Wednesday, September 22, 2010
What happens when AT&Ts iPhone exclusivity ends?
Speculations have been around for a while, about what happens when AT&Ts contract guaranteeing AT&T exclusive rights to the iPhone. Now Credit Suisse has conducted a survey to try to get some more certainty to the topic. According to the survey 63% of the iPhone owners would stick with AT&T. The remaining 37% would split up like this: 23% switch to Verizon, 3% join Sprint and 2% would prefer T-Mobile. Thinking back to our Spring 2010 classes and the nice maths we did with regards to churn rates I slightly disagree with Credit Suisses assessment of "the damage of losing the iPhone" to be "overblown". For more details about the survey see Credit Suisse's slides.
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There are a number of interesting variables that will seemingly come into play after the initial rush, particularly with Verizon.
ReplyDelete1. How different will the device be when made available on other carriers? Will Verizon force control over the device as they did when the RAZR was finally introduced on Verizon after popular demand?
2. What happens when the speed of Verizon's network fails to live up to its increasingly stratospheric expectations?
3. What effect will the wave of new users have on Verizon's network?
4. What about Droid? How big and immediate will Google's response be?
A major shift is undoubtedly set to occur, but none of the projections I've seen seem to account for such variables. Thoughts?
Point 3 is very interesting to me, the sudden influx of users may be very taxing on Verizon's existing network. I have a friend who works at Verizon and he says that their 4G network is due to roll out in November (if memory serves), 4G LTE I think. That said, current iPhones can't take advantage of 4G tech yet. Are there any CDMA iPhones? Certainly none in the US...I think it's just a GSM phone and so this will require additional engineering and product design.
ReplyDeleteYour first point is also really important because Verizon has been known to cripple great hardware with their customizations (e.g. limited GPS functionality on some Windows Mobile phones), but Apple is extremely protective of their products and I think they'll step in to prevent such manipulation
That extreme protection, according to modern folklore, is what caused Apple to abandon Verizon as their first choice for the iPhone and bring it to AT&T. Knowing Verizon (and what they do to my Windows Mobile Phone, including GPS blocking), I'm somewhat skeptical over Apple's ability maintain their control. One way I see that happening would be if Apple takes the iPhone to Sprint and T-Mobile before Verizon. Given where the iPhone is in its lifecycle, and the ever-growing pressure to release on Verizon, I'd say it's unlikely.
ReplyDeleteIs it naive to hope that Verizon succumbs to Apple's expertise and stops trying to insert their clumsy layer of control over the user experience?
http://arstechnica.com/apple/news/2010/09/verizon-ceo-throws-wet-blanket-on-iphone-rumors.ars
ReplyDeleteawww :(