Verizon Communications, a leading telecom company, is facing a significant challenge in the current market – customers are not rushing to upgrade their phones as frequently as before. In a recent interview with CNBC, Verizon CEO Hans Vestberg revealed that the average customer now holds onto their phone for way over 36 months, compared to the previous norm of upgrading every year.
This trend is likely influenced by the current economic conditions, with many consumers opting to save costs by sticking with their existing devices. Despite Verizon’s efforts to incentivize upgrades through promotions and extended payment terms, customers are showing a lack of urgency to upgrade, even after completing their payment obligations.
However, the landscape may soon change with the introduction of new phones by Apple featuring advanced artificial intelligence (AI) capabilities. These cutting-edge features may require users to upgrade to the latest iPhone models to fully utilize their functionalities, potentially kickstarting a new wave of upgrades in what some experts are calling a potential supercycle.
For Verizon, a surge in upgrade volumes could be a much-needed boost for its business growth, as reflected in its recent financial results that cited lower upgrade volumes as a contributing factor to its modest revenue increase. With a high dividend yield and the possibility of a growth catalyst on the horizon, Verizon could become an attractive investment opportunity for those seeking steady returns in the long run.
While Verizon may not be a high-growth stock, its stable income potential and upcoming developments in the smartphone market could position it favorably among investors looking for reliable long-term investments. As the company looks to capitalize on evolving consumer trends and technological advancements, it may soon regain momentum in the market and attract renewed interest from shareholders.
