AT&T adjusts to a world where the iPhone isn’t an exclusive

Sat, Oct 23, 2010


For as much as the iPhone has done to help Apple, it’s done an equally stellar job helping AT&T attract millions of new subscribers – which is no small feat in the hyper-competitive world of cell carriers.

But the iPhone won’t be an AT&T exclusive forever, and indeed, a number of rumors from increasingly reliable sources are all hinting that the iPhone will come to Verizon in early 2010. And while only AT&T and Apple know precisely when their exclusivity contract expires, AT&T is already preparing for a world where folks will no longer have to rely on Ma Bell in order to get their iPhone fix.

Bloomberg is reporting that AT&T has already begun adding handsets to its lineup of smartphones at an accelerated pace and that they’re also putting thousands of employees through training programs to help familiarize them with smartphones aside from the iPhone.

The company’s lineup this year will have ballooned by about 10 smartphones ahead of the holiday season to more than 20, including ones running Microsoft Corp. and Google Inc. software. Yesterday, AT&T reported the effort is showing early success, saying more than half of new customers chose a device other than the iPhone last quarter, up from 36 percent a year earlier.

That notwithstanding, AT&T will inevitably miss the ability of the iPhone to draw in new customers and generate significant and consistent revenue. Earlier this week, AT&T reported that they activated an astonishing 5.2 million iPhones during the most recent quarter, marking the highest number of activations ever in a quarter. The previous quarterly record was 3.2 million activations during Q2 of 2010, representing an impressive 62% increase in just a few months. More importantly, 24% of those new activations represented customers brand new to AT&T.

But in a world where the iPhone will be available on Verizon, and perhaps Sprint, AT&T is hoping that an extensive selection of smartphones will help them offset any customers who decide to leave for the greener pastures and better reception of Verizon. Interestingly, Bloomberg notes that AT&T is now the sole US carrier to carry devices that feature every major mobile OS – from the iPhone to Android to Symbian to Palm, and of course, BlackBerry devices.

And to help market their wider selection of smartphones, AT&T has plans to revamp its retail stores for a “cleaner look” and retrain thousands of employees to better understand and explain to customers the differences across varying smartphone platforms.

AT&T will undoubtedly survive the end of their iPhone exclusivity, but the measures already undertaken by Ma Bell ahead of that loss simply serve to underscore how important the iPhone was and is to AT&T’s bottom line.



1 Comments For This Post

  1. Scott Says:

    You said, “iPhone will come to Verizon in early 2010.”. I think you mean 2011.

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