[archie]

Apparently; as reported by The Street and reiterated here, AT&T made it very clear during an earnings report conference call that it's going to use Apple's iPhone to get customers from Verizon Wireless by giving away its service for a year and a half to those customers who buy the phone.

[Pearl_Diva]

And what are they going to do for existing customers? **** us off even more?

[archie]

I'm guessing there is something else behind this that we do not see at this point in time. It would probably be the last year and a half but why would they feel the need to offer such an unheard of incentive?

Any thoughts on why this is said to be directed at Verizon? Why not Sprint or T-Mobile? I have a lot of information about Apple in this little head of mine but I don't know jack about carriers. Thoughts?

It was stated that the iPhone would have a 2 year exclusive with Cingular. It was also stated that a new 3G model would be released soon after (about 6 months). Does this mean anything?

[archie]

And what are they going to do for existing customers? **** us off even more?

Don't know.

It could infer that the iPhone call plan would be seperate from the data plan just like everyone else. And maybe they count on the iPhone providing a phenomenal amount of money with the data plan use.

[archie]

It could be that the phone really doesn't need to be subsidized at the asking price (especially with the recent reports of Apple seeing 50% margins). There are only a few other smartphones that are priced higher than the iPhone.

Guess I would rather pay a high price up front than get reamed throughout the year(s) in overpriced services.

This could be part of Apple's demands on Cingular (AT&T). If the service for some reason were not up to par in the iPhone users eyes (maybe a dropped connection as you drive out of range), they would be more inclined to ignore it considering it is free. This would be a brilliant move on Apple's part. Their approach to giving satisfaction with a service from a seemingly uncontrollable third-party!

Brilliant!

[Pearl_Diva]

I'm guessing there is something else behind this that we do not see at this point in time. It would probably be the last year and a half but why would they feel the need to offer such an unheard of incentive?

Any thoughts on why this is said to be directed at Verizon? Why not Sprint or T-Mobile? I have a lot of information about Apple in this little head of mine but I don't know jack about carriers. Thoughts?

It was stated that the iPhone would have a 2 year exclusive with Cingular. It was also stated that a new 3G model would be released soon after (about 6 months). Does this mean anything?

Maybe because Verizon is Cingular's CDMA equivalent? Similar prices and lots of coverage.

[archie]

Hasn't Sprint been around longer? How could Verizon have more coverage?

[archie]

If the reports last week of Apple receiving 40%-50% margins on the iPhone are true, it is certainly possible that Apple COULD even be paying Cingular money instead of Cingular paying Apple money. Pure speculation of course.

[Pearl_Diva]

Verizon had more coverage(looking at the maps) than Sprint, last time I checked. Also supposedly more customers.

[archie]

OK, I have thought for another minute here, and the numbers just don't add up. What would be more probable is the phone service being free while requiring a paid data plan.

[archie]

OK, I have thought for another minute here, and the numbers just don't add up. What would be more probable is the phone service being free while requiring a paid data plan.

OK, this isn't right either. Apple has stated that the iPhone uses automatic wi-fi switching, meaning whenever it senses a wi-fi connection, it will use it instead of the data plan connection.

I suppose if the data plan is a flat fee for unlimited use, the subscriber would pay for it but still see benefits from Apple's wi-fi switching in that it would provide better speeds at times.

[Certs]

OK, I have thought for another minute here, and the numbers just don't add up. What would be more probable is the phone service being free while requiring a paid data plan.

I think I would go with the first option, not this one. Either way it is pretty smart.

Think about it- what's Apple's biggest hardware drawback with this new phone? It may be the only hardware drawback actually. No 3G. Compensate for that flaw by giving away its data service for free? Makes sense, especially considering its costing people like me 40/month. And after that year and a half, they will find out that the "iPhone connect unlimited" plan is 50.00/month, free subscription to iTunes, etc etc.....text messaging not included of course. Makes sense, but this is obviously just my "conspiracy theory."

[copernicus]

And what are they going to do for existing customers? **** us off even more?

[specimen38]

Cramer said AT&T is one of the most interesting stories coming out of the tech period. In its call, the company made it very clear that it's going to use Apple's (AAPL - news - Cramer's Take) iPhone to get customers from Verizon Wireless (VZ - news - Cramer's Take) by giving away its service for a year and a half to those customers who buy the phone. Perhaps this means all customers, not just those jumping ship from Verizon.

And what are they going to do for existing customers? **** us off even more?

[Merlyn_3D]

Ahh...I can see it now, all those on Cingular....erm...excuse me...AT&T will once again get their favorite message when placing a call "System busy, try again later". It's good to know that at least you'll have visual voicemail so you can pick and choose who you want to hear (of course, if the data network isn't crammed with all the subs who switched over because it's free).

[Certs]

Ahh...I can see it now, all those on Cingular....erm...excuse me...AT&T will once again get their favorite message when placing a call "System busy, try again later". It's good to know that at least you'll have visual voicemail so you can pick and choose who you want to hear (of course, if the data network isn't crammed with all the subs who switched over because it's free).

Man, what a scary thought that is! I'm outta here.

What's Sprints # again????

[copernicus]

Cramer said AT&T is one of the most interesting stories coming out of the tech period. In its call, the company made it very clear that it's going to use Apple's (AAPL - news - Cramer's Take) iPhone to get customers from Verizon Wireless (VZ - news - Cramer's Take) by giving away its service for a year and a half to those customers who buy the phone. Perhaps this means all customers, not just those jumping ship from Verizon.

If this is true, it is really going to shake things up something fierce. Some might even call it anti-competitive as it could seriously hurt smaller companies. I have not read the articles yet, the devil is in the details of course. I can't bring myself to believe it at this point.

[oalvarez]

Verizon has the greatest customer market share, no? just asking, but if so, that might suggest why they (T/Cingular) are aiming at them.

[specimen38]

Shaking things up is an understatement....this would only be the beginning. It would be a revolutionary move. Here is a sidebar that I am now recalling that might fit into this puzzle. I attended ATT's National Focus Conference in San Diego this past August. This conference is a yearly coming out party for ATT products and services to their large/midsize corporate customers, where they feature keynotes, workshops, and exhibits. One of the discussions that came up after one of the keynotes during the question and answer period -- was about ATT's merger with SBC and the impending acquisition of Cingular (which was in the final stages of being finalized by the FCC). There were numerous questions about customer charges for services over the ATT/SBC network. I will try to paraphrase to characterize the questions here:

1) If ATT/SBC (The New ATT) owns the network that Cingular Cellular services operate and those networks are already joined to ATT's network, then why can't we get free in-Network calling to residential ATT customers in the same way we get free in-Network calls to other Cingular customers?

2) As there are potentially three (chargeable) components to a phone call originating from a cell phone, that is airtime charges between the cell tower and the handset, network charges for voice and data that travel a hard wired conduit to either a residence or another transmitting tower where another cellular phone receives a transmitted signal. In that scenario, cellular to celluar is more expensive because of the airtime transmission. But Cingular offers it free. Customers at the conference wanted to know then why can't cellular calls originating on the new Cingular/ATT network to residential phone services be offered free if they are calling ATT residential customers?

The Execs at the conference scrambled and back-pedaled a little to try to make sense of it, but admitted there was a savings and that they would have to look into it. Admittedly, ATT brass said they had put themselves in a good position to compete with the their latest acquisitions. Conclusion: ATT can offer be very profitable while lowering their profit margins because they own the largest network in the world. They can give away network time for fractions of a cent, which makes the iPhone give away seem more plausible. However I agree with you-copernicus-the devil is in the details.

If this is true, it is really going to shake things up something fierce. Some might even call it anti-competitive as it could seriously hurt smaller companies. I have not read the articles yet, the devil is in the details of course. I can't bring myself to believe it at this point.

Cingular has the most customers.

Verizon has the greatest customer market share, no? just asking, but if so, that might suggest why they (T/Cingular) are aiming at them.

[Chatter]

This story is COMPLETELY uncorroborated; AFAIK, it's the usual Cramer BS.

Marc

[Felipe#WP]

This story is COMPLETELY uncorroborated; AFAIK, it's the usual Cramer BS.

Marc

if true, wouldnt it be all over the place by now?

do we really see att/cingular giving away $1200-$1500 in fees? I'm guessing a $30 voice and $40+ data.

it would be so sweet if this were true. apple will sell their 1 bil phones, and in 12 months verizon would buy att wireless.


btw, i'm hoping it is true.

[Chatter]

All AT&T and Cingular talk about are increasing revenues and margins; I don't think giving away their most profitable services would be a great step in that direction. The Cingular guy on the conference call says that the iPhone "has lived up to the hype and then some" and that it's both the best phone in the world and the best iPod. Total inanity.

Marc

[samkim]

2) As there are potentially three (chargeable) components to a phone call originating from a cell phone, that is airtime charges between the cell tower and the handset, network charges for voice and data that travel a hard wired conduit to either a residence or another transmitting tower where another cellular phone receives a transmitted signal. In that scenario, cellular to celluar is more expensive because of the airtime transmission. But Cingular offers it free. Customers at the conference wanted to know then why can't cellular calls originating on the new Cingular/ATT network to residential phone services be offered free if they are calling ATT residential customers?

I read that this was going to be offerred through an expensive in-network plan.

[samkim]

do we really see att/cingular giving away $1200-$1500 in fees? I'm guessing a $30 voice and $40+ data.

If they did it, I think they would offer a very low number of minutes per month for free, with no data - to get the people who can barely afford an iPhone. If it's $15/mo. worth of voice fees, that's $225 for 18 months. They make a portion of that back from the sale of the phone. And they make up the rest when most of the iPhone users start paying after 18 months. It's workable.

[Chatter]

Whatever, it's not going to be 1 1/2 years of free service. That's just made up stuff.

Marc