New reports are suggesting the Motorola Droid is nearing 1,000,000 units sold while the Cliq sales are slipping. This should come as no surprise really as the Cliq is a first generation device based on the outdated Android 1.5 and the Droid is the first phone to feature Android 2.0. The Droid is also offered on Verizon Wireless (89 million subs) and the Cliq is featured on T-Mobile (34 million subs).
Even though the Motorola Droid has been out less than a month, it accounts for nearly 25 percent of the Android traffic to our site. Admob data has also confirmed this by listing the Droid as the second most used Android phone behind the HTC Dream (G1).
Broadpoint AmTech analyst Mark McKechnie first estimated the Droid would move 600,000 units this holiday season, but he has revised those estimates to 1 million. “According to our survey, some higher-traffic Verizon stores in major cities may be selling over 100-200 Droid units per week since the launch,” he said. “The bulk of Motorola’s smartphones this quarter will be at Verizon.”
However, the success of the Droid is coming at a cost to Verizon. They are spending in excess of $100 million on one of the largest marketing campaigns I have ever witnessed. Over the past month I have seen non-stop television, radio, internet, billboard, and print ads. Verizon also has about a $350 subsidy on each phone ($549-199).
When you add up the advertising costs and subsidy, Verizon is paying almost $450 to acquire each Droid customer. I guess when you are the largest United States carrier, you can afford to do that. Verizon also knows that each Android phone is attached to a data plan so the influx of customers should help increase their ARPU (average revenue per user). In an order to offset the high subsidy costs, Verizon recently raised (doubled) their early termination fee to $350.
