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Verizon iPhone to attract 9 to 12 million new US users for Apple

post #1 of 71
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Analysts predict Apple's expansion of the iPhone to Verizon in the US will net 9 to 12 million iPhone subscribers this year, nearly as many as AT&T attracted in 2010.

A new report filed by the Wall Street Journal said that analysts are closely watching the iPhone's expansion, with "many" agreeing that Apple "will likely sell 9 to 12 million iPhones on Verizon's network this year."

It contrasted that with estimates from Piper Jaffray & Co., which said AT&T sold 11.1 million iPhones in the first three calendar quarters of 2010, and around 14.5 million in the full year. AT&T's iPhone sales account for 12 percent of Apple's revenue and 30 percent of its iPhone unit sales, the report noted.

Piper Jaffray analyst Gene Munster expects Verizon to add 5 percent to Apple's overall sales with 9 million new units this year, but said the new deal could be twice as sweet if Verizon pursues attracting new iPhone subscribers rather than just trying to woo AT&T subscribers into switching.

Analyst Brian Marshall of Gleacher & Co. said Apple's new deal with Verizon could upgrade 5 percent of the carriers' existing customers to iPhones in its initial launch quarter, a transition that would be faster paced than AT&T's iPhone launch, which began in 2007 with a far more expensive model.

Marshall estimates that AT&T has around 17 million iPhone subscribers, but said "over time Verizon could be even bigger than that," setting an initial estimate of 12 million new iPhone users on Verizon this year.

The smartphone race

Verizon had 93.2 million subscribers at the end of September, making 12 million new iPhone users nearly 13 percent of its subscriber base. AT&T has 92.8 million subscribers, so its estimated 17 million iPhone users represent more than 18 percent of all users on its network.

AT&T and Verizon, along with the smaller Sprint and T-Mobile, have been long been battling for new subscribers and to retain their existing ones. However, since smartphones began to emerge over the past few years, the goal has shifted from new subscribers (who are harder to find) to upgrading existing subscribers to more expensive data contracts.

The iPhone was the first mass market smartphone in the US to successfully (and rapidly) encourage millions of users to sign up for more expensive plans, propping up AT&T's weaker network. Despite having slightly fewer overall subscribers than Verizon, AT&T has a larger mix of smartphone users, thanks in large part to the iPhone.

Verizon's smartphone mix was almost entirely represented by RIM's BlackBerry users through the end of 2009, but after RIM's attempts to deliver the Storm as an iPhone alternative flopped in 2008 and again in 2009, Verizon turned to Android licensees to deliver a credible alternative to the iPhone, which has been exclusive to AT&T in the US since it launched in 2007.



Verizon's "Droid" branded marketing blitz, which began in late 2009 with Motorola's Droid and HTC's Droid Eris, helped to nudge Motorola back into profitability and induced HTC to focus more resources on Android than the slow selling Windows Mobile phones it had been making.

However, with the launch of iPhone 4, growth in Verizon's Android sales appears to have leveled off, sending the carrier back into negotiations with Apple.

Verizon picked up the iPad last fall, and is expected to heavily promote the iPhone this year. Its next new wave of Android devices supporting the company's LTE data network and promoted and last week's CES even, aren't expected to hit until the second half of the year.



AT&T vs Verizon

Verizon is expected to attract at least some AT&T iPhone users who are affected by their carrier's poor level of service, but the Wall Street Journal report cited Forrester Research analyst Charles Golvin as saying that "initial sales will mostly involve existing Verizon customers who want to upgrade to the iPhone and Sprint Nextel Corp. and T-Mobile USA customers who weren't willing to switch to AT&T because of its poor network reputation."

AT&T has worked to tie existing iPhone users into two year contracts, particularly family and business plans that provide stronger incentives to stay put. The company also recently offered the iPhone 3GS for just $49 with a contract. Verizon is said to be offering the iPhone with its existing contracts, which are very similar to AT&T's.

Kuo Ming-Chi, an analyst with Concord Securities and formerly DigiTimes of Taiwan, has estimated that Apple's Chinese manufacturing partners will ship 7.1 million CDMA iPhones that can work with Verizon's network in the first quarter. While those devices won't work on AT&T and other GSM providers globally, they could be sold to other CDMA carriers in China, Israel, South America and India, and may have the potential to be unlocked for use on Sprint's network in the US.
post #2 of 71
I am guessing a decent number will be from SF, NYC, places where there is no 3G service from at&t. There may be others, but I don't know anyone switching to Verizon. They are all existing customers wanting to switch from either a feature phone or BB.
post #3 of 71
Quote:
Originally Posted by AppleInsider View Post

and may have the potential to be unlocked for use on Sprint's network in the US.

Provided sprint allows it to be provisioned. It's said they aren't too keen on allowing devices on their network that they don't sell.
post #4 of 71
Whatever makes my shares of Apple stock go up, I'm fine with it.

Verizon's data plans similar to AT&T for now. It will only be until after the two sides have plateaued regarding sales, that is when the fight to have the better plan to attract the table scraps of remaining potential customers by incentivizing with a one-upmanship begins, to the benefit of all of us.

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post #5 of 71
Quote:
Originally Posted by ghostface147 View Post

Provided sprint allows it to be provisioned. It's said they aren't too keen on allowing devices on their network that they don't sell.

I tried to activate an unlocked CDMA Motorola phone and they wouldn't do it. They told me they only activate sprint branded phones.
post #6 of 71
I think this will severely impact Android sales. I think we'll even see people switching from Android to the iPhone. The iPhone's poor service on AT&T reached the level of pop culture in the US, being routinely featured on SNL and late night talk shows. It was also a major part of Verizon's campaign against the iPhone. This is now coming to an end (with no less than Verizon itself making the announcement). That's a big deal in terms of public perception.

Since there's no way any of the so-called advantages of Android touted by Android fans (openness, customization, etc) have played any significant part of Androids growth, it's likely most Android customers purchased Android phones because they wanted something iPhone-like but did not want to switch carriers. It is, after all, a copy of the iPhone, so we can assume anyone purchasing an Android phone was a potential iPhone customer. Now the only thing separating the iPhone and Android phones is cost.

I also find it unlikely that Motorola, HTC, et al, have significant brand name recognition or customer loyalty. Android has been primarily associated with Verizon itself through it's Droid campaign in the US and that's now also coming to an end. No doubt a great many Android purchases were stopgap measures by people who are waiting for the iPhone on Verizon. If it's not too difficult for them to switch, I think many of them will do so.
post #7 of 71
Quote:
Originally Posted by ghostface147 View Post

I am guessing a decent number will be from SF, NYC, places where there is no 3G service from at&t. There may be others, but I don't know anyone switching to Verizon. They are all existing customers wanting to switch from either a feature phone or BB.

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.
post #8 of 71
Quote:
Originally Posted by shadash View Post

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.

Consider also the number of people who remained on TMobile or Sprint because ATT didn't provide good service where they lived. I think using Verizon's total smartphone users, and taking a percentage of that, understates the potential size of the Verizon iPhone market.
post #9 of 71
Which is why I said there may be others. I just know that SF and NYC get the most publicity.
post #10 of 71
Quote:
Originally Posted by shadash View Post

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.

Apple would do well if 6 million current iPhone owners bought new verizon iPhones--that would be a huge bonus. (Not that I think AT&T's carnage would be that bad.)

In terms on existing Verizon subscribers switching, I figure many of the Apple fans have already been siphoned off and many of the haters have migrated over...

I am curious to see what happens!!
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post #11 of 71
I'll be staying with AT&T. Aside from some connectivity issues last summer, my service with them has been trouble-free. Plus I like the rollover minutes. If there is a large exodus from the carrier to VZ, that might not be a bad thing as far as giving the network some breathing room. I won't be among them though.
post #12 of 71
If Verizon achieves 9 to 12 million iPhone sales in twelve months, that is an average of 173,000 to 230,000 sales each week.

I can see the Android sales graph taking a steep dive over the next few weeks/months, and these guys don't want to be sitting on inventory based on Android sales so far and I'm more interested in seeing the reaction from manufacturers of Android-based phones, given that a lot were sold "buy one get one free".
post #13 of 71
I think that most of the Verizon "die hard" Apple fans have already purchased an iPhone (already went to AT&T). Outside of NY and SF, why switch back? If there are any disgruntled Verizon Droid users, they'd buy a new iPhone....but it depends on where they are on their current 2 year Droid contract.
post #14 of 71
Quote:
Originally Posted by shadash View Post

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.

I'm sorry but I've never experienced a problem with ATT's service here in NYC. The only place my phone doesn't work is at work and on the subway and in both places my MiFi card doesn't work either. Also, when I go to Texas Verizon's service stink there. I used to live in an apartment where the only phones that worked were ATT phones. So I think the negative stuff about ATT is mostly hype.
post #15 of 71
Quote:
Originally Posted by ghostface147 View Post

Provided sprint allows it to be provisioned. It's said they aren't too keen on allowing devices on their network that they don't sell.

Quote:
Originally Posted by crisss1205 View Post

I tried to activate an unlocked CDMA Motorola phone and they wouldn't do it. They told me they only activate sprint branded phones.

That just seems like poor business. Are they trying to go under?


Quote:
Originally Posted by cameronj View Post

Consider also the number of people who remained on TMobile or Sprint because ATT didn't provide good service where they lived. I think using Verizon's total smartphone users, and taking a percentage of that, understates the potential size of the Verizon iPhone market.

I dont think the AT&T fallout will be as big as people think. I do think Verizon will best AT&T in retention and new subscriber numbers this next quarter because of the iPhone. The real movement will be from those that simply couldnt or wouldnt move to AT&T will migrate from the lesser carriers to Verizon.
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post #16 of 71
There are some issues in NY and SF, but with 93 million customers there will also be some unsatisfied customers. I think that Price plays a key role.
post #17 of 71
Quote:
Originally Posted by solipsism View Post

I dont think the AT&T fallout will be as big as people think. I do think Verizon will best AT&T in retention and new subscriber numbers this next quarter because of the iPhone. The real movement will be from those that simply couldnt or wouldnt move to AT&T will migrate from the lesser carriers to Verizon.

I agree that the expected churn from ATT to Verizon is probably overstated. However, I am not so sure that there will be a lot of migration from Sprint and T-Mobile - so many of their customers are with them specifically because of their lower plan prices. I think most the Verizon iPhone sales will come from inside Verizon's existing customer base.
post #18 of 71
Quote:
Originally Posted by poke View Post

I think this will severely impact Android sales. I think we'll even see people switching from Android to the iPhone. The iPhone's poor service on AT&T reached the level of pop culture in the US, being routinely featured on SNL and late night talk shows. It was also a major part of Verizon's campaign against the iPhone. This is now coming to an end (with no less than Verizon itself making the announcement). That's a big deal in terms of public perception.

Since there's no way any of the so-called advantages of Android touted by Android fans (openness, customization, etc) have played any significant part of Androids growth, it's likely most Android customers purchased Android phones because they wanted something iPhone-like but did not want to switch carriers. It is, after all, a copy of the iPhone, so we can assume anyone purchasing an Android phone was a potential iPhone customer. Now the only thing separating the iPhone and Android phones is cost.

I also find it unlikely that Motorola, HTC, et al, have significant brand name recognition or customer loyalty. Android has been primarily associated with Verizon itself through it's Droid campaign in the US and that's now also coming to an end. No doubt a great many Android purchases were stopgap measures by people who are waiting for the iPhone on Verizon. If it's not too difficult for them to switch, I think many of them will do so.

Superb post, and wanted to repeat it!

We will definitely now know for sure, and my money's on the iPhone too.

It'll be nice to hear from the fandroids in a few months' time!
post #19 of 71
Quote:
Originally Posted by anantksundaram View Post

Superb post, and wanted to repeat it!

We will definitely now know for sure, and my money's on the iPhone too.

It'll be nice to hear from the fandroids in a few months' time!

Itll be interesting on many levels. I also want to see what this does to the Android options on both AT&T and Verizon. Ive heard that AT&T has crappy Android-based phones which is why the iPhone is so popular on AT&T. But why do they have such poor choices? Will they get better handsets now? Will Verizon stop focusing on the Droid and push the iPhone? Will Verizon not care about new Android phones for their network once they get the iPhone?
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post #20 of 71
The really big hit to Android will come when V stops the BOGO program for their phones. I have heard that it was funded by the carriers and not by the manufacturers. If this is so, they no longer have any motivation to keep it up. Android could possibly see a 50% drop in sales (given "leavers" and no more bogos) Unless, of course, ATT picks up the program.

I wonder if V will BOGO the iPhone? Wouldn't that be something!
post #21 of 71
Quote:
Originally Posted by jmmx View Post

I wonder if V will BOGO the iPhone? Wouldn't that be something!

They could do it for just 2 weeks to get things rolling.
post #22 of 71
Quote:
Originally Posted by solipsism View Post

I dont think the AT&T fallout will be as big as people think. I do think Verizon will best AT&T in retention and new subscriber numbers this next quarter because of the iPhone. The real movement will be from those that simply couldnt or wouldnt move to AT&T will migrate from the lesser carriers to Verizon.

I can only speak to the DC area, but here, Verizon's rep is so good (caused in large part I think by years of underground subway exclusivity) that it's just about as easy to find a Verizon user waiting out Apple as it is to find an actual iPhone user even still today.
post #23 of 71
For Verizon, if they want to seriously leech customers from at&t they have to lower their monthly fees, which i don't see them doing anytime soon.
Plus these graphs and some of the comments here are giving the impression that android is losing the smartphone battle, when in fact it is doing incredibly well. Iphone on verizon will definitely help Apple retain and grab some customers, but I disagree that all android customers were iphone customers shunned by exclusivity.
post #24 of 71
Quote:
Originally Posted by Gordian89 View Post

Plus these graphs and some of the comments here are giving the impression that android is losing the smartphone battle, when in fact it is doing incredibly well.

two graphs are comparing vendor unit sales on Verizon and one is comparing vendor units sales on Verizon to the Apple, a single vendor, unit sales on AT&T. These graphs arent disparaging Androids OS installations.
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post #25 of 71
You're high if you think Verizon's service is a leap forward. I'm getting rid of it.
post #26 of 71
Quote:
Originally Posted by mdriftmeyer View Post

You're high if you think Verizon's service is a leap forward. I'm getting rid of it.

In some places it is a leap forward compared to AT&T, in many others it is a big step back. If the plans and pricing is the same as today, well, that is definitely NOT a leap forward unless you like being nickel and dimed every month and then socked with overage charges if you ever screw up. Verizon is also a big leap forward if you like a company that will stalk you for a decade or more trying to get you to pay up for their overage charges, even if they were partially their fault.
post #27 of 71
Quote:
Originally Posted by solipsism View Post

I dont think the AT&T fallout will be as big as people think. I do think Verizon will best AT&T in retention and new subscriber numbers this next quarter because of the iPhone. The real movement will be from those that simply couldnt or wouldnt move to AT&T will migrate from the lesser carriers to Verizon.

As the article points out (correctly, I think) the main source of new iPhone users will be existing Verizon customers giving up their old "dumb" phones and picking up the iPhone instead of a Droid, not AT&T iPhone users migrating to Verizon or current Verizon Droid phone owners switching to the iPhone. The numbers look a bit on the optimistic side, but not completely unrealistic.
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post #28 of 71
I am happy for folks at Vzw getting the iPhone.
I plan to stay at AT&T myself. Service here is amazing.
Hit 3Mbs down and 1.5Mbs up most of the time as well as 4-5 bars nearly everywhere I go.
I am an Apple fan so more people using Apple products is a plus to me.
post #29 of 71
i've had minimal trouble with att today im getting 2mb down

i just want a better competitive deal reduce my monthly cost forget the cost of the phone, its the monthly cost that is outrageous
straight talk from walmart is $45 unlimited text talk and data, so you have to buy your own phone, but you also save on all those FEES
sprint boost $50 for unlimited everything so why should we be spending more than 55 or 60 for unlimited everything

also i wonder if vz starts getting complaints about iphone overwhelming their network
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post #30 of 71
Quote:
Originally Posted by eyepad View Post

I am happy for folks at Vzw getting the iPhone.
I plan to stay at AT&T myself. Service here is amazing.
Hit 3Mbs down and 1.5Mbs up most of the time as well as 4-5 bars nearly everywhere I go.
I am an Apple fan so more people using Apple products is a plus to me.

Ding ding ding. Same here. I wouldn't say amazing though. More like solid IMHO.
post #31 of 71
Quote:
Originally Posted by Rot'nApple View Post

Whatever makes my shares of Apple stock go up, I'm fine with it.

Verizon's data plans similar to AT&T for now. It will only be until after the two sides have plateaued regarding sales, that is when the fight to have the better plan to attract the table scraps of remaining potential customers by incentivizing with a one-upmanship begins, to the benefit of all of us.

Your tag line is offensive and inapproriate for this forum.
post #32 of 71
Quote:
Originally Posted by Milwaukee, WY View Post

I'll be staying with AT&T. Aside from some connectivity issues last summer, my service with them has been trouble-free. Plus I like the rollover minutes. If there is a large exodus from the carrier to VZ, that might not be a bad thing as far as giving the network some breathing room. I won't be among them though.

Verizon may get a lot of AT&T like dings if they add millions of iPhone users with unlimited data plans. I look forward to the comeptition but am not rushing to ditch AT&T.
post #33 of 71
Quote:
Originally Posted by shadash View Post

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.

so you should see huge iphone sales numbers the first month or two since they need a new iPhone

what about a new iphone for both att and vz,
or upgraded iphone 4 for att at same time
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post #34 of 71
Quote:
Originally Posted by pdview View Post

Your tag line is offensive and inapproriate for this forum.

Not sure what side of THAT particular issue RotNApple is even on, but I think it's inappropriate for anyone with one total post, ever, to make that his or her second post. (Edit: First post)
post #35 of 71
Quote:
Originally Posted by Rot'nApple View Post

Whatever makes my shares of Apple stock go up, I'm fine with it.

Verizon's data plans similar to AT&T for now. It will only be until after the two sides have plateaued regarding sales, that is when the fight to have the better plan to attract the table scraps of remaining potential customers by incentivizing with a one-upmanship begins, to the benefit of all of us.

I am hoping we see 375 by Easter ... here's hoping
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post #36 of 71
Quote:
Originally Posted by Milwaukee, WY View Post

I'll be staying with AT&T. Aside from some connectivity issues last summer, my service with them has been trouble-free. Plus I like the rollover minutes. If there is a large exodus from the carrier to VZ, that might not be a bad thing as far as giving the network some breathing room. I won't be among them though.

I had Verizon before. Their customer service was terrible. I felt ripped-off very often. I like AT&T's customer service. They are quick to give you credit for charges that you feel are unwarranted. I like the roll-over minutes too. You don't have to worry about overages. And, the $15 limited data plan is perfect for the 2 iPhones we have on the Family Plan. I have not had much of a problem with connectivity either.
post #37 of 71
Quote:
Originally Posted by solipsism View Post

That just seems like poor business. Are they trying to go under?



I don’t think the AT&T fallout will be as big as people think. I do think Verizon will best AT&T in retention and new subscriber numbers this next quarter because of the iPhone. The real movement will be from those that simply couldn’t or wouldn’t move to AT&T will migrate from the lesser carriers to Verizon.

Not wishing to sound like I am repeating myself but the losses from AT&T could be significant if all the FiOS users are offered a special bundle deal. I am not convinced I will change but I will take a look.
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post #38 of 71
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Originally Posted by digitalclips View Post

I am hoping we see 375 by Easter ... here's hoping

Easter? How about by the Verizon iPhone launch day?
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post #39 of 71
Quote:
Originally Posted by solipsism View Post

Easter? How about by the Verizon iPhone launch day?

Ok you can twist my arm OMG maybe I should buy more tomorrow.
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post #40 of 71
Quote:
Originally Posted by shadash View Post

You should read the boards more. I have seen estimates of up to 6 million subscribers that Verizon would take from AT&T. We'll see if it will be that high, but that is about a 3rd of AT&T's current iPhone user base. That will hurt.

PS - AT&T sucks in more places than NY and San Fran. Try Phoenix.

I live in Phoenix, too, and yes AT&T sucks here. But, I won't be switching. Especially if I can't do data and voice transmission at the same time. I think people use both simultaneously more than they realize.
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