for the same period when it reports its results next week.
"We were clearly disappointed with our performance in [the first quarter]," Nokia Chief Executive Stephen Elop said during a conference call with analysts Thursday. "It reflects both the transition that Nokia is currently undergoing as well as the increasing competitive pressures within our industry."
Big iPhone sales are a mixed blessing for carriers such as Verizon and AT&T Inc. (T). The popular device helps the carriers attract customers, but the carriers have to pay high subsidies to Apple to sell the device, which pressures profits.
Asked about the subsidies during a conference call Thursday to discuss earnings, Chief Financial Officer Fran Shammo said Verizon looks at all of its subsidies "on a handset-by-handset basis," but it was only one aspect of its profitability.
He did voice support for Microsoft's Windows Phone platform, though, as carriers want a strong third ecosystem along with Android and the iPhone, especially as the BlackBerry platform from Research In Motion Ltd. (RIMM) is weakening.
"I do think, though, that it is important that there is a third ecosystem that is brought into the mix here, and we are fully supportive of that with Microsoft," Shammo said.
-By Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com
Order free Annual Report for Research in Motion Ltd.
Visit http://djnweurope.ar.wilink.com/?ticker=CA7609751028 or call +44 (0)208 391 6028
Order free Annual Report for Nokia Oyj
Visit http://djnweurope.ar.wilink.com/?ticker=FI0009000681 or call +44 (0)208 391 6028
Order free Annual Report for AT&T, Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US00206R1023 or call +44 (0)208 391 6028
Order free Annual Report for Apple, Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US0378331005 or call +44 (0)208 391 6028
Order free Annual Report for Google, Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US38259P5089 or call +44 (0)208 391 6028
Order free Annual Report for Verizon Communications, Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US92343V1044 or call +44 (0)208 391 6028