AT&T to spend $150M on Lumia launch, more than it did with iPhone

Posted:
in General Discussion edited January 2014


In order to help bolster launch sales for Nokia's new Lumia 900 handset, exclusive U.S. carrier AT&T is willing to spend up to $150 million in ad money, more than it spent on Apple's iPhone.



The $99-on-contract Windows Phone, which officially went on sale on Sunday, is seeing heavy investment from AT&T in an attempt to stave off competition from other major carriers that are eroding the telecom's smartphone lead, according to Ad Age.



AT&T, which used $3 billion in advertising money to become the second-largest spender in the country in 2010, declined to comment on the exact Lumia campaign figures, though sources say that the company will put in some $150 million over the coming months.



Smartphones are lucrative products for carriers and generate profit on required voice and data contracts despite high subsidy costs.



"The bulk of the growth for carriers is coming from smartphone subscribers," said Piper Jaffray telecom analyst Chris Larsen. "They generate higher monthly recurring fees and more revenue."



Since losing its iPhone exclusivity in early 2011, AT&T has been ceding ground to other major carriers that now have access to Apple's handset as well as a strong existing base of Android users. For example Verizon, the nation's largest telecom by subscribership, is seeing its already popular Droid brand sales augmented by the iPhone, which was made available on its network about one year ago.



According to market research firm ComScore, before AT&T lost iPhone exclusivity it boasted more than 24.7 million U.S. smartphone subscribers over the age of 13, while Verizon had only 17.8 million. As of February, roughly one year after the iPhone became available on Verizon's network, AT&T's smartphone lead dwindled to only 1.6 million users.



As Verizon closes the smartphone user gap, AT&T is putting its weight behind the Lumia 900 just as it leveraged the iPhone's exclusivity for nearly four years.



The nation's second-largest carrier will run ads in tandem with Nokia, and while there will be some cross-campaign tie-ins, AT&T is expected to market the Lumia 900 as part of its "Rethink Possible" brand.



"We are taking North America and U.S. market very seriously," said Valerie Buckingham, head of marketing for Nokia in North America. "AT&T has a lot running on the success of 900 as well."











To drum up interest, AT&T offered the handset for free as part of a preorder promotion and said the phone will get "prime exposure" at the company's 2,200 stores.



"With our operator partners, we're seeing a lot of support and desire for a third ecosystem," Buckingham said. "We're definitely stepping up to the stage at the investment you need to be successful in this category. You will definitely be seeing this campaign."



Analysts estimate Lumia 900 sales to fall anywhere between 370,000 to 680,000 units with a worse case scenario netting only 140,000 a quarter. In comparison, AT&T activated 9.4 million smartphones in the fourth quarter of 2011 alone, 7.6 million of which were iPhones.



[ View article on AppleInsider ]

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Comments

  • nealgnealg Posts: 132member
    Interesting move by AT&T. It would seem to me this move is meant to try to draw the Android users away from the other carriers, although I am sure they will take any iPhone defectors with this campaign as well.
  • noahjnoahj Posts: 4,500member
    Ugly phone, and an Ugly interface. If that is their best promotional photos I doubt the device will be a runaway success out of the gate. It might take off IF it works well...
  • digitalclipsdigitalclips Posts: 15,205member
    Fire Sale to follow ....
  • davemcm76davemcm76 Posts: 259member
    A couple of people at work have got the Lumia 800 and from the few minutes I've spent playing with one they seem a lot better screwed together than the cheap plastic android crap you tend to get.... seemed pretty fast and responsive and quite a decent phone once you get past the fugly...



    The major down side for me is still Windows Phone 7... I really don't get the huge "doesn't all fit on the screen" fonts and there is far too much random sideways scrolling for my liking... both seem very odd UI choices and sadly both seem destined for desktop windows too in Windows 8 and Metro....
  • sandman619sandman619 Posts: 94member
    A carrier would need to heavily promote devices from Nokia, which has lost its luster in recent years, after failing to make the timely course changes after the introduction of both the iPhone & Android. There's should be little doubt that microsoft is heavily subsidizing AT&T's promotion efforts for Nokia as well



    Cheers !
  • red oakred oak Posts: 525member
    This could be a very public, spectacular fail. And if it does fail, Apple is going to gain substantial leverage



    This is it for Microsoft and Nokia... Fly or die time
  • zeromeuszeromeus Posts: 177member
    Quote:
    Originally Posted by AppleInsider View Post


    In order to help bolster launch sales for Nokia's new Lumia 900 handset, exclusive U.S. carrier AT&T is willing to spend up to $150 million in ad money, more than it spent on Apple's iPhone.



    Whatever AT&T spent on promoting the iPhone is a total waste of money. The iPhone sells itself without any need for advertisement.



    Now they spend more money to advertise for this than the iPhone should not come as a surprise since they NEED to advertise this product heavily in order to sell it. Not a surprise at all!
  • tnsftnsf Posts: 202member
    Wireless advertising is pretty complex. You can bet that for every dollar AT&T spends on Lumia ads that Microsoft and Nokia are agreeing to spend X number of dollars as well. AT&T's budget for the Lumia is not solely based on confidence in the device, but also confidence that dollars spent by Microsoft and Nokia will drive new customers towards AT&T even if they don't ultimately select the Lumia handset.



    Apple doesn't do quite the same thing.
  • r00fusr00fus Posts: 245member
    The real story is that, for AT&T, the iPhone is too successful. People don't buy AT&T anymore, they buy the iPhone (in large part), and the power and profits are shifting to Apple... sure they make more money, but they're desperate to regain the narrative.
  • majjomajjo Posts: 574member
    Quote:
    Originally Posted by nealg View Post


    Interesting move by AT&T. It would seem to me this move is meant to try to draw the Android users away from the other carriers, although I am sure they will take any iPhone defectors with this campaign as well.



    I remember reading a while back that the iPhone provides the lowest margins for the carriers (can someone link the article? I think it was at AI, I can't step away from work for too long right now to look it up). So I can understand why they might want to promote phones other than the iPhone.
  • aaarrrggghaaarrrgggh Posts: 1,519member
    Quote:
    Originally Posted by r00fus View Post


    The real story is that, for AT&T, the iPhone is too successful. People don't buy AT&T anymore, they buy the iPhone (in large part), and the power and profits are shifting to Apple... sure they make more money, but they're desperate to regain the narrative.



    Exactly. This is about AT&T wanting a competitive marketplace that isn't controlled by one or two players. It also saves them money because the subsidy is likely much less than an iPhone.
  • darkvaderdarkvader Posts: 215member
    This thing has two strikes against it - it's running M$ garbage, and it's from Nokia.



    Nokia has always built garbage phones, I've used a few back in the day and they were horrible. The only reason they were popular was that they were cheap.



    But these days if you want cheap there are plenty of good Android phones out there, and there's the iPhone. M$ is wasting their time even trying, and I'm not sure Windoze phone 7 can even be considered trying, it's THAT bad.



    I'm really looking forward to M$ shooting off their own feet with Windoze 8 on the desktop too.
  • lkrupplkrupp Posts: 3,876member
    Quote:
    Originally Posted by Red Oak View Post


    This could be a very public, spectacular fail. And if it does fail, Apple is going to gain substantial leverage



    This is it for Microsoft and Nokia... Fly or die time



    Which means the spin machines will be running 24/7 on overdrive. Lots of money will be flashed at tech bloggers, pundits, analysts, c|net writers, to publish positive reviews and spin the negatives.
  • lkrupplkrupp Posts: 3,876member
    Quote:
    Originally Posted by r00fus View Post


    The real story is that, for AT&T, the iPhone is too successful. People don't buy AT&T anymore, they buy the iPhone (in large part), and the power and profits are shifting to Apple... sure they make more money, but they're desperate to regain the narrative.



    Quote:
    Originally Posted by aaarrrgggh View Post


    Exactly. This is about AT&T wanting a competitive marketplace that isn't controlled by one or two players. It also saves them money because the subsidy is likely much less than an iPhone.



    What subsidy? Microsoft and Nokia are probably paying AT&T to sell the phone.
  • majjomajjo Posts: 574member
    Quote:
    Originally Posted by lkrupp View Post


    Which means the spin machines will be running 24/7 on overdrive. Lots of money will be flashed at tech bloggers, pundits, analysts, c|net writers, to publish positive reviews and spin the negatives.



    Reviews are already out. Anandtech was pretty positive on the phone, and that's probably one of the least-biased tech sites out there.
  • sockrolidsockrolid Posts: 2,515member
    Lumia 900?



    Is that the new Hyundai?
  • sockrolidsockrolid Posts: 2,515member
    Quote:
    Originally Posted by DarkVader View Post


    [...] I'm really looking forward to M$ shooting off their own feet with Windoze 8 on the desktop too.



    Me too. Windows 8 (desktop) is the answer to a question nobody asked.



    Windows 8 on mobile ARM devices actually is an answer to a specific question.

    The question is "WTF are you going to do about iPad, Ballmer?"

    And boy is Windows 8 on mobile ARM devices a terrible answer.
  • jacksonsjacksons Posts: 244member
    Quote:
    Originally Posted by SockRolid View Post


    Lumia 900?



    Is that the new Hyundai?



    No. It's the top selling phone on amazon.
  • aaronjaaronj Posts: 1,582member
    The Lumia 900 looks like an ok phone, to me. I certainly wouldn't buy it, but I can imagine that there would be people who would.



    I don't get the whole Windows thing, but, again, I am sure there people who do.



    As someone else said, the iPhone sells itself. Nokia and Windows need help. They are trying to jump into a saturated market, one where iOS and Android control somewhere between 80% and 85% of the market already. That's a difficult move.
  • tenchi211tenchi211 Posts: 40member
    Quote:
    Originally Posted by r00fus View Post


    The real story is that, for AT&T, the iPhone is too successful. People don't buy AT&T anymore, they buy the iPhone (in large part), and the power and profits are shifting to Apple... sure they make more money, but they're desperate to regain the narrative.



    Agreed. The moment AT&T decided to sell the iPhone, they lost their dominant position. It's the same for Verizon. That's one reason why I feel they both try to push alternatives as much as they do. The iPhone is the number one selling phone on EVERY carrier. They have lost control, and want to get some of it back, but it's too late for that. Apple changed the game with the iPhone, and I don't see it changing back.
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