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Apple's Verizon iPhone could mean tough year for AT&T, analysts say

post #1 of 43
Thread Starter 
On the eve of the expected Verizon iPhone launch, Wall Street analysts are chiming in with warnings that AT&T could be in for a rough year, with one analyst predicting that AT&T will "get demolished."

With over 3 years of iPhone exclusivity in the U.S., AT&T has enjoyed a steady stream of new subscribers, but the announcement of a Verizon-compatible CDMA iPhone at Tuesday's Verizon event could disrupt AT&T's growth streak.

"I think AT&T is going to get demolished," Reuters reports Gleacher & Co analyst Brian Marshall as saying. Earlier comments from Marshall suggest that Verizon could see 5 percent of its existing customers upgrade to the iPhone in the initial launch quarter, a pace faster than that of the original iPhone launch on AT&T in 2007.

According to the Reuters report, many analysts see AT&T losing contract customers this quarter, which would be a first since AT&T was formed through the merger of AT&T Wireless and Cingular Wireless in 2004.

Some analysts' reports predict 2011 subscriber losses of over 3 million customers for AT&T. Todd Rethemeier, an analyst with Hudson Square, is on the "pessimistic end" of that scale.

"There's been 3 years where Verizon's customer base has had iPhone envy. They're going to want to get it as soon as they can," said Rethemeier, who believes AT&T will lose 3.5 million high-value contract customers in 2011.

Steve Clement of Pacific Crest expects AT&T to lose customers in the first half of the year, eventually ending the year with no net gains in subscribers.

Barclays analyst James Ratcliffe, considered one of the more optimistic of analysts covering AT&T, sees the carrier going through a tough 2011, but still expects AT&T to add 1.4 million contract customers this year. According to Ratcliffe, about 15 million new AT&T iPhone customers from 2010 are unable to leave for Verizon Wireless without "great expense" from early termination fees on AT&T's contracts.

An AT&T spokesman downplayed analysts' concerns, noting that the carrier added 5.2 million iPhone customers in the third quarter in spite of rumors of an upcoming Verizon iPhone.

AT&T stock dropped 1.8 percent on Monday, closing at $28.34. Meanwhile, investors were bullish on Apple, with shares of Apple stock closing up nearly 2 percent at an all-time high of $342.46.

Verizon has long held the No. 1 spot in the U.S., though AT&T's strong growth, largely due to iPhone exclusivity, has brought it within striking distance. As of the end of September, Verizon had 93.2 million subscribers, while AT&T had 92.8 million.

Earlier Monday, Piper Jaffray analyst Gene Munster predicted that Verizon could cannibalize as many as 6.5 million iPhone sales from AT&T.

However, third place Sprint and fourth place T-Mobile could stand to lose the most, analysts say. Shaw Wu of Kaufman Bros. believes Verizon may have paid extra to keep the iPhone between AT&T and itself in the U.S. "Because of this, we believe the iPhone isn't likely to appear on T-Mobile USA and/or Sprint until later," Wu said in a note to investors Monday.

Ahead of the Verizon iPhone launch, AT&T and Verizon are touting their respective network speeds. On Monday, AT&T spokesman Larry Solomon said iPhone users on Verizon should be "ready for life in the slow lane." A third-party study in November found that AT&T had wireless speeds as much as 60 percent faster than its competitors.

A subsequent Wall Street Journal report claimed that Verizon remained confident in its network, citing sources familiar with the matter.

Verizon will reportedly offer unlimited data plans for the iPhone on Tuesday. AT&T ceased offering unlimited data plans to new subscribers last year, prior to the release of the iPhone 4.
post #2 of 43
AT&T will be interesting to watch. If Apple has that much affect on companies this size it is truly staggering. I say that from the point of view of having been with Apple when it nearly died. I still have problems taking it all in!
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post #3 of 43
Quote:
Originally Posted by AppleInsider View Post


"I think AT&T is going to get demolished," Reuters reports Gleacher & Co analyst Brian Marshall as saying.

What is Marshall's track record?
post #4 of 43
Yeah, they can be sure about their network - steady slow, equally for everyone. There is no network capable handling over 5 million data hungry devices without any strain issues. Verizon's network was not used much because it was pain to work on those phones they had. I have tried several of them and just to scroll down the website took me a minute - that's why their network had no problems.
Marquiz d' Gabber von Gabberaarde

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... 6x slower!
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Marquiz d' Gabber von Gabberaarde

... and Windows Vista...
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... 6x slower!
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post #5 of 43
This is the bit of news, that I will be most interested, in finding out.

I always peruse data-heavy applications, on my long calls.
NOT having this supported on the Verizon Network would be a huge deal breaker.

Not only for me but for MANY of the AT&T converts.

For those that never had it, ie. Verizon's current customer base, ignorance is bliss.
post #6 of 43
I'm sure AT&T has it's problems, but I've been with the company for years before the iPhone and since the first version of the iPhone and have been very satisfied. Seems like it's just the hot topic to complain about AT&T. That said I'm hoping the introduction of the iPhone on Verizon will bring competition in service and more so, pricing. I think its a win win situation for the customer.
post #7 of 43
Yes, if this rumor is true, it is going to hurt ATT. No two ways about it. Will it gut them and leave them for dead? Absolutely not. I work for VZW and do not want to see any of the competitors go belly up. Competition is good for everyone. Look what the iPhone did for the smart phone market. If not for them, we would still be using Treo's or a device running WinMo 6.7.
post #8 of 43
Quote:
Originally Posted by harmsway View Post

I'm sure AT&T has it's problems, but I've been with the company for years before the iPhone and since the first version of the iPhone and have been very satisfied. Seems like it's just the hot topic to complain about AT&T. That said I'm hoping the introduction of the iPhone on Verizon will bring competition in service and more so, pricing. I think its a win win situation for the customer.

I do not expect to see lower pricing for service plans until the iPhone appears on Sprint or T-Mobile.
post #9 of 43
Quote:
Originally Posted by TwiztdWun View Post

Yes, if this rumor is true, it is going to hurt ATT. No two ways about it. Will it gut them and leave them for dead? Absolutely not. I work for VZW and do not want to see any of the competitors go belly up. Competition is good for everyone. Look what the iPhone did for the smart phone market. If not for them, we would still be using Treo's or a device running WinMo 6.7.

Definitely a net positive for Verizon, Apple and consumers. A net negative for ATT, Sprint and T-Mobile.
post #10 of 43
Doesn't take the brains of analysts to figure that out.
post #11 of 43
Quote:
Originally Posted by darthraige View Post

Doesn't take the brains of analysts to figure that out.

True. It is interesting to try to determine who is most adversely affected. solopsism and a number of analysts seem to think Sprint and T-Mobile; I think ATT even though I am not sure the carnage will be as great as projected.
post #12 of 43
Have we heard what time tomorrow the announcement is and do we know if there is any live video stream??
post #13 of 43
Quote:
Originally Posted by bcahill009 View Post

Have we heard what time tomorrow the announcement is and do we know if there is any live video stream??

11am Eastern. No stream that I am aware of.
post #14 of 43
...I'm betting on 11:11 AM



Quote:
Originally Posted by bcahill009 View Post

Have we heard what time tomorrow the announcement is and do we know if there is any live video stream??
A is A
Reply
A is A
Reply
post #15 of 43
Here we go... AT&T is doomed....
post #16 of 43
Time to buy T-Mobile stock when it hits the crapper! So I can make it up when the iPhone launches 3 years later on T-Mobile USA
post #17 of 43
Quote:
Originally Posted by bcahill009 View Post

Have we heard what time tomorrow the announcement is and do we know if there is any live video stream??

Best coverage you'll get. From Twitter...

@leolaporte Leo Laporte
We're live at 11a Pacific/8a Eastern/1900 UTC with Verizon iPhone coverage Tuesday. Verizon isn't streaming but Andy @Ihnatko will be there.

http://live.twit.tv/
post #18 of 43
Quote:
Originally Posted by speedxdesign View Post

Best coverage you'll get. From Twitter...

@leolaporte Leo Laporte
We're live at 11a Pacific/8a Eastern/1900 UTC with Verizon iPhone coverage Tuesday. Verizon isn't streaming but Andy @Ihnatko will be there.

http://live.twit.tv/

Those times are reversed.
post #19 of 43
Quote:
Originally Posted by penchanted View Post

True. It is interesting to try to determine who is most adversely affected. solipsism and a number of analysts seem to think Sprint and T-Mobile; I think ATT even though I am not sure the carnage will be as great as projected.

This is my reasoning. People that wanted the iPhone and were willing to deal with AT&T already have it. They had 30 days to return it with no restocking fee and a voiding of their contract if they disn’t like it or AT&T simply didn’t work for them.

That means that most AT&T subscribers are probably okay with the network, and since most iPhone users are likely iPhone 4 users that are only about 7 months into a 24 month contract (Don’t forget the free pass AT&T gave to 3GS owners to get the iPhone 4) That means they really have to dislike AT&T right now to pay $255 ($325 ETF minus $10/month) just to get to Verizon for the iPhone 4 that will have its own carrier downsides.

That tells me that it’ll be Verizon’s customers who make the biggest jump and shunning smartphones from other vendors, and Sprint and T-Mobile users making the next biggest jump to go to Verizon for the iPhone.

Will there be a few that jump from AT&T? Of course, but not in the droves some suggest. When the iPhone 5 CDMA comes out there will even be more that jump from AT&T, but there will still be more from the other carriers. Now, as the end of these iPhone contracts rise we’ll likely see even more but that is some time away and we have yet to see how Verizon’s network will be for the iPhone and if the other carriers will get the device by then.



PS:"Four years and two days ago Steve Jobs announced the iPhone. He said it was an iPod, a Phone, and an Internet Communicator. Today, I’d like to announce that it’s iPod, a Phone that works, and an Internet Communicator."
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post #20 of 43
Quote:
Originally Posted by gabberattack View Post

Yeah, they can be sure about their network - steady slow, equally for everyone. There is no network capable handling over 5 million data hungry devices without any strain issues. Verizon's network was not used much because it was pain to work on those phones they had. I have tried several of them and just to scroll down the website took me a minute - that's why their network had no problems.

The data speed depends on most handsets on the processor. Verizon has much more then 5 million hungry data users....what they have is called BACKHAUL and sorry they really are much larger then at&t. I remember when a friend from apple used to make fun of that they spent so much money on owning the network....No one doubts that so much now. I'll consider an iphone once it's 4g...(if the rumor is true the SUMMER) but you sir haven't kept up on android.
post #21 of 43
Quote:
Originally Posted by solipsism View Post

That means that most AT&T subscribers are probably okay with the network, and since most iPhone users are likely iPhone 4 users that are only about 7 months into a 24 month contract (Dont forget the free pass AT&T gave to 3GS owners to get the iPhone 4) That means they really have to dislike AT&T right now to pay $255 ($325 ETF minus $10/month) just to get to Verizon for the iPhone 4 that will have its own carrier downsides.

Yeah, I understand your reasoning but I've seen so many posts and even know a few people who deliberately held back from upgrading in the hopes of the Verizon iPhone. We are in agreement that ATT is likely to suffer less than some are predicting.
post #22 of 43
Tough year for AT&T? Don't they mean a tough year for Android?
post #23 of 43
Quote:
Originally Posted by theobold View Post

The data speed depends on most handsets on the processor.... sorry they really are much larger then at&t.

Data speed does not depend on the processor of the phone. Just like it doesn't on the computer.
It's only visual at that point.

How is VZW larger than AT&T? subscriber base? network base? Because that BS most 3G coverage in the US is misleading marketing when VZW 3G is comparable to AT&T's EDGE, which blankets the US.

3G is not a standard among carriers. It's the 3rd generation of that carriers data network.

But I say bring it on! I can't wait to see VZW network handle the iPhone. It will be very entertaining.
post #24 of 43
Quote:
Originally Posted by darthraige View Post

Doesn't take the brains of analysts to figure that out.

I don't think that's necessarily true. ATT will have people who want the new Iphone 5 or whatever and they will upgrade. I don't see that many people going over to Verizon's dated CDMA network. Now if it's LTE compatible...all bets are off... Right now I'm just going to wait and see what happens tomorrow. Maybe the analyst knows something I don't.
post #25 of 43
Quote:
Originally Posted by mgl323 View Post

Tough year for AT&T? Don't they mean a tough year for Android?

LOL! That may be true also....
post #26 of 43
there will be mass defection from AT&T, here in NYC and San Francisco the service is awful
I can have my call dropped 3 times in a 15 minute conversation.
My sister in Dallas also suffers from terrible service. We have been patiently waiting to leave AT&T. I am sure the sevice is perfectly fine else where in the US. But in some big key markets at&t will not need as many retail stores.
That survey that rated AT&T as the worst of the 4 major carriers points to many other people who are ready to take flight as well
...good by AT&T
post #27 of 43
The only reason I'm on AT&T right now is because of the iPhone -- all of my family and friends are on Verizon. I will gladly switch over to Verizon if selling my iPhone 4 and my wife's iPhone 3GS cover our ETFs. My service has been spotty at best even at home with Microcell.
post #28 of 43
Well, I'm going to hang on to my iPhone on AT&T and enjoy the increased bandwidth when everybody else jumps ship, overloads Verizon, and starts bellowing about poor Verizon performance for the next two years till they can come back. Then we start all over again!

Jim
post #29 of 43
Quote:
Originally Posted by heyjp View Post

Well, I'm going to hang on to my iPhone on AT&T and enjoy the increased bandwidth when everybody else jumps ship, overloads Verizon, and starts bellowing about poor Verizon performance for the next two years till they can come back. Then we start all over again!

Naw, then they will try Sprint or T-Mobile.
post #30 of 43
Quote:
Originally Posted by AdonisSMU View Post

I don't think that's necessarily true. ATT will have people who want the new Iphone 5 or whatever and they will upgrade. I don't see that many people going over to Verizon's dated CDMA network. Now if it's LTE compatible...all bets are off... Right now I'm just going to wait and see what happens tomorrow. Maybe the analyst knows something I don't.

I believe VZW has openly stated that the LTE network in its current state is strictly for data, while voice calls will continue to be handled over the CDMA network, which is also the fall-back for non-LTE areas.

I think the real issue will be BACKHAUL as someone else stated. The carrier with the most backhaul and the highest number of available connections to a tower is going to win the speed race. I don't know about Verizon's backhaul, but their demonstrations of 12mbps over LTE was impressive. On the other hand, that was a demonstration where basically no one was using the network. But I can get 6mbps from AT&T in some areas where HSPA+??? has already been implemented, and that's with iPhone 4 having been out for 6 months already. So I have to wonder what VZW's speeds will look like once millions of customers are on their network and begin to compete for limited backhaul capacity.

I for one hope VZW's network crashes. Not because I'm evil, but because I'm tired of the perception that VZW is invincible and it's time for consumers to get a wake-up call. In fact, I hope VZW's servers crash on launch day the same way that AT&T's did. Just hoping that someone finally shows the chinks in VZW's armor.
post #31 of 43
I will be sticking with AT&T. I've noticed definite improvements in certain areas that I've had coverage problems with in the past that are now problem free. Plus, I love the fact that I can use my phone and browse the web at the same time. This has come in handy on numerous occasions and is a great feature. I also love the fact that I get and keep all rollover minutes I earn, which comes in handy since I no longer have a landline and use my cell phone exclusively.
post #32 of 43
Any last minute guesses on:
  • What day/month it will actually launch?
  • Will they also get the first iPad?
  • Will they get the iPad 2?
  • Will it have simultaneous voice and data?
  • Will it have free Visual Voicemail?
  • Will it have unlimited data for $30?
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post #33 of 43
ATT may be in for a rude awakening. Perhaps not at first as many customers have a contract and are not willing to pay the ETF. However down the road, starting in about 12 months the exit may well begin.
Naturally all this depends on how well Verizon handles its network and of course how much ATT actually improves its network. When I use the word improves with ATT I'm not talking about their promises, increased R&D, etc I'm talking about less dropped calls!!!! and improved speed.Time will tell and after seeing how poorly ATT has handled their service year after year I would have to say ATT is in trouble.
post #34 of 43
Quote:
Originally Posted by mgl323 View Post

Tough year for AT&T? Don't they mean a tough year for Android?

Inlove. With iPhone even while other show free tv and apple wants you to buy but tomanwser you question, NO!!!
http://www.google.com/m/search?oe=UT...rpasses+iPhone
post #35 of 43
Quote:
Originally Posted by mgl323 View Post

Tough year for AT&T? Don't they mean a tough year for Android?

Again, no.
http://www.google.com/m/search?oe=UT...rpasses+iPhone
post #36 of 43
Quote:
Originally Posted by KingKuei View Post

I believe VZW has openly stated that the LTE network in its current state is strictly for data, while voice calls will continue to be handled over the CDMA network, which is also the fall-back for non-LTE areas.

I think the real issue will be BACKHAUL as someone else stated. The carrier with the most backhaul and the highest number of available connections to a tower is going to win the speed race. I don't know about Verizon's backhaul, but their demonstrations of 12mbps over LTE was impressive. On the other hand, that was a demonstration where basically no one was using the network. But I can get 6mbps from AT&T in some areas where HSPA+??? has already been implemented, and that's with iPhone 4 having been out for 6 months already. So I have to wonder what VZW's speeds will look like once millions of customers are on their network and begin to compete for limited backhaul capacity.

I for one hope VZW's network crashes. Not because I'm evil, but because I'm tired of the perception that VZW is invincible and it's time for consumers to get a wake-up call. In fact, I hope VZW's servers crash on launch day the same way that AT&T's did. Just hoping that someone finally shows the chinks in VZW's armor.

Have a look at AT&T's updated Network Information:

http://www.att.com/network/

Click on the Network US Map and read the Mar 31, 2011 update where all the baby blue area coverage for the 3G expansion to be lit by then. That's a lot of 3G area expansion that is hooking into their new backhaul.

Read their Backhaul claims on the left-side of that image view.
post #37 of 43
Quote:
Originally Posted by Tenchi211 View Post

I will be sticking with AT&T. I've noticed definite improvements in certain areas that I've had coverage problems with in the past that are now problem free. Plus, I love the fact that I can use my phone and browse the web at the same time. This has come in handy on numerous occasions and is a great feature. I also love the fact that I get and keep all rollover minutes I earn, which comes in handy since I no longer have a landline and use my cell phone exclusively.

I'm thinking the same thing.
post #38 of 43
Quote:
Originally Posted by mdriftmeyer View Post

Have a look at AT&T's updated Network Information:

http://www.att.com/network/

Click on the Network US Map and read the Mar 31, 2011 update where all the baby blue area coverage for the 3G expansion to be lit by then. That's a lot of 3G area expansion that is hooking into their new backhaul.

Read their Backhaul claims on the left-side of that image view.

How much faith can you put in a company that puts this on its web site: (We all know the real answer is a network able to peak at 100 Mb/s!)

From AT&T Web Site:
Question:
What is 4G?
Answer:
4G means faster mobile broadband speeds where data transfers take less time to complete.
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post #39 of 43
Quote:
Originally Posted by mdriftmeyer View Post

Have a look at AT&T's updated Network Information:

http://www.att.com/network/

Click on the Network US Map and read the Mar 31, 2011 update where all the baby blue area coverage for the 3G expansion to be lit by then. That's a lot of 3G area expansion that is hooking into their new backhaul.

Read their Backhaul claims on the left-side of that image view.

I'm not disagreeing with you. I know AT&T is further along now with the 3G 3.5G pseudo-4G buildout. But AT&T has claimed to have upgraded their cell towers to HSPA+ since last year. It's the backhaul that needs to be beefed up now. The big question is how much backhaul capacity AT&T will have on a per capita (per user) basis vs VZW. And more importantly, in heavily congested areas, it'll still come down to how many connections a tower can serve at a given moment and what that means for overall speed.

For example, I was in Mountain View, CA tonight having dinner and I spotted 3 iPhone 4s plus my own and three 3G/3GSs in the restaurant. LOVE! but on speedtest, I achieved roughly 300kbps down and over 1100kbps up. Very lopsided and very strange. I repeated the test multiple times with roughly the same result. Tried my friends 3GS and had a similar picture except their upload was ridiculously low, like 100kbps.

It's these types of inconsistency and questions about capacity that really matter to me, and I imagine they weigh heavily on people's PERCEPTION of network quality. But even VZW is not perfect. And I must say that when AT&T works, it's awesome! Here's to hoping VZW crashes and burns and shows people how bad the US mobile infrastructure is. Let a little bit of air out of VZW's sail.
post #40 of 43
Quote:
Originally Posted by solipsism View Post

Any last minute guesses on:
  • What day/month it will actually launch?
  • Will they also get the first iPad?
  • Will they get the iPad 2?
  • Will it have simultaneous voice and data?
  • Will it have free Visual Voicemail?
  • Will it have unlimited data for $30?

Sleep issues?

Tuesday
no
yes
has to
yes
no
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Google Motto "You're not the customer. You're the product."
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