iPhone on Verizon: AT&T is dreaming, and some advice

Friday, July 2nd, 2010 | Business | by

An article on Bloomberg Businessweek quoted an analyst, Timothy Horan:

“We are very confident about our position with exclusivity or without,” Mark Siegel, an AT&T spokesman, said in an interview. “We’re not dependent on a single smartphone to be competitive, we offer a lot of great devices.”

About 70 percent of AT&T’s customer base is in a Family Talk plan, which has a high rate of retention, Ralph de la Vega, the carrier’s head of wireless, said in May.

“For Verizon, it will largely be selling the iPhone to existing customers,’”

That’s nice.  Glad you just got a nice big check from AT&T, enjoy the July 4th weekend spending it.

Try talking to iPhone users.  We hate AT&T.  Not a little, we hate them vehemently.  Whether it is appropriate to hate them, is debatable.  With recent iPhone reception issues, maybe Apple is partly to blame for the signal problems we have all been having for the last THREE years.

I’m glad AT&T is so sure of themselves, “So you won’t want to opt out because of the termination fee and in two years hopefully you’re happy with your service and you don’t want to switch.”  We hope you’re happy, if you’re not, we hope the $325 termination fee is enough to keep you in.

Lets look at the demographic.  Most iPhone users are relatively well off.  $325 is not enough to scare them away from upgrading every year to a new phone, when the previous phone works just fine.  Do analysts / AT&T really believe the $325 (minus $10 for every month of service) will actually keep iPhone users?  These aren’t the standard cellular demographic.  My cell bill every month is around $190.  After a year, my termination fee is $205, that is just 1 month’s worth of service.

If you are considering getting an iPhone 4, and know you will upgrade to Verizon, DO THE MATH.  You will save $100 now to extend your current 2 year contract (I think I have the numbers right), and save $200 to get a new 2 year contract.  Buying the phone now, means you will have about 6 months worth of service before the Verizon iPhone is out.  Termination fees will be around $265.  Make the smart move, do you buy a phone and save $100 now, to pay $265 in January?

Remember, the current iPhone 4 will NOT work on Verizon.  You will have to buy a new one (and I’d expect it to actually be called iPhone 4G, just a hunch).

AT&T is going to be reeling in pain from the mass exodus of iPhone users.  I would be surprised if they still have the level of crappy service now, after they cannot afford all the “partner” contracts.  Verizon will do much more than sell iPhone’s to existing customers.  They will gain many customers from AT&T (which is a double win, AT&T loses what they gain), upgrade cellular contracts for users waiting for the iPhone, and eliminate the only “cool” thing about AT&T.

In my opinion AT&T is more than just an iPhone company, but not much.  They will not be a major competitor after losing iPhone exclusivity.

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1 Comment to iPhone on Verizon: AT&T is dreaming, and some advice

Jackson Williams
July 5, 2010

I am on the Big Red right now, and have been since I got my first dumb phone. and now I currently have the Droid. Since the iPhone came out, we have heard rumors of “the iPhone is coming to Verizon!! OMG!!! LETS PARTY!”. My girl friend heard roumors before the iPhone 4 came out that it would be verizon….I told her dont get your hopes up…and sure enough, it wasnt, and I was the one getting fussed at because i was right. I take these rumors lightly…as it would be nice to have a iPhone on the big red…I think that I would stick with the android OS.

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