iPhone: for Americans, AT&T just won’t cut it
By Triston McIntyre
There’s been enough hype surrounding Apple’s release to sedate a small sperm whale, we have to admit. It seems fairly clear that Apple will have one of the hottest products of all time on the market come June… the last question remaining is this: is the Apple iPhone strong enough to push AT&T to the top, or will US consumers demand compatibility with other networks?
Cell phone networks in the US have a very dynamic relationship between each other. As I see it, the market breaks down this way:
1. Verizon sits cozily atop the US cell network market due to outstanding range and performance nationwide. Thus, they can afford to charge more than the other cell phone networks for service; also, although they do carry some quality phones, many might say they don’t receive all the “hot” phones.
2. T-Mobile lands debatably second behind Verizon for outstanding customer support, great service (in metropolitan areas), and a decent range of phones. However, the prices T-Mobile charges for phones are higher than any across the network board, and they tend to release phones substantially later than other services.
3. Cingular (now AT&T) does not have the best service. A few years ago when it became Cingular, the merger caused an overload of cell phone circuits and towers, and many people experienced (ironically) all the dropped calls or busy networks Cingular’s advertisements now claim can only be avoided at Cingular. I still find the service to be poor in comparison with the above two; however, AT&T generally gets the “hot” cell phones and releases them at the best prices. Hey, when your service is sub-par, you gotta do what you gotta do (see iPhone deal with Apple).
4. All the rest. I won’t even go into detail here, however it is worth noting there are actually other service providers we can all acknowledge like young children, saying, “Aw, look at the widdle baby…someday you’ll grow up to be big and strong like your big brothers (as long as you get rid of that damned chirping…I don’t care who you are, that is only annoying, and walkie talkies are for the wilderness)!”
That being said, it is quite obvious AT&T worked hard to secure the deal with Apple that lent exclusive service rights to them for iPhone use. By doing so, they hope to win a substantial amount of customers, customers who are with other services for very good reasons.
If the iPhone release is all its cracked up to be, they very well may move up in customers by a substantial amount…or will they?
Though an article by Macworld recently documented a survey of European consumers that revealed 25% of current iPod owners would definitely switch carriers to possess the coveted iPhones, is that at all reflective of the US market?
I am not very familiar with the European market in regards to cell phone service providers, but I can say this about American users: much like those crazy Europeans and soccer, many of us live and die by our carriers, am I right?
If you don’t believe me, try convincing your coworker to switch from T-Mobile to Verizon in your next casual conversation; much like politics, you might see the hairs on the back of his or her neck stand up, and he or she might adopt a Muai Thai kickboxing stance in preparation for the bloody provider battle you are about to engage in.
Maybe its something in American blood, like that annoying American affinity for Ford vehicles, which time and time again prove to be less reliable than many unicycles; we can’t explain it, but people continue to buy them.
I would dare say, unlike European consumers, Americans are quite used to having things “our way” (see Burger King for details); though AT&T might have exclusive rights now, there’s no way they can possibly maintain exclusive control, right?
Regardless of AT&T’s strong plan to achieve network superiority by exclusively releasing the iPhone, thickheaded Americans won’t stand to see it released on only one lesser network, and the one universal constant besides death and taxes? Americans’ defiance until we get our way (see Revolutionary War).
Related:
Stumble It!
Entry was posted
on Wednesday, May 16th, 2007 at 1:57 pm
under 
Print This Post
Read more entries by Triston McIntyre.
May 16th, 2007
I’m reluctant to burst your bubble, but if you watch Steve Jobs’ iPhone keynote speech at Macworld Expo, he makes it pretty clear that AT&T has a three-year exclusive with the iPhone. That’s not going to change anytime soon. While it’s true that people may prefer one network over another for often very intrinsic reasons, their preference for hardware and software and user experience will likely trump that in the future, when actually given that choice for the first time. If you want an iPhone, and many many many people will, you will move to AT&T in the US. Period. End of story. The real question will be this: what would you prefer–great coverage with mediocre/crappy hardware and software, or a great phone and user experience with mediocre/adequate coverage? Additionally, which would you prefer: (relatively) fast 3G internet with an unbelievably bad web experience (hello WAP, mobile Opera), or a full, rich HTML web experience with 2.5G and often faster WiFi? I suspect that, by the end of 2008, far more than 10,000,000 people will have voted with their wallets, for Apple and AT&T.
May 16th, 2007
David,
Much thanks for your comments; I am aware that AT&T have exclusive rights for that period of time. It really is a shame. Either way, I was just voicing my opinion that most Americans won’t be jumping ship to join AT&T for the mediocre service and great phone when there really are other great phones with great service providers. Good insights, though.
May 16th, 2007
Sheesh… Of course “most Americans won’t be jumping ship to AT&T”. That would be silly. You’re creating an impossible standard for success for the iPhone that Apple has never even hinted at. Even if a tiny, infinitesimal, miniscule fraction of Americans “jump ship for AT&T”, Apple will have a huge success on their hands. Everybody’s acting like the iPhone needs a 50% market share and to put all of the other networks out of business to be successful, when Apple’s very public target is 1% by the end of 2008. Yes, 1%. As far as there being “other great phones with great service providers” out there, frankly, I just have to shake my head in wonder.
May 16th, 2007
I’m most definitely not one of those blogger’s who are saying that the iPhone is a failure if it doesn’t end up in every home; honestly, I could care less. I think it will be interesting to see how the iPhone changes (or doesn’t change) the power balance between carriers. If it doesn’t, no surprise, if it does, we’ll write about it. Many times readers take the intent of an article past simple hypothesis to personal conviction of the writer…honestly, I like a full, tactile qwerty keyboard myself
If Apple is expected to be the largest electronic release to date, you have to admit it should shake things up…just some speculation for you.
May 16th, 2007
You have some interesting insights, but I’m not sure how you’ve ranked the carriers. Verizon and AT&T are neck and neck — Verizon reported 61 million subscribers or so at the end of Q1, AT&T reported 62 million. Sprint/Nextel reported 53 million. T-Mobile is less than half AT&T’s size at 26 million. Apple seems to have paired up with the largest U.S. carrier precisely to minimize the need for people to switch.
Are you ranking them in some other way? From here, it looks like AT&T already does cut it for a big chunk of the American market. I’m a former pre-Cingular AT&T customer. I went to T-Mobile for awhile. Now I’ll go back when the iPhone is released. Does anyone really adore their carrier? I’ve used a number of providers and have always found everyone’s service to be merely adequate.
May 17th, 2007
I’m curious what information you used to rank the carriers? Personal insight? Coverage Maps? It may be worthwhile to provide some data to back your article up beyond the “facts” you’ve provided. Some of these networks are proprietary and can’t support outside the US either.
May 17th, 2007
FYI; TMobile’scoverage is only as good as what it is b/c they have roaming agreements with AT&T to use AT&T’s towers in many areas.
May 17th, 2007
Thanks for the comments, guys. I’ve used all three phone services at one point or another, and those are just my own personal feelings; they aren’t substantiated by customer base as much as personal experience. However, in regards to customer satisfaction, Consumer Reports consistently ranks them generally in a fashion similar to what I have…that doesn’t mean I’m using those facts though. In regards to AT&T having the largest customer base, this is mostly because they’ve undergone a merger within the last few years, and were just recently bought out (Cingular was). T-Mobile’s coverage really isn’t up for debate, because they don’t have their own coverage, per se. That’s one of the great things about T-Mobile’s business plan.
May 18th, 2007
Sorry, you are waaaay off the mark in terms in customer loyalty to carriers. Where fdid y ou get this information from? Consistantly, research by Jupiter. JD Powers, Forrester, and others indicates almost no loyalty by consumers to cell phone carriers. They are viewed as a commodity, all with problems or issues and people jump ship at the drop of a hat. Look at your own experience, you have “used all three phone services at one time or another”. So have I, so have millions. Verizon has solid coverage in most areas but there customer service is just a slogan- “we never quit working for you”. Well actually they do. I removed a data package on my phone in November. Despite monthly calls and promises to personally follow up the next month to make sure it was removed, no one ever did. I finally got the service and fees taken off in April- 5 months later. When the iPhone comes out, do I plan to buy it and jump ship even though I will pay a penalty for early termination? YES! I more solidly believe in Apple’s ability to police Cingular and make sure service and network issues are resolved than I do the carriers to improve themselves. Cingular has a lot at stake and it is a golden opportunity. If they blow it, Apple I am sure has performance guarantees in the contract and can easily cancel the contract and move to another “exclusive” carrier if Cingular fails to perform to Job’s satisfaction. And make no mistake, he is not one to forgive anything that will damage Apple or his brand. I think you are mistaken.
May 18th, 2007
Chris,
Thanks for your interesting insights. I suppose the reason I’ve known people to be true to their carriers is because of all the incentives thrown at them…once a customer establishes a certain amount of loyalty, there’s a large amount of play in their contract, and usually a few little goodies given to maintain service loyalty. I won’t be terminating my contract for the iPhone, but if any of you are considering doing this, I would first recommend Amazon.com…they have the best cell phone deals, bar-none, for new service agreements. Check them out.
May 20th, 2007
I think cellphone service is highly variable no matter what carrier you use. Here in Pittsburgh, Verizon is undeniably the best, but I don’t have a clear sense for the order beyond that.
At the same time, Verizon is also the company that’s trying to sue Vonage to death instead of competing with them, and that just isn’t cool. Furthermore, the want you to sign up for their various ridiculously expensive music and video services, and that pretty much prevented an iPhone deal. Apple may - well, does - want to sell us their own service monopoly, but at least it’s not $3 per song.
People do have some loyalty to cellphone providers, but it’s a bought type of loyalty, not a “these people are cool” loyalty. In other words, you can normally make free calls and text messages between phones with the same provider, so if you can get your friends to use your provider, the provider’s golden. A cute teenager friend of mine told me that people would ask her “Are you in?” referring to the “Join in” Verizon slogan, and it was a big social problem that she was with Cingular because her friends couldn’t call her free.
I switched to T-Mobile’s network to get the Sidekick, which I really like a lot, but they haven’t done a truly major update to it in quite some time. I won’t have any trouble switching to AT&T’s network for the iPhone. It doesn’t hurt, of course, that I don’t like talking on the phone that much, and want to use it mainly as a data device for which it should be just about perfect. If you want a data device that’s well designed and offers a seamless web experience, the iPhone’s pretty much your only choice.
D
May 22nd, 2007
My experience says that Verizon, who also grew by acquisition (remember GTE Mobile Net, etc.) and Cingular, (formerly AT&T, Cellular One, and now AT&T again) are the same. T-Mobile customer support is better, but with the exception of WiFi Hotspots in Starbucks, their coverage stinks. I have Verizon currently and my contract expired 2 months ago and I for one am ready to jump ship for the iPhone. Even if all carriers, were carrying the iPhone, unless, they decided to make the changes to there network, that Apple required, then you would be dealing with a castrated iPhone. If rumors are correct, Verizon had that opportunity, but said no. Because of that decision, I will take my business else where. Maybe if the iPhone, does do well, Verizon will get the message and modify their system, and then we can use the next generation iPhone on their service because, “thickheaded Americans won’t stand to see it released on” a “lesser network, and the one universal constant besides death and taxes? Americans’ defiance until we get our way.”
September 6th, 2007
Cell Phones Tracer
I couldn’t understand some parts of this article, but it sounds interesting
October 5th, 2007
World Wide Web Resources
I couldn’t understand some parts of this article, but it sounds interesting