Is the iPhone the Key to T-Mobile’s Future Growth?
If T-Mobile (NYSE:TMUS) or Apple (NASDAQ:AAPL) ever had second thoughts about launching the iPhone on T-Mobile’s network, it’s good that the companies stuck with the decision they made. Since April 12th, when the iPhone was released on the network, over 500,000 units have been sold — in less than a month.
T-Mobile released the figure along with its quarterly report. While the company’s revenue slid 7 percent year-over-year, the explosive sales of the newly-released iPhone lend hope to the idea that the carrier will be able to pull those numbers back up. Although adjusted earnings of $1.2 billion was also down over 7 percent from last year, it does represent an increase over the fourth quarter.
It’s not like the carrier has been sitting idly by, watching its revenue slim down. The addition of the iPhone to its roster was only the cap on a quarter that also saw the completion of a merger with MetroPCS, and perhaps just as significantly, the eradication of phone subsidies, an industry function that is heavily used as a crutch to move high-end phones.
As the fourth-largest carrier in the country, T-Mobile is constantly facing struggles in the wake of the largest three, especially as coveted data resources are snapped up by the largest buyers. To help combat this, T-Mobile has been investing billions in its LTE infrastructure to sharpen its competitive edge.
“Our first quarter operating metrics and financial results are showing positive impact from the changes we began making in the fourth quarter. CEO John Legere said in a statement. He also noted that the company added T-Mobile branded customers for the first time since early 2009. “Things only get more exciting from here, having brought T-Mobile USA and MetroPCS together to create the wireless industry’s value leader and premier challenger.”
Undoubtedly, the iPhone will play an instrumental role in T-Mobile’s plans moving ahead. Though late to the iOS game, the demand exhibited in the short time frame since its launch has proven that there are still interested users who have not yet switched carriers and can help generate business for T-Mobile.