iphone 3g: AT&T's success with it and globe's failure at it

we had written extensively in this blog about globe's iphone 3G launch in the philippines. our view was that their launch strategy for the iphone 3G was a blunder, mostly on the the over-pricing strategy they adapted for the iphone 3G. globe over-priced the iphone 3G, in fact they initially wanted to sell it at a higher price than what they eventually sold it.

globe did not adapt the pricing strategy of AT&T in the US where they decided to take a hit on profits trading that off for higher unit sales and higher market share. we said then that globe's pricing strategy may have generated for them high margins but it lost them the opportunity for higher unit sales which could very well have recovered the lower margin per unit they had to take. more importantly, globe lost the opportunity to take market leadership away from smart telecoms.

we said that that it was our view that at the right price point, the iphone 3G will propel globe into market leadership.

looking now at the AT&T launch in the US for the iphone 3G, we think our views then were correct. AT&T sold 17 million of iphone 3G units since launch and has increased their subscriber base and market share. AT&T officials confirm the iphone 3G has been a success for them. it had been so successful that AT&T has been reported to be negotiation with apple to extend their exclusivity contract of being the lone seller of the iphone 3G beyond the contract up to 2011.

that is the kind of market share power that globe missed when they priced the iphone 3G at a ridiculously high level, the opposite strategy AT&T took. globe has been 2nd for such a long time, they should have taken this once in a lifetime opportunity to take leadership from smart telecoms.

AT&T To Apple : Come On, What's Two More Years?
AT&T just won't let go.

According to a report in The Wall Street Journal AT&T is pushing Apple to continue the carrier's exclusive rights for the now-iconic iPhone for two more years.


Quoting unnamed sources, the Journal wrote that AT&T CEO Randall Stephenson is looking to continue AT&T's iPhone exclusivity through 2011. The pair's existing relationship is set to expire this year. AT&T has been the iPhone's exclusive carrier in the U.S. since the 2007 launch of the first-generation iPhone and continued through with the Apple iPhone 3G that was released in 2008.

Apple has been tight-lipped about its future iPhone carrier plans, telling the Journal "we have a great relationship with AT&T."

The iPhone has been a cash cow for AT&T since its 2007 launch—it is estimated that roughly 17 million iPhones have been sold in just two years. In the second half of 2008, AT&T added 4.3 million iPhone subscribers, 40 percent of whom were new customers for AT&T.

read in full here: http://www.crn.com/mobile/216500793;jsessionid=RY0YPPZLBWMZOQSNDLPSKH0CJUNN2JVN

AT&T: iPhone Boosting Wireless Margins


By Joseph Palenchar -- TWICE, 4/23/2009 7:27:00 AM

Dallas — AT&T said it activated 1.6 million iPhone 3G devices in the first quarter, up anywhere from 50 percent to 60 percent compared to year-ago activations of 1 million to 1.1 million estimated by the Yankee Group.

“It’s a real win for them,” said Yankee director Carl Howe. The number of activations is “surprising” for a “fairly premium priced product” during the economic downturn, he said.

“It’s still a terrifically selling product for AT&T,” he added, even though the number of activations is down from 1.9 million during the fourth quarter of 2008 and down from 2.4 million during 2008’s third quarter, when sales soared because of the launch of the subsidized 3G version of the iPhone. “You should expect seasonality,” he said.

In the third and fourth quarters of 2008, year-over-year iPhone activations were up 114 percent and 110 percent, respectively. Precise comparisons between first-quarter 2009 and 2008 iPhone activations can’t be made because AT&T hasn’t disclosed the number of iPhone activations during 2008’s first half.

Said AT&T chairman Randall Stephenson, “I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook.”

The company’s iPhone strategy, combined with operation improvements and reduced churn rates, produced a sequential gain in AT&T’s first-quarter wireless service margins, before amortization and depreciation, the company said.

The margin gain, the company said, in part reflects the higher revenues generated by iPhone subscribers, who spend around 1.6 times more than other postpaid-service subscribers because of their data usage. iPhone users also churn less frequently than other postpaid-service subscribers, AT&T said.

In other iPhone-related financial statistics, AT&T said more than 40 percent of the iPhones activated in the first quarter, or about 640,000, were sold to people new to the AT&T wireless network. As a result, iPhone purchasers accounted for about 73 percent of the 875,000 net new postpaid subscriber additions in the quarter. Total net additions, comprising prepaid and postpaid service, hit 1.2 million to bring the carrier’s subscriber base to 78.2 million.

read in full here: http://www.twice.com/article/CA6653635.html

read posts on globe's iphone launch here: http://the-wawam-file.blogspot.com/search/label/globe