Why Verizon Turned Down Apple

[Kupe#WP]

According to this Piper Jaffray analysis, over the 2 year life of an iPhone contract, AT&T ends up paying Apple $432 per phone for the privilege of having Apple as a partner. When combined with the estimated profit Apple makes on each iPhone sale, the net income for each iPhone is estimated to be ~$565/phone.

I wonder who gets to keep the proceeds from an early termination fee? If it's AT&T, I wonder how soon they'll start encouraging their iPhone customers to switch phones (if not carriers) to regain profitability.

I wonder when (if) AT&T figured out how little (if any) they're earning off the iPhone?

I no longer wonder why the most profitable US wireless provider politely turned Jobs down.

 

[Mike Overbo]

Really? I still wonder. AT&T gets to push support costs off on Apple, AT&T doesn't have to lose money off a subsidized handset sale (they can instead pay Apple some of the $$ they would have used on the subsidy), and add hundreds of thousands of customers all at the cost of other carriers.

 

[Iceman6]

Verizon has already said that they turned Apple down because they didn't want to give up that much control over a handset's capabilities.

 

[cardfan]

AT&T was smart to do this. Their network is crap and the iphone gave them a big lift. That advertising was golden.

IMO, if Verizon could go back in time, they'd be singing a different tune.

 

[marcol]

IMO, if Verizon could go back in time, they'd be singing a different tune.

Wouldn't be at all surprised.

Record Wireless Subscriber Gains. AT&T achieved a net gain of 2.0 million wireless subscribers, in the first full quarter since the introduction of Apple Inc.'s iPhone, the highest third-quarter subscriber increase in the company?s history. Versus AT&T?s gain in the year-earlier third quarter, net subscriber additions were up 46.8 percent. Third-quarter retail postpaid net adds totaled 1.2 million, up 30.6 percent compared with postpaid subscriber additions in the year-earlier quarter.

http://www.macdailynews.com/index.p...er_atampt_reports_record_net_gain_of_2m_subs/

 

[AZMerf]

You hear of a lot of folks switching to AT&T because of the iPhone (I will be one of them). How many are switching to Sprint because of the Instinct?

 

[abalboa3]

Just to be clear the Instinct is on Sprint, and I don't know anyone switching to Sprint for it. Verizon has the Voyager, and same goes for that one. I had the Instinct for about 2 weeks, just returned it today, and it in no way compares to the software on the iPhone 2G or 3G.

 

[AZMerf]

Opps. I meant Sprint. They are all the same anyway.

 

[LOdam7]

I bet they are kicking themselves for it now.

 

[supermum]

They are losing me as a customer... and I am sure I am not the only one. I am wondering what the percentage of new customers the iPhone brings in from other companies. Do you think they will eventually post this? Did they last year?

 

[anon(1217668)]

They are losing me as a customer... and I am sure I am not the only one. I am wondering what the percentage of new customers the iPhone brings in from other companies. Do you think they will eventually post this? Did they last year?

Gonna lose me too, never had a problem with them on regular phones or my Treo, but when I got a BlackBerry, it absolutely sucked on their network, no evdo signals (that was if I was lucky enough to get signal period) reps knew nothing and kept screwing up my plan...

 

[Kupe#WP]

They are losing me as a customer... and I am sure I am not the only one. I am wondering what the percentage of new customers the iPhone brings in from other companies. Do you think they will eventually post this? Did they last year?

According to this link, ~25% of AT&T's iPhone customers were "switchers." That link (and others like it) are from late last July. I haven't seen anything newer.

 

[supermum]

So, for arguments sake, say that the majority of the 25% are still current AT&T subscribers because they had to at least sign a year contract (which is up in July) if not a two year contract.
I would say more than 25% are going to jump ship (from another carrier) this time because:
1. There is not the fear of being an early adopter (there are many people out there like that)
2. The iPhone is competitively priced (the Voyager was $299 or $250 when it came out and isn't 1/2 the phone).

My guess is that Verizon, Sprint, and TMobile are going to have to step up their game in other ways to keep many customers. While THEY think they are going to be able to do it with iClones, I disagree. The only way they are going to increase their user base (by catching those NON-iPhone users) is to drop prices on rate plans.

Maybe it is about time for Verizon to think more about crippling their phones using the crappy UI they install...

Just my opinions

(Thanks Kupe for the info!)

 

[AZMerf]

crippling their phones is to me, Verizon's biggest sin. Instead of providing good service etc, they try to make it up by charging for services (GPS for example) that exist in the phone already. That and the fact that in the past they've always had the lamest phones.

 

[whmurray]

You hear of a lot of folks switching to AT&T because of the iPhone (I will be one of them). How many are switching to Sprint because of the Instinct?

lol. The only people interested in a Sprint iPhone knock-off are already Sprint customers.

 

[hobyphone]

What exactly does Verizon install on their phones? I've read that quite a few places, but I've never read exactly what they put on there.

Just wait until Apple's exclusivity deal with AT&T runs out, when Verizon and the rest of them start marketing the iPhone like crazy.

 

[whmurray]

What exactly does Verizon install on their phones? I've read that quite a few places, but I've never read exactly what they put on there.

Just wait until Apple's exclusivity deal with AT&T runs out, when Verizon and the rest of them start marketing the iPhone like crazy.

Not sure that I understand the question. Verizon uses the CDMA protocol and some proprietary software. CDMA has the potential to be more power efficient than the more popular GSM. It is also more resistant to interference. However, it lacks the portability and freedom inherent in the use of the SIM card. It lacks the international portability inherent in GSM. While, in theory, any CDMA phone/radio can operate on any CDMA network and while Verizon and Sprint do have roaming agreements in some markets, in practice, Verizon phones are limited to the Verizon network.

For T-Mo, it is mostly an issue of the agreement and software. Some iPhones have been cracked to work on T-Mo and other GSM carriers. However, not on Verizon or Sprint. On these networks it is a hardware, not a software, issue. iPhones do not have CDMA radios. The absence of such chips is a bigger issue than the exclusivity agreement.

 

[BB-fan]

So, for arguments sake, say that the majority of the 25% are still current AT&T subscribers because they had to at least sign a year contract (which is up in July) if not a two year contract.
I would say more than 25% are going to jump ship (from another carrier) this time because:
1. There is not the fear of being an early adopter (there are many people out there like that)
2. The iPhone is competitively priced (the Voyager was $299 or $250 when it came out and isn't 1/2 the phone).

My guess is that Verizon, Sprint, and TMobile are going to have to step up their game in other ways to keep many customers. While THEY think they are going to be able to do it with iClones, I disagree. The only way they are going to increase their user base (by catching those NON-iPhone users) is to drop prices on rate plans.

Maybe it is about time for Verizon to think more about crippling their phones using the crappy UI they install...

Just my opinions

(Thanks Kupe for the info!)

It was actually $400 last I time I saw it. It is now $250. My sister has it. Its not a bad phone at all, but its not what I want. She wanted an actually keyboard. Different strokes for different folks.

 

[abalboa3]

While the Voyager is a nice phone, one of the guys at work has it and loves it, it is definitely not an iPhone. It still uses Verizon's crappy software, and the touch interface is no where near as responsive as on the iPhone.

I don't think people are leaving AT&T to go to Verizon for a Voyager, or to Sprint for an Instinct. These other carriers should be working with manufacturers to develop something that is innovative but not necessarily an iPhone clone.