AT&T Is Just Fine in the Verizon iPhone Era, Thank You

By  |  Wednesday, April 20, 2011 at 11:17 pm

AT&T reported its quarterly numbers Wednesday morning, and they certainly showed that the iPhone is still a significant driver of growth for the carrier. 3.6 million iPhones were activated during the quarter, and iPhone subscriber churn (customers with the device who left for a competitor) was unchanged from the same period last year.

This is significant for one reason: it was the first quarter that the Verizon iPhone was available. Being able to keep churn flat is quite an accomplishment, considering that so many analysts said that Verizon would siphon customers away from Big Blue.

PC Magazine’s Peter Pachal thinks that the iPhone 3GS–which is available on AT&T but not  Verizon–was the X factor here, and may have helped the company artificially bolster its numbers. While the $49 iPhone 3GS may have helped the company sell and activate more phones, I believe Peter’s logic is a little off when it comes to keep people on the carrier.

Here’s why. The 3GS is now a two year old device. The iPhone users who would be churning off of AT&T and onto Verizon in all likelihood are already on a 3GS. Add to this that anecdotal evidence has shown a majority of iPhone purchasers go for the latest and greatest and the 3GS’s effect seems relegated to the most economy-minded buyers.

It seems no different to me for AT&T to use its position with the 3GS to sell phones as it’s done with older Android phones — provide a cheaper version for those that don’t need all the bells and whistles. Until Apple provides an all-new “cheap iPhone” (which I think it needs to do), why not? Verizon’s going to do the same thing with the iPhone 4 when the 5 comes out — whenever that may be.

AT&T was wise to make the 3GS a bargain. It’s still is a very capable device, and probably will be able to handle almost anything Apple does with iOS for a while yet — so for $49 on a two-year contract, you can’t go wrong.

One last note: Several industry watchers have come out saying that the number of Verizon iPhone purchasers coming from AT&T was nowhere near as big as first thought. All in all, Verizon just added to the iOS ecosystem, but did not cannibalize it.

 
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4 Comments For This Post

  1. David Says:
    April 21st, 2011 at 6:21 am

    And considering that Verizon activated 2.2 million iPhones in *less* than eight weeks and 260,000 Thunderbolts in *two* weeks, that equals, by my math about 275,000 iPhones vs. 130,000 Thunderbolts per week, we can safely say that the Thunderbolt is not the dragon slayer and move on to the next iPhone killer.

  2. jltnol Says:
    April 22nd, 2011 at 7:12 am

    LOL Well we'll see what happens in 18 months when the last people(like me) who signed up with ATT because there wasn't other options… and our contract expires… I won't be renewing. ATT is the worst…at least where I live.

  3. cdbtx Says:
    April 23rd, 2011 at 8:19 am

    Obviously you didn't see Verizon's numbers. 1 1/2 months of iPhone sales reported and the next quarter will have the launch of the LTE phones. 15 X the subscriber adds as AT&T and you claim that's not bad… errrrrrrrr.. well.. ok.. you live and invest in your own little reality and I in mine and soon my taxes will be supporting your food stamps and housing…

  4. Redzonw Says:
    October 13th, 2011 at 9:51 am

    Really this world come in iphone Era. Everything changed into Information technology world. Sell iPad