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"I do have trepidation about switching from Verizon to AT&T, but I figure Steve Jobs wouldn't have made the deal if he couldn't back it up," she said. "Verizon has one of the largest networks, but AT&T has the iPhone."
The 36-year-old, who owns a graphic design business with her husband, said she needs the iPhone for e-mailing, Web access, and sending and receiving files--all functions she could easily do with another device like a Treo or BlackBerry, which are already sold through Verizon Wireless. But as a Mac user for more than a decade, she admits she is drawn to anything created by Apple and Apple CEO Steve Jobs.
"I was going to have to break down and buy a BlackBerry," she said. "But when they announced the iPhone, I decided to wait."
It's customers like Miller AT&T's competitors--Verizon Wireless, Sprint Nextel, and T-Mobile USA--should worry about. According to a recent poll conducted by M:Metrics, roughly two-thirds of people interested in buying the iPhone are not currently AT&T customers, but they say they're still willing to switch carriers to obtain the phone. AT&T will be the exclusive carrier of the iPhone.
"The data we have suggests that this is going to work as a customer acquisition strategy for AT&T," said M:Metric Senior Analyst Mark Donovan. "The market has matured to the point where carriers are stealing subscribers from each other. And a cool new phone like iPhone has certainly generated a lot of interest."
News.com Poll
The iPhone, announced in January, has been one of the most widely hyped gadgets ever to go on sale. Jobs says he expects the company to sell 10 million iPhones in the first 18 months. By contrast, Research In Motion has sold only 14.6 million BlackBerry devices since 2000. The company has ramped up sales recently as it targets the consumer market, selling 6.4 million devices during the 2007 fiscal year, which ended March 3, 2007.
Interest among consumers certainly seems piqued. AT&T CEO Randall Stephenson in March said more than a million people had inquired about how they can get their hands on the new iPhone. People in Manhattan are already lining up for the iPhone days in advance of its sale.
If the hype lives up to expectations, the iPhone could help AT&T boost subscriber growth, just like the Motorola Razr helped boost subscriber rates when Cingular Wireless (now called AT&T) had a nine-month exclusive deal to sell that phone. Motorola, which now offers the phone through every major U.S. carrier, recently said it has sold more than 100 million Razrs since the product was launched a few years ago.
But what could be a windfall for AT&T will likely mean bad news for competitors. More than 76 percent of the U.S. population already owns a cell phone. And AT&T makes up only about a quarter of those subscribers, so many of those interested in the iPhone would have to switch their service to use the phone.
Sprint Nextel vulnerableWhile all three major carriers are likely to see some defections, Sprint Nextel will likely be most vulnerable to fallout from the iPhone. The company lost 220,000 post-paid monthly subscribers--customers who pay monthly--during its first quarter, the third quarter in a row it saw losses of these highly valuable customers. Most of these defections were to competitors. Sprint along with T-Mobile have also consistently had high churn rates, or rates at which people cancel their service. At the end of the first quarter of 2007, Sprint reported a churn rate of 2.7 percent. T-Mobile's churn rate was 2.6 percent.
According to M:Metrics' survey, subscribers from Sprint and T-Mobile were also the most likely to say they would switch providers to get the iPhone. About 12.5 percent of T-Mobile customers and 8.1 percent of Sprint customers surveyed expressed a high interest in the iPhone.
Sprint is also vulnerable because it has spent a great deal of money and effort marketing its advanced 3G data services to tech savvy individuals.
"Sprint tends to have the most enthusiastic data users," said Charles Golvin, an analyst with Forrester Research. "These are early adopters, and they're also the ones likely to be interested in the iPhone."
Indeed, the most valuable piece of Sprint's business is its 3G EV-DO network. In the first quarter, it generated $1.2 billion from wireless data services, up 44 percent from the previous year. Data contributed about $9.25 or 16 percent of Sprint's total average revenue per user for the quarter, which was about $59.
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during the next two years? Or has it left itself a bit of wiggle room
to introduce products with other carriers?
themselves that the iPhone phenomenon is merely the result of
style or Apple fans. Style is nice, and some people will buy
whatever Apple sells, but most people are interested in the
iPhone because it delivers where all of its competition fails:
usability.
Anyone that wants to compete with the iPhone had better be
focusing on quality software, starting with the user interface.
Unfortunately, none of the iPhone's competitors have any
experience building a quality user experience.
little machine. EVDO, WiFi, BlueTooth, flip out keyboard,
speakerphone, SD card expansion, etc. It works great with
Exchange, and it's easy to add software. The big problem is
that the UI is atrocious. I've owned over a dozen Macs and two
Newtons. The Newton MessagePad in 1992 had a better
interface than this thing. The best software for it is open source
stuff (like gsplayer, though it has UI issues). And Sprint loaded it
with crapware (but Google for how to eliminate this stuff).
It's really a good thing for the mobile ecosystem that Apple's
getting in the business. It's going to force a lot of change,
either through imitation, innovation or Chapter 11 (or whatever
Korean or Chinese tax code calls it).
Charles
Perhaps you may want to wait until the product is actually out before making claims you can't back up.
It will really help with your credibility which is in serious question with comments like these.
ago (ok a different ATT than today, but they chose the name, so
they get the rep) tried to screw me over for $3/mo. because I
never made long distance calls (mobile is free). So, I dropped
them as my land line LD carrier. That was fine, except they KEPT
ADDING THEMSELVES BACK. This took way too much of my time
to correct, and ultimately I got a bill about a year later for $40+
for all these $3 charges I never needed. I wrote them a letter
telling them they would never get a penny from me. So, I guess
no iPhone for me, until they're on Sprint (whose customer
service has been impeccable - really eerily surprising) or Verizon
(great coverage in this town).
The one big issue: my Windows Mobile 5 phone is also teh suck!
hassling ATT to upgrade their network.
But if you are in a wifi area. You have another option. Also, I
wonder how long it will be before skype gets on to the iPhone?
I think it absurd that there is a perception that Americans have that much disposable income, that the ~million inquiries spoken of in the article will morph into one for one purchases. Those calling are most likely not committed Apple fan(atic)s who are already committed. When the reality of a ~$700 migration cost sets in... $500 up front and anywhere from $150 to $250 to break contract... The reality will be far removed from AT&T?s dreams and aspirations.
Monitor the after sale returns. AT&T is such a horribly unreliable network that the real impact of success or failure may come when within the first 14 days, when those who find themselves unhappy with the quality and reliability of the network, seek to recover their losses, and return to what they know to be a dependable carrier.
Lastly, but possibly most importantly is the culture of sales representatives in AT&T stores that I have frequented. I feel, based on personal experience and the way I was treated by AT&T in multiple regions in multiple stores (and never will again)... that this one element, may be a turning point for some users who have become comfortable with being treated like a person instead of like a credit card.
And you know, just like anyone/everyone else, I could be way off base. It all remains to be seen and just as always, AT&T may continue to succeed (with the iPhone product) in spite of themselves.
Sue! They have no choice as they are sworn to profits by the charter of a corporation. That would be a bold platform for an Independent party to run and encourage co-ops, to play the role of curbing corporate rape and pillage. The government cannot control the volition of greed in the corporation. It is part of the animal by nature. Co-ops could regulate the corporate animal to play fair to catch it's prey. I have a Treo 650 which is a year old. It has been like pulling teeth for me to get a company that rhymes with horizon to upgrade me when I've been a customer for 12 years. I waste so much time with them fighting for equipment that is dated. I want the iPhone now. I'm not going to sign a (2) year agreement with antique equipment. Bring back customer owned companies!
locked into another carrier?
thing analysts have not considered is how spending millions of
dollars to promote the iPhone will alter AT&T's relationships with
other vendors (and even altering their voice mail API system
wide but only telling Apple how to use the new API). If I were an
executive at RIM or Motorola, I would be much more demanding
of sales and technical support from AT&T than I have been in the
past. If that support does not come, I would be prone to ship my
best products to Verizon first. This could leave AT&T with a
shortage of the devices business users demand which could
result in a loss of business customers to other carriers. There
are always unintended consequences.
Now I love music as much as the next guy, maybe more. While
the iPhone may be a great iPod, the iPod is a true audiophile's
nightmare of bad compression and cheap d/a converters, really
a good dolby C cassette sounds better and when I see people
hook their iPods up to $2000 stereo systems I just have to
laugh, so I am not about to drop everything great about my
phone to get an iPod (like my phone takes great pictures of
moving children, if I don't want to type on my little keyboard I
can make a video message and mail it off on a high speed
network, google maps knows where I am, a home button that
always takes me to the homepage, and I have a second battery
that I can pop in if my extended battery dies-- never happened
yet). I would have to give up a lot to get a pretty lousy audio
experience and a bad case of shutter lag-- and that is no way to
listen to Keith Jarrett at the Blue Note or the last recording John
Hicks made before he died or to take pictures of your toddler's
first time on the big kid's swing.
- Boo--hoo-hoo
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by oxtail01
June 29, 2007 11:59 PM PDT
- To all you cry babies knocking ATT. GET OVER IT. They and Apple are going to make a killing over the next few months and if you want to get in on the nice new toy, well you ain't got no choice but accept ATT. So, either accept it or go and buy something else and cry in the corner. This ain't about you, it's about how Apple and ATT teamed up to make a killer product (even though I won't be buying one any time soon) for all the wanna-bes that can't do without the newest and the greatest (poor souls like you). Cry, cry cry - blahh, blahh, blahh - your pathetic whining is sickening.
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