Ahead of Apple earnings, Verizon latest to signal smartphone slump

Verizon's (VZ) second quarter report this morning is the latest confirmation from U.S. wireless carriers that smartphone sales are slowing. Verizon finance chief Fran Shammo noted that the slump could simply reflect a wait for new, "worthwhile" phones, but research firm Baird views recent data from the carriers as a negative signal for Apple (AAPL) and its iPhone. VERIZON REITERATES SLOWING SMARTPHONE MARKET: This morning, Verizon reported second quarter earnings of 94c on revenue of $30.5B, as compared to estimates of 92c on $30.94B. The company added 86,000 net postpaid phone customers while churn stayed roughly flat at 0.94%, Verizon said. Total postpaid device activations were 9.5M for the quarter, down 4.3% sequentially and nearly 16.2% relative to the prior year period, while just 5.4% of its retail postpaid base upgraded to a new device in Q2, down 180 basis points. Speaking during a subsequent webcast, CFO Fran Shammo stated: "Obviously we saw a similar trend, maybe not this dramatic, in 2014 where we saw a slowdown in the first half of the year in anticipation of iconic phones that were coming up on a two-year cycle. So I think some of it could be that... As far as how do we stimulate smartphone growth -- look, I've been saying for over a year now that smartphone growth is going to continue to slow and we have to look at other areas for that growth." CARRIERS SIGNAL GLOOM FOR APPLE: Baird analyst William Power argued Tuesday that confirmation from Verizon and the other carriers of slowing smartphone sales are not great signals for Apple. Though the trend has been well-discussed, the analyst believes consensus estimates "may not fully reflect the continuing slowdown," posing a risk to fourth quarter guidance. Though he continues to like Apple's long term platform positioning, he remains cautious in the near term until estimates are "appropriately reset for slowing upgrade cycles and global macro challenges." PRICE ACTION: Shares of Verizon are down 2% to $54.72 after its quarterly report, while Apple has edged down almost 1% ahead of its own report this evening.