VZ iPhone: What does it mean? January 11, 2011Posted by chetan in : US Wireless Market , trackback
VZ iPhone has kept the media busy for the last 3.5 years. It was quite an anticlimactic moment when the device finally came to the 2nd operator in the US. It was inevitable that one of the longest exclusive relationship in the wireless world will come to an end. For me as a strategist, it was fascinating to watch. iPhone singlehandedly turned around AT&T relative to Verizon in the net-adds race. If you study the chart below, for 10 quarters leading up to Q2 2007, AT&T was adding less net-adds compared to Verizon, in fact the cumulative net-add loss was 3.7 million subs on an average of 374,000 subs per quarter.
As soon as the iPhone was launched in Q2 2007, AT&T started adding more net-adds compared to Verizon with the 13 quarter cumulative net-add difference close to 5 million subs on an average of 378,000 subs per quarter.
So, it was one of the most brilliantly executed exclusive agreements in the history of the industry. Yes, the growth in network gave AT&T all sorts of problems and they had to accelerate the plans to upgrade the network but it also helped the industry to understand and learn which led to better technology and appreciation for consumer demand and network planning.
AT&T carries the most iPhones (and smartphones) on their network not only in the US but across the planet and the network data showed as it was stressed with the hockey stick growth over the last three years.
As other OEMs rushed to emulate Apple’s success, the playing field had completely changed with the advent of superphones led by Apple. AT&T’s network traffic growth gave tremendous insights to Ericsson and Alcatel-Lucent from with other operators also benefitted.
The AT&T-Apple relationship impacted the industry in multiple dimensions. Strategists in the industry would do well to study it and draw lessons for future.
By 2010, many of us knew, VZ iPhone is in the works and will be launched in Q1 2011. In fact, 53% in our survey predicted a Q1 launch though they got the month slight wrong – Jan instead of March.
How does this shake up the rest of the year? There are enough differences between the two offerings that there isn’t going to be any short-term impact on AT&T. Speed, Intl roaming, simultaneous voice/data are differentiators enough to keep folks in the AT&T camp happy. Verizon will try to lure with better pricing (unlimited data) but AT&T will match and keep the damage to the minimum.
VZ’s iPhone also means that Android is going to get its first real standoff with iPhone and the Q1-Q2 numbers will tell if Android can stand on its own in a direct face-off. Of course, overall Android will continue to do very well due to dozens of OEM partners.
The next defining moment (and fodder to the rumor mill) will be the LTE iPhone. Until then, keep speculating ..