ATandT Must Act Fast to Offset Losing iPhone Exclusivity: 10 Smart Ideas

By Don Reisinger  |  Posted 2011-01-27 Print this article Print

News Analysis: AT&T doesn't have any time to waste once it loses its exclusive right to sell the Apple iPhone. It needs to play its cards right to keep the advent of the Verizon iPhone from slowing its growth.

Feb. 10 will be a landmark day for Verizon as it begins selling the Apple iPhone. AT&T, on the other hand, won't have much to cheer about. Over the past few years since the iPhone's launch in 2007, AT&T's exclusivity deal in the United States has helped the company generate boatloads of cash and see its subscriber base swell to over 95 million people.

But AT&T will have to be on the top of its game to contend with a resurgent Verizon that will have the iPhone and its 94 million subscribers to help put its growth into overdrive. Both companies will be competing on more of an even playing field now. However, Verizon might even have a decisive advantage in this battle since customers have been waiting for years for this carrier to get the iPhone accumulating plenty of pent up demand.

However AT&T still has the ability to overcome the loss of iPhone exclusivity. It just needs to play its cards well and leverage existing relationships.

Here is what AT&T should do to keep the Verizon iPhone from becoming a serious thorn in it side.

1. Double down on Android.

When the iPhone is no longer exclusively available on AT&T's network, the carrier should invest heavily in Google's Android platform. As recent sales figures have shown, Android is growing rapidly and by 2014, according to research firm Gartner, could be within striking distance of supplanting Symbian as the world's top mobile operating system. If AT&T can follow through on bringing more Android devices to its store shelves in the coming months and carve out a significant portion of that market, it should be able to soften the blow brought by the loss of iPhone exclusivity.

2. Roll out the 4G.

One of Verizon's key selling points right now is its 4G connectivity. The company claims that it's available to over 110 million potential customers. As of this writing, AT&T hasn't deployed 4G wireless technology on its network. That's a problem. If AT&T wants to maintain its leadership position in the U.S. mobile market, it must roll out 4G as quickly as possible. The high-speed network is the next frontier in mobility, and AT&T should be prepared to capitalize on it.

3. Invest in better service.

One of the biggest issues with AT&T over the past few years has been its spotty service coverage. Customers around the U.S. have found in many cases that Verizon's network delivers better service. For its part, AT&T has invested billions in improving its service over the past couple of years, but it's still not where it should be. If by investing in better service AT&T can match or best Verizon, it should be able to reduce the number of people who leave for its top competitor's network.

4. Consider an iPhone price reduction.

If Apple allows the company to do it, AT&T should consider reducing the price of the iPhone 4 to new customers. The carrier should drop the price of the devices by $50 each, making it a better value to consumers. Will that be enough to get folks to stick with or switch to AT&T, rather than go to Verizon? It's tough to say. But if AT&T can lead on pricing, it could prove to be helpful. The only issue now is it needs to sell Apple on the idea.

Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Since then, he has written extremely popular columns for, 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

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