Is the iPhone hurting AT&T's brand?
The Apple iPhone has boosted AT&T's subscriber numbers, but network problems and a bevy of complaints from frustrated customers are likely hurting the company's reputation.
While a recent survey by the consulting firm CFI Group found that iPhone users are the most loyal smartphone users with 90 percent saying they'd recommend the device to a friend, half of all iPhone owners surveyed said they would like to jump ship to another provider if given the chance.
And for the first time, AT&T has scored worse than all four major U.S. wireless operators in terms of overall customer satisfaction for smartphones. According to the survey, AT&T scored 69 out of 100 among users, and 73 among non-iPhone owners. Verizon Wireless was the most satisfying carrier with a score or 79 out of 100 among smartphone users. Even Sprint Nextel, which has struggled to retain customers due to its poor reputation, scored better than AT&T among smartphone users. It got a 74 out of 100 in terms of customer satisfaction.
The figures are among the first to quantify growing dissatisfaction with AT&T's network.
"AT&T has never fared great in customer satisfaction surveys," said Doug Helmreich, program director with CFI Group. "But they've never been last. Now AT&T is coming up last among smartphone users. The iPhone has been a cash cow for AT&T, but that cash comes at a cost in terms of overall satisfaction."
Public relations and brand experts warn that if AT&T doesn't take steps now to correct its image that it could come back to haunt the company in the future. The main issue for customers is that many users, especially those in urban areas, report poor network coverage and service. Problems with AT&T's 3G wireless have been widely reported on blogs, Twitter feeds, and even in published reports from BusinessWeek and The New York Times.
Customers all over the country have complained about dropped calls and the inability to connect to the 3G network. CNET News writer Elinor Mills documented her frustrating experience with her iPhone in a blog post recently. The story hit a nerve among fellow iPhone users, and more than 400 comments were left on the story. Most of the comments corroborated the writer's plight. And the follow-up story on the same issue garnered at least another 300 comments from readers.
AT&T's company line
And yet, AT&T has not admitted any problem with its network. When questioned about potential problems with the AT&T network being overburdened by iPhone users, Mark Siegel, an AT&T spokesman, reiterated the company line: "We have a strong, high-quality mobile broadband network. It is the nation's fastest 3G network, now in 350 major metropolitan areas."
In fairness to AT&T, the company has acknowledged that it is upgrading its network to deal with increased demand from the iPhone. Siegel said the company plans to spend $17 billion to $18 billion on improving its wireless and wireline broadband networks in 2009. Of course, this is a few billion dollars less than what the company spent in 2008. During that year, AT&T's annual report indicates it spent $20.1 billion on capital expendituresfor its wireless and wireline networks. Still, $17 billion is nothing to sneeze at.
Some of these improvements include deploying 850 MHz technology across AT&T's 3G markets to improve in-building coverage, adding nearly 2,000 new cell sites to improve overall coverage, and increasing capacity in thousands of cell sites with more backhaul infrastructure.
"We are the leader in smartphones in the U.S." Siegel said. "We carry more iPhones than any other carrier in the world and handle more wireless data traffic than other U.S. carrier. Because of smartphones like the iPhone, among many others, people have dramatically changed the way they use the wireless network with data usage exploding."
Indeed, Siegel is correct. iPhone users use the mobile Internet more than other mobile subscribers. So even though Verizon may rank high in terms of customer satisfaction, people are not using the network as much or in the same way as heavy iPhone users.
Still, Siegel said the company will look into the survey results from the CFI Group.
"We welcome and value all feedback from our customers," he said. "We view such feedback as an important opportunity to help us continuously improve our products and services. We will certainly look carefully at the CFI Group survey results to see what we can learn from it."
Of churn and confidence
For now, AT&T's potential image problems haven't been hurting the company. In July, it reported that it had reduced its churn rate, or the rate at which customers dump it service, yet again to 1.09 percent for subscribers on a contract. This is one of the lowest churn rates in the industry.
"The surest indication of customer satisfaction is churn," AT&T's Siegel said. "And ours is at record-low levels. Our own internal data suggests that our iPhone customers are very satisfied with AT&T."
But AT&T's confidence may be misleading. Currently, AT&T is the only U.S. wireless operator offering the iPhone. Once the exclusivity deal ends, which many believe will happen within a couple of years, dissatisfied customers may flee from AT&T to another carrier.
"I think it's safe to say that the same percentage of people who switched to AT&T for the iPhone, would likely leave if they believed they could get the same experience on a better network," said Helmreich. "And that could cause huge problems for AT&T since nearly half of its iPhone users switched from another carrier."
Public relations and brand experts such as Rob Adler, vice president at Vantage Communications, a technology public relations firm in San Francisco, say that AT&T must fess up to the reality if it doesn't want customers to punish it in the long run. Adler, who is an iPhone subscriber living in San Francisco, says there is no question that AT&T's network has been overwhelmed. Like many people living in a city, he experiences frequent dropped calls and a sluggish wireless Internet connection.
Even though AT&T is trying to fix its network, he said that denying there is a problem won't win it any points with frustrated customers.
"AT&T can say that there is nothing wrong with their network all they want," he continued. "But when someone is experiencing dropped calls and no access to the 3G network every day, they take it very personally. And it is very frustrating."
Andrew Gilman, CEO of CommCore Consulting Group, which specializes in helping companies manage their brand image, agrees. He said the first thing AT&T needs to do is correct whatever problem it is experiencing. And then it needs to listen to its customers and prove to those customers that the problems have been resolved.
He said that in today's highly connected online communities, companies that refuse to acknowledge their customers' complaints do so at their own peril.
"Even if the network is perfectly fine, if several people in a social network complains, they have immediate influence over a large group of people," he said. "So even if people aren't experiencing the same problem, the negative comments have planted a seed."
Gilman said that the power of social networks has changed the game for companies who find themselves the target of negative customer sentiment.
"The world has changed over the past couple of years," he said. "A few years ago you might have been able to ignore some customer complaints and get away with it. But not anymore. With social media things spiral out of control very quickly. "
He cited the example of how Johnson & Johnson was forced last year to pull an online advertisement for its over-the-counter pain pill Motrin after it triggered protest on the Internet from consumers who thought an ad that depicted mothers with back pain carrying babies in a sling as being insensitive toward mothers. Angry consumers viewing the ads took to blogs, YouTube and Twitter to call for people to boycott Motrin, arguing the ad trivialized women's pain and the method of carrying babies.
Switchers as "satisfaction saboteurs"
Experts have said that AT&T's image problems likely go beyond its network troubles. Helmreich said that AT&T has invited trouble through its exclusive deal to carry the iPhone. About 40 percent of iPhone users dropped their carrier to get the iPhone. These customers weren't switching carriers because they wanted to be on AT&T's network; they wanted the iPhone. As a result, Helmreich argues that these customers are more likely to be dissatisfied with AT&T's service. And they are more likely to complain and to share their complaints with friends.
Helmreich points out that people with one of T-Mobile's exclusive Google Android phones or Sprint's Palm Pre are also more likely to be dissatisfied with their service if they switched providers for those phones.
"In effect, switchers can be satisfaction saboteurs if they were not already inclined to choose AT&T," he said.
Adler also points out that AT&T's marketing and public relations strategy for the iPhone also helped create animosity toward the company. He said that from the start, Apple has established itself as the more valuable brand in the relationship with an iPhone customer. Even though AT&T is making the device more affordable by subsidizing each device by at least $300 to $400 a pop, it doesn't highlight this fact to consumers. But Apple is the company that has designed the device. It sells it for $200. And it also offers the cool applications, which are either free or are relatively low cost.
"iPhone users love Apple," Adler said. "They are loyal to the brand and they love the device and all the great applications. All they associate AT&T with is dropped calls, a hard-to-access 3G network, and high network fees. They even make iPhone users pay extra for SMS. It seems crazy to me that AT&T hasn't done anything to throw customers a bone to say, 'We love you as a customer.'"
Adler said that AT&T's exclusivity deal with Apple is a gift, which AT&T should be taking advantage of to create customer loyalty. He said that AT&T likely has plenty of time to redeem itself, but the company must take steps now.
He suggested it does three things: for one, he said that AT&T must admit its network has problems and then fix those problems. The challenge from a marketing standpoint is convincing its customers that the network has been fixed. And to do that, brand expert Gilman suggests that the company use specific examples.
"Once they fix whatever problems they have, they have to get testimonials to back up those claims," he said. "Maybe they could drive through neighborhoods and show people that calls aren't dropping and that the dead zones don't exist anymore."
The second thing AT&T needs to do is to more overtly market and explain its value to the consumer.
"AT&T needs to be more aggressive in promoting what they offer the customer," he said. "All they do is say they have the fastest 3G network, which everyone who owns an iPhone knows is absolutely not true in the real world. It may be true in a lab, but not on the street."
And the third thing AT&T must do is make goodwill gestures to its loyal iPhone customers. Gilman suggests the company give out coupons or anything that shows how AT&T values its customers. Adler thinks that AT&T needs to offer customers, who are already spending a lot of money on their service, more features and services for free. But he said that free Wi-Fi at AT&T hot spots is likely not enough of a perk, since it only highlights deficiencies in the 3G network. Instead, he thinks that AT&T could offer free SMS to iPhone users renewing their contracts.
"Customers remember small gestures like that," he said. "And they tell their friends."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Apple stumbled on to the whole apps store.. if anyone remembers they were on the fence about opening up the platform.. they lucked out that it caught on. AT&T was never told that they would need to accomodate a full ISP's worth of traffic on the magnitude of what the iPhone became. So now they are in the unenviable position of playing catch up.. Apple is to blame here as they chose to stay in an exclusive contract even after they saw the growth of the apps and the subsequent traffic it would generate.
That makes no sense.
Other iPhone carriers outside of the United States seem to have provisioned and upgraded their networks just fine. Also, 3G service in some areas in the United States is much better than others.
Unfortunately, many major U.S. metropolitan areas still have horrific AT&T 3G performance. It's not like AT&T should be surprised that there are a lot of iPhone users in San Francisco, L.A. or Manhattan.
Let's face it: AT&T is a sucky cellular provider and the U.S. trails all other industrialized nations in cellular network performance. Heck, the BRIC nations have better cellular networks as well as many nations that some people would consider "third world."
By other iPhone carriers you mean outside the US... There are no where near the number of iPhones out of the US as there are here.. and not to mention that international wireless networks are years ahead of what we have.
Again... as far as american wireless carriers are concerned At&t are par for the course, comparing what we have to europe and asia is like comparing a telegraph to twisted pair, yeah its that much better out there.
Lets not forget ATT has more Iphones than any other carrier in the world.
If I had problems with my Iphone I would cancel my contract in a NY minute. That can't be the case. I still see people lined up in the Apple store buying the Iphone at 3am (5th Ave store in 24 hours)
AT&T is hurting AT&T's brand. They are their own worst enemy. They are scared sh*tless of their iPhone customers, but it's their own incompetence that has led to their current position.
They lie about their capabilities (data speeds are nowhere near advertised numbers). They overpromise and underdeliver (c.f., SMS rollout). They overcharge.
And, they lag the rest of the industrialized world's cellular networks (admittedly, so do the other U.S. cellular providers).
Almost eighty cellular providers around the world are enjoying the benefits of iPhone subscribers.
What is wrong with *you*, AT&T?
Excellent point! Taking on the iPhone simply highlighted AT&T's incompetence. Not that the others are much better, but anyone connected with Apple gets put in the spotlight. This WAS AT&T's big chance, and they blew it.
Actually Apple would be better off *not* renewing the exclusivity agreement with AT&T. By opening up to more carriers, that takes removes the burden of carrying the entire load from AT&T's shoulders, yet forces them to compete with rivals for iPhone customers (and choice is a good thing for consumers).
From a business standpoint, expanding to another carrier would mean a larger pool of potential customers, as well as more points of distribution.
Since AT&T network performance is the biggest single complaint amongst American iPhone users, Apple would also improve its customer satisfaction by letting people have a choice of carriers.
As for T-Mobile, try traveling around the country with a 3G phone. You wont see much 3G. My sister lives in Raleigh and came to NY to visit. She said "when I got in Jersey my Android phone said 3G on top, whats that?"
But once the sales started their climb, and the 3G was introduced, ATT lost all excuses. When you have a device that relies on a data hungry 3G network, along with thousands of apps, and the best mobile browser- stupidity and laziness doesn't cut it.
The simple case is ATT is responsible for their own bad image and brand, no one else. The iPhone may compound their horrible service, spotty coverage and lack of solid data network- but it is still ATT's own problem, not the iPhone or Apples'. To simply blame customers' (smooth move ATT...) data habits or preconceptions is also horrendous. Stop stalling, stop making excuses and upgrade your network like you should have done YEARS ago- INSTEAD of buying out competitors and f@cking up your service and standards.
I also think that their belief that there's still time to turn around the brand is just plain wrong. It's hard to rebuild a brand that's been battered and beaten by critical users, the media and the general public. Doing right by your customers the entire time would have made things significantly easier Ma' Bell..
Let's hope the next carrier has their act together..
If you want to talk the talk, you better walk the walk.
AT&T continues to trip over their own shoelaces and has bloody nose from all the falls.
AT&T: While you guys may not have known the exact magnitude of the iPhone's success, you were aware that Apple had already destroyed the competition in the MP3 player arena. Besides, you should have been upgrading your network for the benefit of your other customers regardless.
You did a p*ss poor job in provisioning and building out your network which affects all of your subscribers, not just those with Apple-branded handsets.
I'm an AT&T and Apple shareholder. Let's see AT&T increase shareholder value. Apple is up 1000% versus the S&P 500 over the last five years. What have you AT&T guys done, hmmm?
ATT is generally good in Los Angeles, except in the Hollywoods. North Hollywood, I get "No Service" in one spot, though sometimes it comes in as 1 bar and E, then walk 20 feet toward the street, I get 5 bars and 3G. In Hollywood proper, I get 2 bars and E if I'm lucky. But all around the city otherwise, it's 4-5 bars and 3G. It's kind of sad how ATT can't recognize these dead spots that have existed for years and fix them. It's not like these are some rural areas, nor are they skyscraper caverns. There are ample locations for additional 3G transmitters in these areas of LA, yet nothing is being done...
Marketing and pushing a faulty service does NOT make anything better! There is no value. There is NOTHING that ATT brings to the table (iPhone or otherwise) that makes them genuinely unique compared to their competitors. To imply that they need to better push value through a blitzy "we've changed" advertising is insane. What they could do to truly help their image, gain word of mouth referrals, and PROVE they've changed is to simply offer the level of service that people EXPECT when they pay those exorbitant bills. ATT, you can't push a value of your service if it isn't there..
"...for one, he said that AT&T must admit its network has problems and then fix those problems."
With the network fixed, if such a thing can be done, there will once again be value behind the marketing. Did you fail to realize that you quoted the SECOND thing that needs to be done?
Based on DKrudop said, it seems we, mobile users, have different experiences and those experiences color the way we feel about the carrier we use. I had terrible experiences with AT&T while using a simple Nokia phone. My calls would be dropped all the time while driving through Denver. Eventually I got fed up and switched to Verizon a few years back and I stopped having problems immediately. I can also say that I'm satisfied with Verizon's customer service--not that I needed to call them more than once or twice over the years.
This might seem like a crazy idea, but it would give them instant credibility and their customers would be happier overall. Many would be willing to get on a waiting list for a good phone on a good service.
VZW's customer service alone made me go insane. I have been a call center supervisor and I would probably fire every single person I spoke to at VZW's customer service. They were rude, crude, and could give a sh*t less if you were there customer. In fact, even if the iPhone came to VZW tomorrow, I probably wouldn't switch.
The only place I have an issue getting signal is at my dad's house in Glenwood area. Everywhere else 5 bars with 3G.
Having dealt with VZW with my parents, I was not that impressed. And having dealt with SPRINT as a customer? NEVER AGAIN! T-Mobile seemed fine, but their signal was so week in Los Angeles that I only had them for 2 weeks before I returned the phone and canceled. And the sad part was that the T-Mobile store I bought the phone from couldn't even get a signal most of the day...
And no, it is ATT who is junking up their own brand. The GSM carriers are the closest ones to understanding that consumers simply want them to be "dumbpipes" like their European counterparts. By not even doing this well, ATT is failing, and on a national stage that they built for their own hanging.
No question, when the iPhone exclusivity agreement goes away, they are going to topple down to 3rd.
A groom may be all lovey dovey at the altar when pappy is standing there with a shotgun, but if he really loves the girl, he won't sneak away as soon as pappy falls asleep.
Apple has made it significantly hard to unlock (and keep unlocked) my iPhone. I do not want to go through the process of restoring and then unlocking my phone each time an update comes out. I also don't want to lose a few of the services that my iPhone receives exclusively from AT&T. That said the day is coming that I may be willing to risk that and just unlock my phone and switch. Hear me AT&T - I will jump ship the day your exclusive contract ends!
Apple needs to also accept a little responsibility here as well as a brand hit. They do financially profit from this exclusive agreement with AT&T. Since they choose to be in bed with AT&T as well as making sure their phone stays locked down with each update Apple is losing points fast with me also. As soon as I am sure that HTC and Android have a product that competes I may completely jump ship off this whole iPhone craze (wow - never thought I would say that!)
I am on AT&T and I have an iPhone. I have long been annoyed with AT&T and would gladly jump ship if given the chance. However, I love my iPhone and won't be leaving it behind. The only time I'll be able to leave is if the exclusivity is broken.
To be honest, AT&T has been great in my area in terms of coverage. I almost always have full 3G connection wherever I go and I don't even remember the last time I had a dropped call. The problem for me, with AT&T, is that they are greedy bastards. 30$ required extra per month for data, and then an ADDITIONAL 20$ for unlimited texts? Even Verizon, which in my area has been known to be one of the more expensive carriers, gives all of that for 69$ per month. How much at AT&T? 89$ per month. It's just obscene.
<rant>In general, though, I have a problem with all major U.S. carriers. They are constantly throwing minutes at us. The most basic plan gives 450 minutes per month normally, with unlimited nights and weekends, unlimited calls to wireless devices, etc etc. I end up using like 30 minutes of my actual paid for minutes. I have like thousands of rollover minutes and they just expire at the end of the year, ever year, wasted. Why can't they lower the number of minutes in the most basic of plans? I text a fair amount, email, and chat, browse the internet, etc etc so the money spent on data & text is worth it. But almost all of my friends and family are on wireless devices so I get unlimited calling to them. </rant>
i mean, there must a couple hundred words there... and i can't go around actually LEARNING anything if i want to just rant and rave like a lunatic about stuff i am totally ignorant of.
so, yeah... you wrote something that i didn't bother to read, then commented on it. wow, this IS fun. you're on to something.
But I think that as soon as the iPhone is not exclusive anymore, you'll see a $30 "all-in" data plan for the iPhone. That $20 text plan will go away. They will have to do that to compete with the other carriers. Apple has really started a renaissance in this business, without even meaning to. First, they raised the bar for smartphones and other companies have been forced to offer far better phones with better interfaces, app stores, etc. And once the iPhone goes non-exclusive, it will spark a rate war among carriers to win those iPhone customers, something that no other phone has ever been able to do. I mean, no matter how popular the RAZR was when it came out and went multi-platform, it never drove rates the way the iPhone will...
All of you iPhone owners that are planning an exodus are going to be in for a shock once Verizon or whomever lands the next contract.
1- Verizon is CDMA, while ATT is GSM. Your existing iPhone will be incompatible with the new network of choice for Apple and the iPhone. Meaning, even if you wanted to, you wouldn't be able to port your iPhone over to a non-ATT network.
2-ATT resists unlocking the iPhone. Even if you've paid your dues (all ~$1,680 of them) to ATT, they are under no obligation to unlock the phone. Apple and ATT consistently report that unlocking the phone is dangerous and opens the device to hackers, etc. The iPhone is permanently tied to ATT and their network. Unlocking the phone by bypassing ATT or other methods may result in a bricked iPhone down the road.
3- Apps. Apple and ATT are hoping that you'll stick around because of the hassle of porting apps (if it'd be even possible) to a new iPhone. All that money you've spent on apps would be locked to your iPhone, and giving ATT a good foothold into keeping you there.
ATT and Apple really have a mess on their hands, but I don't think that any transition away from the iPhone or ATT will be as smooth as everyone assumes it will be.
1) Apple already expects you to buy a new iPhone every time they add a new letter to the name, so that is no different.
2) See above
3) Unless Apple went through a major platform shift(extremely doubtful) then all existing programs would continue to work on a "new" iPhone. The only thing that has to change is the radio, I read somewhere, that the same company that supplies the gsm radio for the iPhone also makes a CDMA rafio of the same specs.
Existing iPhones are GSM, not CDMA. You'd have to have Apple making a deal with T-Mobile in order for the phone to work with any other carrier besides ATT.
My main argument here still stands- you can't switch without buying another iPhone, therein making it extremely difficult to switch as many others are saying they'd like to do.
For many, the prospect of having to buy another iPhone, possibly paying an ETF, and backing up all APPS and data/contacts isn't worth it. (Consider it, you can move to Verizon once they land iPhone 4G, but it'll cost you ~$200 ETF, and if Verizon maintains iPhone costs, another $100-$200 for a new phone. $400 to dump ATT is an extremely expensive proposition)
You're right on target about ATT being arrogant, cheap, lazy and not stupid though.
I think every carrier in the world is GSM except Verizon in US and Japanese carriers. I think this is the only country where the govt never set a national standard. Our "hands off, let the market decide" in telecom has left us with incompatible systems, high prices, and low performance relative to other countries.
And just to be clear, ATT resists unlocking ALL phones. You have to do that on your own. Or buy one unlocked. But you can still use it on ATT. I used an unlocked Sony for 2 years on ATT without issues. And I could have switched to T-Mobile at any time.
With Sprint, I constantly had bad service, dropped calls, no signal at home... but I am happy to say I have not experienced any of that with AT&T.
I guess in larger cities, I can see how an over crowded network would cause much hatred and frustration at ANY carrier... but where I live, the population is around 250k and AT&T doesn't seem to have a problem handling that load.
Don't deny your problems, AT&T; FIX THEM.
You really find the evil one when you call into AT&T customer service and realize you've just entered hell.
Hey AT&T, Apple was once again rated number 1 in customer service year after year after year.
Pulling stunts like forcing customers of the iPhone to wait nearly four months to enable MMS after Apple released the support on the phone, while all the other smart phones under AT&T presently have MMS. Seems to me this was just more punishment towards iPhone users segregating them out.
No AT&T is screwing themselves and taking Apple down with them.
The 2 times I called AT&T, I was directly patched to Apple for iPhone support.
Perception isnt always reality. I've had Sprint for 8 years now and while I admit they werent the greatest in the beginning. They have been pretty f***ng fantastic as of late.
You also dont need to call them nowadays. You can simply log into your web account and chat with a rep.
So maybe things are ******* awesome now. But so what? Oh, and for good measure, leaving Sprint was such a hard process (include continuing to bill for months after cancelation) that it makes me never want to try again.
And yes, the iPhone support line at ATT is top notch. You can say Sprint CS is ******* awesome, but since I rate my interactions with iPhone support at ATT (activating 4 different iPhones) as 100% positive, why would I want any other experience?
Of course Sprint isn't perfect, but it's not as bad as people say. I love your jabs at me by the way. You seem like the typical iphone *** hole user.
I had the Samsung Instinct up until the release of the iPhone 3G S. So I assure you, my dealings with Sprint were very recent and very often. The CS side of Sprint was worse their their shoddy service. The only place to get any REAL valid help was on the buzzaboutwireless forums where info was passed to/from Will and Sarah who would then query the engineers about the issues. I was with Sprint for roughly 9 years and the service was awful. Lucky for me, my first few phones were just basic flips with not a lot of bells and whistles, so I did not have much reason to contact them until the Instinct came out. The Instinct had so much potential, but Sprint was completely retarded in dealing with it. So you couple bad service, on top of horrible support and throw in a phone with numerous problems and you can see why I left for the iPhone.
I can vouch for ika's billing statement. Even though I canceled my contract, they have billed me for 2 proceeding months. I keep telling them that I will not pay for service after I closed my account with them, but they keep on insisting and keep on sending me bills. I paid my ETF and the part of the month left on my bill... anything after that is due to their own retarded accounting procedures and I will not pay for them being stupid.
Also, the iPhone support is absolutely amazing, but hey, when dealing with those fine folks at Sprint for the last year, anything bordering on average level support would appear amazing.
Sprint has since released 2 more versions of the Instinct, and they still have not figured out the reasons many of us left Sprint or ended up hating that phone. The Instinct HD seems to be on track, but it's what the original Instinct should have been. Now they are just playing catchup and still have that same lame ass interface and crappy ass OS.
Oh really? Being locked into a contract at $89/mo for two years costs $2,136. Not much of a subsidy. On top of that, the price doesn't go down once the contract expires.
Unfortunately, for AT&T even if a customer can't do the simple math in their head, there's a calculator in the phone to do it for them. Pointing out what a bargain they're getting will just aggravate them even more.
Regardless of what phone you use, for example the $49. rollover plan is the same no matter what phone is being used and if there is a smartphone in use then they all are assessed a minimum of $30. for a data plan. Again the profit in the plan pricing, but it applies to all phones and smart phones.
They have guaranteed revenue from a customer for two years with a given profit margin on those plans.
But not the cost of the plans by the 24 month factor. You'd get that anywhere from any carrier.
AT&T's bottomline is affected by multiplying those small profit margins by the xx million customers the iPhone brings to them locked in for two years.
AT&T is getting you from both ends.
Anyway, while most phones are given an MSRP that is out of line with reality, the iPhone was not one of those phones. After all, you look at the iPod Touch, and was priced HIGHER than the subsidized price of the iPhone by quite a bit, despite lacking the telephone radio and integration of that radio into the function of the phone. The current 32GB touch is priced the same as the subsidized 32GB iPhone, but without the radio or a camera. Now, is the radio+camera worth $300? Heck no. But it's not free, either. So I'd say you are 1/2 right. It's a partial ripoff. The subsidy is more like $100. But, my guess is that it's not ATT who is pocketing the $200 when you buy a contract free/replacement iPhone. It's Apple, as I would bet that ATT's wholesale price is more than $299.
But the biggest beneficiary of the subsidy is the government. They charge tax on the FULL price of the phone, not the price you pay. Then they collect tax on your service every month. So even though your contract helps pay for your subsidy, you are taxed on BOTH. This is why the government will NEVER step in and put an end to this fake pricing of phones. They make too much money on the scam...
http://forums.macrumors.com/showthread.php?t=791609
I don't understand 1 thing. There are several things done by blogger and other news networks that helped change the way we think and the way companies think...Y can WE(customers along with bloggers) start a campaign against these networks. There is one advantage here. if the networks change with time, you can see real innovation. Apple took an attempt to change this and succeeded in many ways. Google, Palm and other are following this...This inturn is helping US(the customers who use these phones). I dont understand one more thing. how is Voice transmission related to Data(3G or what ever)? if there are more number of ppl accessing 3g, data should be slow not the voice connection....Any ways..I have one suggestion to moderators in this Portal. Please create a forum which will include all the states. Now, ask the customers to create sub entries under their state for cities and town and each city will have further sub entries. This will help customers to complain against the networks, inform us to get the right network, and ATT and other to realize and open their eyes to see which areas are affected more...
I would really be happy to see something like as an Iphone App too....(hopefully ATT agrees to approve it)
- by sharmajunior October 2, 2009 7:23 AM PDT
- Guess what...just switched from AT&T to Verizon 3 days ago and have never been more happier The AT&T reception bar used to go up and down like an equalizer, called and complained 2 times...the third time...just switched and signal is steady as ever.
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- by cvaldes1831 October 2, 2009 11:47 AM PDT
- It is unlikely that Apple would terminate iPhone usage on AT&T's network so the problem wouldn't simply vanish.
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Showing 1 of 7 pages (215 Comments)BTW, I was using a regular phone and not any fancy iPhone, this is an overall poor signal problem for AT&T which will be solved when and if Apple takes away their iPhone privileges. Sometimes you gotta something away in order for the other person to realize how easy going they had it.
More likely, Apple would end their exclusivity agreement with AT&T and open up to one or more other carriers. Some of the network performance *might* improve as AT&T builds up their infrastructure or as customer "churn" lightens the network load, but to think that Apple would kick AT&T to the curb is naive.