Quinten Plummer
AT&T is looking to iPhone to protect its postpaid mobile subscriber base from incursions made by carriers and "Un-carriers" alike, a strategy expected to result in attractive "iPhone 7" promotions later this year, according to investment bank Nomura Securities.
With traditionally thin margins on handset sales, a strong "iPhone 7" launch is unlikely to be a significant revenue driver for AT&T, but it could put a positive spin on postpaid customer stability in the fourth quarter, Nomura analyst Jeffrey Kvaal said in a note shared with AppleInsider. AT&T is looking to alleviate declining net subscriber additions after 363,000 postpaid subscribers left the network in quarter one (PDF link).
Along with DirecTV and Sunday Ticket, AT&T will promote the expected next-generation iPhone in an effort to "defend a slightly lower tier slice of its mobile sub base," Kvaal said.
Nomura forecasts AT&T iPhone upgrades to hit 7 to 8 percent in the second half of 2016, up from 5 percent in three month period ending in March. About 72 percent of AT&T's postpaid customers are on the company's Mobile Share Value plans, which require a steady diet of upgrades. Kvaal's predictions for "iPhone 7" fall about 3 percent short of gains realized with 2014's iPhone 6 release, which pushed AT&T upgrade levels above 10 percent.
The wireless carrier's second half push is expected to net about 1.01 million postpaid additions, delivering stability after a string of quarters that saw it lose more ports to T-Mobile than it secured. During the third quarter of last year, AT&T gained one T-Mobile customer for every two it lost.
T-Mobile has given all three of its rivals a run when it comes to selling Apple products and services. Last December, the self-styled "Un-carrier" offered existing AT&T customers 128GB iPhone 6s handsets for the price of the 16GB model as an incentive to switch over. Before that, it announced that customers who bought iPhone 6 could immediately upgrade to the iPhone 6s when it released a few months later.
Apple is expected to follow its usual launch cycle and release a refreshed iPhone this fall. Current rumors suggest the next-gen handset will come with enhanced cameras — a dual-lens setup for the 5.5-inch Plus model — and other updated internals, but should otherwise be aesthetically similar to iPhone 6 and iPhone 6s. The most recent rumblings claim Apple plans to offer a new 256GB storage tier, twice that of current top-end models.
Appleinsider Staff
Christine McKee
37 Comments
I've been with AT&T years before the iPhone, and I bought an original iPhone the week it was released. They keep raising their prices for the same (or less) service. If AT&T doesn't lower their prices and become more competitive, my new iPhone 6s will be my last AT&T phone. I'd even be willing to give up my original iPhone grandfathered unlimited data plan.
Been with AT&T since the first iPhone. Buying my next iPhone from Apple so that it's unlocked. Much cheaper service from others around here.
Everyone seems to be betting on iPhone 7. What do they know that we don't?
Could just be Apple's great track record with "tick" iPhones.