AT&T: ‘We’re not betting on the handset, we’re betting on Steve Jobs’

“Wonder why the smoking-hot 3G Apple iPhone only costs $199, less than half the price of the original? Here’s a two-word hint: Randall Stephenson,” Leslie Cauley reports for USA Today. “Stephenson, who became AT&T’s chairman and CEO a year ago, championed the idea of paying Apple about $300 per device, analysts estimate, to help hold down the retail cost.”

“It remains to be seen if AT&T’s gamble will pay off. One thing is clear: Thanks to the iPhone, the smartphone game has changed dramatically. And so have consumer perceptions of the mobile Web, a netherworld that seemed downright hostile before the iPhone showed up,” Cauley reports.

“AT&T’s role in the iPhone’s success could cement its place as the premier cellphone carrier in the USA. It’s already helped raise AT&T’s cool factor, a big deal among tweens, teens and other Web-centric customers. That’s no small feat considering the brand’s age — more than 120 years and counting,” Cauley reports.

“The iPhone has a huge impact on carriers, which tried for years to sell consumers on the idea of wireless data, says Charles Golvin, a senior wireless analyst at Forrester. ‘Then Apple came along and, in a 30-second commercial, they just made it dead simple,’ he says. That simplicity, married to the sleek iPhone design and Web-friendly function, has energized consumers, he says. It’s also raised the bar globally for carriers and established handset makers, he adds,” Cauley reports.

“You’ll get no argument from Stephenson. In a sit-down interview, he says the iPhone is central to what he sees as an ongoing transformation of AT&T. His goal: Turn the iconic company into a wireless goliath with global reach and intense customer loyalty,” Cauley reports. “‘The iPhone has repositioned AT&T as the premier wireless brand in the world,’ Stephenson says.”

“In 2005, Stephenson was quick to lend his support to an idea, first raised by Cingular CEO Stan Sigman, to pursue a handset deal with Apple,” Cauley reports. “Other telecoms, including Verizon, passed because Apple was demanding control of marketing, pricing and more. AT&T didn’t blink, however, and the iPhone partnership was born.”

“The iPhone might seem like a no-brainer now, but back then it was little more than a concept, with no name, design plan or software operating system. And it was offered by a computer company that had zip experience in wireless” Cauley reports. “

“But the idea did have one thing going for it: Apple CEO Steve Jobs. The Apple chief was convinced he could design a better smartphone, one that would make it easy — and fun — to use the mobile Web, which was just emerging. Stephenson says that’s all he needed to hear,” Cauley reports. “‘We’re not betting on the handset,’ he says, reflecting on that fateful 2005 decision to lock arms with Apple. ‘We’re betting on Jobs.'”

Much, much more in the full article – recommended – here.

40 Comments

  1. AT&T;Wireless needs to spend some coin on building out its network. That is the Achilles Heel for Apple making the iPhone 3G a slam dunk in the USA.

    Maybe then, maybe, AT&T;could claim to be the ‘premeir cellphone carrier’ in the states.

    Everyone I know says Verizon coverage is ace.

  2. @znxcjln
    I was the one who created that headline and I’m impressed how quickly you spun it around the way you did. You ought to apply for a position in the Fox news somewhere. Meanwhile, not to be nit-picky or anything, but what Stephenson said was that they’re not betting on the ‘handset.’ But please, lets not allow facts get in the way of a good story.

  3. “AT&T;’s role in the iPhone’s success could cement its place as the premier cellphone carrier in the USA. It’s already helped raise AT&T;’s cool factor, a big deal among tweens, teens and other Web-centric customers. That’s no small feat considering the brand’s age — more than 120 years and counting.”

    Everyone focuses on the iPhone as a tool to drive up AT&T;subscriber numbers but I believe that quote sums up why they love the iPhone so much.

    If you can remember pre-iPhone, AT&T;had just made the transition from being Cingular in 2006 and everyone panned the idea. They ran commercials touting themselves as the “new AT&T;.” There had been no major exclusive smash hits for the carrier to help cement their brand the way the Motorola Razr did for “Cingular” years earlier.

    History will record the iPhone as the product that put the AT&T;wireless brand on the map. Even when the exclusivity dries up, they will have gotten more than their money’s worth.

  4. I am becoming uncomfortable reading MDN on a dialy basis without a clear statement from znxcjln on his/her health and a succession plan for when znxcjln can no longer post idiotic statements.

  5. Had Verizon gone for the iPhone, I could have one today. They’re a CDMA carrier, and I’d be able to get reception.

    Instead, AT&T;(perhaps understandably) leaves our rural area out in the cold with all of the inferior handsets.

    One question I have, though, is if Apple had gone with a CDMA carrier, then would it have had to develop two iPhones? My understanding is that overseas GSM is much more prevalent. Also makes me wonder if, much like OS X had an x86 version all along, there isn’t already a CDMA prototype in a lab right now.

    I’d give one of my nuts for it.

  6. Come on guys, this all seems so insular and slightly xenophobic.
    Deals like this with carriers subsidizing phones have been going on for years all over the planet. It’s nothing new!

    I used to have a SonyEriccson P910i which I got for free from O2 here in the UK if I continued a 12 month contract with them for £30 per month.

    Why is this news. How can this dude claim credit for this idea?

    And how about all the other carriers that are subsidising the iPhone around the world. On O2 here in the UK we can get the iPhone 3G for free on certain tariffs and £99 at the very most on the basic tarrifs. And we still get unlimited free data.

    There is also information on their website about being able to get the iPhone on pay as you go!

    Just thought I would mention it.

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