Slash LaneiPhone as AT&T's "sour apple"
In a look at the exclusive deal between AT&T and Apple for the iPhone in the U.S., The Wall Street Journal asks whether the exclusive contract amounted to a raw deal for the wireless carrier. Author Martin Peers notes that of 10 million iPhone activations since 2007, "only" 40 percent were new customers.
"That means only four million new customers signed up, about 5 percent of AT&T's total, or 6 percent of "postpaid" customers on costly monthly contracts," the report states. "Complicating the math is that some activations represent upgrades from earlier iPhone versions. AT&T said last month that it had about nine million iPhone customers."
Peers goes on to note that AT&T is estimated to spend roughly $400 per sold phone on subsidies, though those reports are unconfirmed. But because that estimated total is much higher than other smartphones, the report suggests that the iPhone has "depressed AT&T profit margins."
AT&T essentially said as much last month, when the company's quarterly earnings fell on the cost of the iPhone subsidy. The successful launch of the iPhone 3GS led to a 15 percent year over year decline for the wireless carrier.
In addition, Peers said, the Web-centric iPhone has placed a strain on AT&T's network. Because the performance has been so poor, he concludes that public perception has been damaged, something that "may be difficult to repair."
"Whatever value AT&T got from the device," he concluded, "it seems clear that Apple was the real beneficiary."
Rockstar to bring GTA, Beaterator to iPhone
Rockstar Games announced Monday that it would port its portable version of Grand Theft Auto: Chinatown Wars from the Nintendo DS to the iPhone. The game is expected to arrive this fall.
“Chinatown Wars is a perfect match for the iPhone and iPod touch. We are very excited to bring this incredibly ambitious version of Liberty City, with this level of detail and immersive gameplay on Apple’s new gaming platforms,†Rockstar President Sam Houser said.
Chinatown Wars is one of the best-reviewed games for Nintendo's mobile device. After lackluster sales following the title's debut, Rockstar also announced its intentions to port the title to the Sony PlayStation Portable.
Rockstar also announced that Beaterator, its rhythm game already announced for the Sony PSP, will also make its way to the iPhone and iPod touch this fall.
"The simple, pick-up-and-play nature of Beaterator lends itself so well to the Apple platforms," Houser said. "We are happy to deliver an application that allows for such unprecedented sharing and ease-of-use."
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Peers goes on to note that AT&T is estimated to spend roughly $400 per sold phone on subsidies, though those reports are unconfirmed. But because that estimated total is much higher than other smartphones, the report suggests that the iPhone has "depressed AT&T profit margins."
AT&T essentially said as much last month, when the company's quarterly earnings fell on the cost of the iPhone subsidy. The successful launch of the iPhone 3GS led to a 15 percent year over year decline for the wireless carrier.
In addition, Peers said, the Web-centric iPhone has placed a strain on AT&T's network. Because the performance has been so poor, he concludes that public perception has been damaged, something that "may be difficult to repair."
"Whatever value AT&T got from the device," he concluded, "it seems clear that Apple was the real beneficiary."
So how is 5 months of a 450 minute plan dragging down their profits? They have made their money back and more on my plan, which is 900 minutes a month. They would have made zero dollars off of me if they didn't have the iPhone. I just don't get it.
Sorry, AT&T isn't getting any sympathy for me.
All iPhone users are paying $30/month to AT&T on 3G data plan. And many aren't getting reliable 3G (and often, not even 2G) coverage. Perhaps that is intended to offset heavier users in well covered areas, but to me, that is close to extortion.
Perhaps it is difficult to cover the needs of every iPhone users, but at the end of the day, many users are paying for service that isn't being fulfilled. Meanwhile, AT&T salesrep frequently adds features that subscribers did not ask for, which given the format of the bill, is difficult to notice.
If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.
boohoo, poor AT&T. Four million new subs is nothing to sneeze at in an industry where customers do not change providers often. Locking them all into two year, extremely lucrative and expensive contracts probably helped cushion the 'blow' of 'only' signing 4 million new customers. That their network was unable to handle the flood of users, simply shows that any poor perception they received was well earned by them and them alone. Apple provides them with a devices that gets them more attention, more new customers and contract locks and it is somehow Apple and the iPhones fault that they couldn't deal with it? What was Apple suppose to do to make it a better deal? Release a more crippled iPhone that users would not want or use and that AT&T could then handle?
A more honest and accurate report would have said that Apple gave AT&T a golden opportunity with the iPhone exclusivity and AT&T did everything they could to blow it.
A more honest and accurate report would have said that Apple gave AT&T a golden opportunity with the iPhone exclusivity and AT&T did everything they could to blow it.
More and more reports will come out every couple of weeks from now on --- saying the same thing --- for the rest of the world's carriers' carrying the iphone.
No iphone carrier is making much money on the iphone --- and that's honest and accurate.