MacDailyNews Note: See our earlier article: Analyst: 77 percent of early iPhone 4 sales were to iPhone upgraders
Paczkowski reports, “And Apple is not the sole beneficiary of that loyalty. It’s carrier partners — particularly those with iPhone exclusivity deals — are as well. Though the benefits for them do seem to decline with every new launch. Munster says 16 percent of the new U.S. iPhone buyers he surveyed this year were swtiching carriers to AT&T (T) — down significantly from 28 percent last year.”
That suggests two things:
• Most people who’ve left another carrier specifically to get the iPhone have already done so.
• Apple needs another carrier partner in the states to further maximize iPhone sales.
Paczkowski writes, “The latter point is, of course, obvious.”
Full article here.
MacDailyNews Take: Note to 16% of iPhone 4 buyers: Our condolences – unless you came from Sprint. 
iPhone 4 will be another juggernaut. Complain, whine and FUD yourself stupid – it won’t have a worthy competitor for years to come.
To maximize sales? How much more can you maximize?
Plus, all up-graders paid for their phones, didn’t they?
So who cares where the money comes from.
Let’s not forget that for every upgraded iPhone, there is an older one that surely won’t just end up in a drawer. Most of them will end up staying on AT&T (where else can they go? They’re locked to AT&T, and negligible percentage of people know about unlocking).
The greatest beneficiary here will be AT&T. While Apple will make their $600 on each of the devices, AT&T will earn that much revenue in approximately one year (average revenue per iPhone, counting those family plans, where an add-on line is $$35 or so). Since most of original (3 years old) iPhones are still on AT&T network, generating massive revenue (remember, subsidy has been paid off long time ago), it is obvious why AT&T is loving Apple and the iPhone, regardless of the back-breaking load it has put on their networks.
In other words, even if those older iPhones are replacing other AT&T dumbphones (i.e. AT&T’s existing subscribers), they are still a major boost for AT&T. A dumbphone user usually replaces the dumbphone as soon as eligible. For those, AT&T is collecting $40 per month (cheapest voice-only plan), of which approximately $10 – $15 is subsidy (which makes that dumbphone free with plan for the customer). That subsidy takes 15-18 months to recover, so throughout that time, their revenue is at most $30 per month, compared to at least $55 for an old iPhone, with subsidy already paid in full.
As I said, AT&T is loving this.
It is obvious that Apple simply can’t make enough iPhones as it is. For the past years, this has been the only problem; in other words, they never were in a position where they’re accumulating inventory. The point is, there really is no need for an additional carrier in order to reduce inventory. There is no inventory to BE reduced right now, and there never was any.
The only reason why Apple would eventually want to offer the iPhone on other carriers would be to enable the remaining (fairly small) percentage of Americans to get the iPhone experience. Those outside of AT&T’s range, those locked into other carriers for whatever reasons, and perhaps those with some personal distaste for AT&T (like MDN staff, for example).
Since Apple is under no real pressure to get out of the AT&T agreement early, we shouldn’t expect any other carriers until 2012.
They will regret it. ATT BLOWS!
I want one but not with ATT.
Way to go MDN, get another whack at ATT. Daily, no, hourly jabs. Get over it, we all know.
all cell companies SUCK….they just suck differently
i use my iphone for data more than calls, so I’d rather have faster reliable data where I can optimize the use of my *smart*phone functions – which I can with ATT, instead of worrying about an occasional dropped call which I don’t experience much of since I don’t live in NYC, SF, etc
I have no problems with my ATT experience.
Steve Jobs has one weakness, and that is his stubborness/hubris. If Apple went with AT&T;AND VERIZON at the BEGINNING, the competition would have been destroyed and Google would have had a much more difficult time selling their Droids. Steve, ya gave ’em the opportunity, and they have done a decent job of seizing it. Now own up to your mistake, and get the damn iPhone on Verizon fer chrissakes.
G Spank:
Why? So that the wait for the iPhone is even longer than now? They are selling EVERY single iPhone they make. They can’t make them fast enough. Opening up to another carrier would just make it even worse.
Not to mention that they can’t because the 5-year agreement with AT&T does NOT expire until 2012. Amazing how everyone seems to have completely forgotten what was heavily reported three years ago, and from various independent insider sources.
@GSpank,
“If Apple went with AT&T;AND VERIZON at the BEGINNING, “
Another child or MS/Android troll. Verizon DID NOT WANT the iPhone as Steve was selling it. They wanted VCAST vs iTunes, power over everything.. Period.
So Spank, take your spanking to Android and listen to them complain about how no one is doing upgrades, even through the phone is capable.
Just a thought,
en
@MDN,
How about doing a poll on AT&T;versus the other carriers?
I’d like to see Apple offer an iPhone on Verizon since it would increase the user base (which would mean more developers, more accessories, and larger ecosystem in general), plus it would reduce strain on AT&T;’s network.
However, if Apple offered a Verizon iPhone, I’d still stick with AT&T;. Here’s why:
1) AT&T;service is just fine where I live.
2) AT&T;has a much faster data network, especially now with much faster uploads.
3) AT&T;can do data & voice at the same time.
4) Roll over minutes (a huge cost savings for me).
5) AT&T;uses SIM cards which means it’s easy to swap phones in and out of an account.
6) AT&T;with GSM makes it a world phone. I’ve traveled all around Europe with a SIM I rented from iPhoneTrip.com that gave me unlimited data. A Verizon phone couldn’t do this unless Apple made the iPhone a hybrid GSM/CDMA phone.
7) AT&T;has better customer service. I swear that AT&T;Customer Retention Specialists will do whatever you ask of them. “No” just isn’t in their vocabulary.
8) AT&T;has free wifi hotspots for subscribers…all over the place.
Sure, when I travel in places around the country, AT&T;has service areas that suck, but it’s *really* improving. They’re even getting better at special events by bringing in truck based stations.
Of course, this is just my experience, based mostly on where I live and travel. I’d agree that Verizon has better coverage overall across the country, but it’s not the type of thing where Verizon is categorically superior to AT&T;.
You have to take into account the difference in sales.
28% of 1,000,000 (last year’s launch number) is actually less than 16% of 2,000,000 (this year’s estimated number).
It may turn out that the actual number of switchers is not diminishing, rather the number of upgraders is growing, presumably because there are consistently more iPhone owners with every launch.
@macslut, you assume MDN wants to here something that is different than their version of the truth….as for me, I’d vote:
0.5 vote for #1 ….it is OK, but not great, but neither is verizon which I’ve had
1 vote for #2, 3, 4, 5, 8
[repost from another thread]
My prediction:
Jobs has already bought out the ATT agreement, and is accomodating an ATT request to delay announcing an additional carrier for a few months so that ATT can lock-in as many upgraders into contracts as possible during this latest iPhone revision cycle.
Once that upgrade curve begins to wane (I predict early fall), then you’ll see Apple announce another carrier, just in time to ride the resulting upgrade bump into the holiday season.
iCal me….
@macslut
My experience matches yours 100 percent. And, since a core skill of data carriers seems to be underestimating the impact of Apple products on their network, I’d also predict that regardless of which carrier is “next” to sell iPhones, we’ll see the familliar “growth issues” in their bandwidth/coverage as we’ve seen with ATT.
As Yogi Berra would say, it’ll be “Deja vu all over again”….
No Gene, what it means is that for the first day of sales, the most excited people to get their iPhone 4s are current iPhone users. It does not mean very few people will not switch to ATT, just that they didn’t participate in the preorders or the craziness of the first day’s lines.
the fact that someone thinks i’m an Android troll cracks me up. It really says a lot about the intolerance of some Apple fans, considering I’ve been a huge Apple fan for 15 years or so.
I’ll be switching from Sprint, which has been heaven compared to Verizon.
@Macslut- I haven’t done as much travelling as you with my iPhone but agree with your points. We had very little trouble with ATT. Will stay with them if (when) Apple introduces a new carrier. The plus side for us is as some jump ship that leaves more bandwidth for those of us who remain.
Cheers!
I love AT&T;and have do idea why the publisher of this site does not. I love them because they followed Steve Jobs’ leadership. I love them because I have 5 signal strength bars in my home. I love them because I think Verizon people are bullies and rude. I love them because they give me rollover minutes. I love them because I think CDMA networks are so last century.
There is NOTHING wrong with AT&T;. I know that people have bad experiences with companies sometimes. That even happens with Apple. But for crying out loud, your goofy animosity towards AT&T;is keeping you from owning the GREATEST FREAKIN PHONE IN THE WORLD. Snap out of it! I am so sick of the moaning and crying about Verizon not having iPhones!
ATT is fine for me. Five bars in the whole area of my travels in Southern California. Data is good, wish it were faster. Customer service has been above average when I want them.
@macslut. I’d go yes on 1-8, but #6 is critical to me. I need a phone that can leave the US without any trouble. I think ATT international rates are thievery compared to T-Mobile, but I’ve learn to be careful. Verizon has a workaround for international service, selling phones that have both CDMA and GSM chips, but how is that going to work with an iPhone?
Well, here we go again with another MDN fair and balanced unsupported crap.
Oh boy here comes another s**t on AT&T;parade. By the way, a day or so before my iPhone 4 came in I noticed that the FedEx package tracking site was having a hell of a time updating. Several of my friends who were also anticipating their iPhone delivery experienced the same thing and there was even a warning on top of the page indicating they were having issues. Let’s trash on FedEx now like you all did on AT&T;on pre-order day for failing us all! Fair is fair, no?