ATandT Can't Whistle in the Dark Forever

 
 
By Don Reisinger  |  Posted 2010-05-20 Email Print this article Print
 
 
 
 
 
 
 


5. Options are never good for a company AT&T might be able to keep a stiff upper lip when it discusses the iPhone, but privately, it knows that a Verizon iPhone isn't good at all. The best thing that can happen to any company, let alone a mobile carrier, is to have exclusive control over the device that everyone wants. But as soon as consumers are given the option to have that product in several places, it spells trouble. Price wars erupt. Marketing costs go up. And all the while, the only company that's benefiting is the device's vendor. Neither AT&T nor Verizon Wireless would be happy about that. 

6. It will cost more in the end 

Having the iPhone on multiple carriers might be best for Apple, but it will be a costly decision for AT&T. As mentioned, the company would need to invest more in marketing and potentially find ways to reduce plan costs to entice consumers. But it goes beyond that. A new battle would erupt over which carrier offers the best coverage and access to 3G networks. If Verizon offered better coverage, AT&T would need to invest in towers to increase its coverage and 3G availability. And that costs significant amounts of cash. Right now, it can do that on its own time. With a Verizon iPhone on the market, the pressure would be on.

7.  Where's the benefit?

AT&T needs to say that there isn't any problem with a Verizon iPhone and it's not concerned by it. But where does it see the benefit of such a device hitting store shelves? It might not feel (publicly) that a Verizon Wireless iPhone could hurt AT&T, but it knows that the sooner Verizon gets the iPhone, the sooner it will need to do whatever it takes to stay atop the iPhone market. In other words, a Verizon iPhone isn't good for AT&T in any way. And it needs to stop saying that it's fine with it. It isn't.

8. A more powerful Apple is a dangerous Apple The last thing AT&T wants right now is a more powerful Apple. Although it publicly says that Apple is a partner and that it wants to see the company succeed, it really doesn't. The only thing AT&T wants to see succeed is the iPhone that's available exclusively on its service. It makes sense. With Apple offering its iPhone on multiple carriers, it will have more leverage in the mobile business. And with more leverage, it's able to wrest more control from the carrier. AT&T doesn't need that. It wants to be able to control Apple's ability to offer phones to customers. If it loses that, it loses its only advantage.

9. It loses all leverage with consumers

By offering the iPhone to Verizon Wireless customers, Apple will benefit. And all the while, AT&T will lose its grip on consumers. Think about it: Right now, the only way for consumers to have the iPhone is by being an AT&T subscriber. That means that AT&T can use whatever policies it wants to ensure it's profiting nicely off those customers. That's not necessarily a bad thing-in fact, it's good business-but it will lose that if Apple brings the iPhone to Verizon's customers. At that point, AT&T would have to play especially nice with customers to ensure they don't jump ship. Worst of all, it will need to adjust pricing to attract new business. The carrier won't like that. 

10. The enterprise has a choice One of the best things about having the iPhone available exclusively on your own service is that it attracts enterprise customers to your business. Although consumers are nice to have, the enterprise can do wonders for a carrier. Unlike consumers, which enter into two-year contracts that, upon paying a fee, can be broken, companies are locked in. The average company will enter into an agreement with a carrier and be stuck with it for several years, regardless of when it would like to get out. And although the iPhone was originally a consumer-oriented product, it's quickly gaining ground in the enterprise. AT&T would like to capitalize on all that business. It certainly won't want to share it with Verizon Wireless.




 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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