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AT&T denies accusations that it pushed its retail outlets to sell iPhones alternatives

post #1 of 63
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AT&T's sales managers have reportedly been pushing the company's retail store managers to steer iPhone buyers to alternative smartphones running Android or Windows Phone, although the company has denied doing so.

According to a report by BGR, AT&T has routinely "been instructing store managers to pump the brakes on Apple?s iPhone," specifically "handing down instructions that state that customers seeking smartphones at AT&T retail stores should be steered away from Apple?s (AAPL) iPhone and towards Android phones or Windows Phone handsets like the Nokia Lumia 900 instead."

The site says it "confirmed the directive with three independent sources." While BGR has a mixed track record in many areas pertaining to Apple (particularly in regard to rumors of future products), it has historically served as a reliable source for news related to carriers and phone retailers.

AT&T responded to the report to deny the accusations, stating that "the idea that we would steer any customer away from a particular device couldn?t be more farfetched."

The company added, "our reps do what it takes to align customer needs with the best device for them. iPhone remains one of our most popular devices, which doesn?t happen by steering people away from it. Our reps are encouraged to try all devices so they are more knowledgeable on our industry-leading smartphone lineup."

At the same time, AT&T began publicly promoting modern Android devices after it lost its exclusive relationship to carry Apple's iPhone in the US last year, and this spring, the company announced a partnership with Nokia to promote its new Windows Phone 7 Lumia, a deal that reportedly cost the carrier $150 million and was supposedly going to result in a larger launch than the iPhone. Instead, AT&T's Lumia lackluster launch lethargically limped.

Apple's iPhone currently accounts for 72 percent of the new smartphones activated by AT&T, but BGR noted that internal sales figures from AT&T retail sources pointed to a decline among the carrier's own outlets from a high of 80 percent down to sales "between 50% and 60% since regional managers instructed stores to actively push other smartphones in place of the iPhone."

Apple's own retail and online stores sell a large number of phones activated by AT&T, and a wide variety of other retailers also sell iPhones on AT&T's network in the US. The loyalty of iPhone buyers (and their lack of "churn" in running to other carriers after their contract runs up) has made them attractive subscribers for carriers.

At the same time however, the higher subsidies negotiated by Apple means that the iPhone is a little more expensive for carriers up front, making it in the carriers' interest to promote cheaper, simpler phones tied to the same kinds of plans.

Carriers concerned about "wild popularity of iPhone"

AT&T's insistence that it would be "farfetched" for the carrier to "steer people away from" the iPhone also conflicts with reports from Blackberry maker RIM that aired this summer, as highlighted by the Wall Street Journal, which stated that in 2010, AT&T, "then Apple's exclusive carrier partner, approached RIM about a plan to develop a touch-screen rival to the iPhone," citing two former RIM executives as the source of the report.

"The chief of AT&T's mobile division visited RIM's research and development team in Waterloo to stress how important it was for AT&T to have a successful BlackBerry product to sell, according to people familiar with the visit," the Wall Street Journal stated, a message that resulted in the BlackBerry Torch project that put the device's physical keypad on a slider and made its touchscreen more prominent in an attempt to better compete with Apple's iPhone.

According to the report, both AT&T and Verizon scrambled in 2010 to develop products with RIM, specifically to "prevent Apple from gaining "outsize influence in the market." Both carriers have since moved on to promoting Android (particularly 4G LTE models) and then Windows Mobile devices, neither of which has prevented the iPhone from accounting for the largest segment of the carriers' smartphone activations.

More than a decade ago, Apple faced similar issues in selling its Macintosh computers through independent retailers, most of whom preferred to sell no-name or store branded PCs and keep a larger share of the profits. That reality induced Apple to launch its own retail stores twelve years ago, a move that paved the way for Apple to launch new iPods, iPhones, and the iPad with sharp marketing focus, generating long lines of excited buyers who were offered no competitive distractions once in Apple's stores.
post #2 of 63
Oh, the carriers love branding everything they sell with their logos and shovelware. It has to burn them Apple sells iPhones free of any carrier logos and shovelware. Or locked into the carrier's networks and app stores. They can still do that with their Android phones though.

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post #3 of 63

You know AT&T.. I would believe you if I didn't see this happening a while back when I was waiting at your store. This is basically what I have seen and heard happening right next to me:

 

Girl: "I want to buy a new phone. What about the iPhone?"

AT&T rep: "Everyone uses an iPhone. What you need is Android. It is more customizable"

 

Then he starts showing her Android phones.

post #4 of 63

Whether managers are doing it officially or not, it’s happening: carrier stores are pushing the Android phones they can lock down. “Open” means “ways we can have power over users” and they like that. Adware instead of updates! Etc.

post #5 of 63
Quote:
Originally Posted by NasserAE View Post

You know AT&T.. I would believe you if I didn't see this happening a while back when I was waiting at your store. This is basically what I have seen and heard happening right next to me:

 

Girl: "I want to buy a new phone. What about the iPhone?"

AT&T rep: "Everyone uses an iPhone. What you need is Android. It is more customizable"

 

Then he starts showing her Android phones.

 

That's a serious problem. So if I went in *asking for* an iPhone (because *I* know what *I* want) they'll probably try to sell me something else, and maybe come on strong about it?

 

If this is true it really needs to be addressed. And quickly. 

post #6 of 63
The iPhone represents 73% of AT&T's smartphone sales.

It doesn't seem like they did a very good job of steering people away from the iPhone...
post #7 of 63

" Lumia lackluster launch lethargically limped"

 

+1 for the alliteration.

post #8 of 63
Quote:
Originally Posted by Michael Scrip View Post

The iPhone represents 73% of AT&T's smartphone sales.
It doesn't seem like they did a very good job of steering people away from the iPhone...

The iPhone accounted for 73% of all the smartphones AT&T sold... despite AT&T's best efforts.

That's more like it.
post #9 of 63

AT&T's denial sure sounds like a classic "non-denial denial" to me.  

 

They deny telling employees to use different phones but then emphasise how they would like them to use different phones.  They say they don't purposely steer customers to other phone types, but then talk about how they want the customer to know their choices and make an informed decision.  

post #10 of 63
Quote:
Originally Posted by Quadra 610 View Post

 

That's a serious problem. So if I went in *asking for* an iPhone (because *I* know what *I* want) they'll probably try to sell me something else, and maybe come on strong about it?

 

If this is true it really needs to be addressed. And quickly. 

 

The Android phone manufacturers must be giving bigger kickbacks to AT&T.

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post #11 of 63

They deny the accusations? Of course they do.

 

The fact is, their reps have been known try to steer customers to Windows phones and Android. I've personally seen it as have many others. I seem to recall reading that Microsoft was offering a bounty to the sales rep for every Nokia Lumia 900 sold? That may have only been for the initial launch though. Truthfully, I can hardly fault the sales reps here, they are only trying to make a living. The sales reps have always told me that they've never needed to push the iPhone because it sells itself.

post #12 of 63
Quote:
Originally Posted by SpamSandwich View Post

 

The Android phone manufacturers must be giving bigger kickbacks to AT&T.

 

Carriers pay more for iPhones than Androids for the same 24 months contract. This is why they want people to buy other smartphones (Android, Nokia.. etc).

post #13 of 63

I sure wouldn't doubt that employees would be pimping Android smartphones for a commission.  There's always that lure of extra money where salespeople would push any uninformed buyer to a product they're getting paid to endorse.

 

Customer:  Could you show me an iPhone.  I hear they're the best.

Salesperson:  Nonsense.  We have some Android smartphones that blow the doors off of anything Apple makes.  Just look at the size of this smartphone.  You're getting a lot more for your money.  You can read the display from across the room.

 

Of course, Apple is going to get shafted the same way they did back when they had to compete against desktop PCs and the salespeople were getting commissions for selling Windows PCs.  Apple did the right thing when it went into the brick and mortar business to sell its own products without interference from unscrupulous salespeople.  When I say unscrupulous, I mean when a customer asks for a particular product and the salesperson tries to sell them some other product for the sake of making extra money.  I personally think that practice should be stopped, but it won't because that is what is known as sales incentive which is also good for the store.  Move products regardless of quality.  A good product sells itself?  Not if a determined salesperson has anything to say about it.

post #14 of 63

Logical move on AT&T's part, since Android and Windows phones cost them a few hundred bucks less and they get the same monthly fees from subscribers.  I'm sure Verizon does the same thing.  What I don't understand is why Apple doesn't put a stop to this.  A few "secret shoppers" with recordings, and AT&T would have to come clean.  The "denial" part of this is what irks me the most.  Joe Schmoe goes into the AT&T store, thinking he is going to get impartial advice, not knowing the store rep's recommendations are incentivized and gets steered to something he may not want.  

post #15 of 63
Quote:
Originally Posted by Constable Odo View Post

 

Of course, Apple is going to get shafted the same way they did back when they had to compete against desktop PCs and the salespeople were getting commissions for selling Windows PCs.  Apple did the right thing when it went into the brick and mortar business to sell its own products without interference from unscrupulous salespeople.  When I say unscrupulous, I mean when a customer asks for a particular product and the salesperson tries to sell them some other product for the sake of making extra money.  I personally think that practice should be stopped, but it won't because that is what is known as sales incentive which is also good for the store.  Move products regardless of quality.  A good product sells itself?  Not if a determined salesperson has anything to say about it.

 

 

If you are saying that each player acts in its own self-interest, then few would disagree.

 

If you are saying that doing so is somehow bad, more people might disagree.

post #16 of 63
Quote:
Originally Posted by Quadra 610 View Post

 

That's a serious problem. So if I went in *asking for* an iPhone (because *I* know what *I* want) they'll probably try to sell me something else, and maybe come on strong about it?

 

If this is true it really needs to be addressed. And quickly. 

I remember this happening with Macs at PC world in the UK. I am not sure if they still sell Macs but going in there was just depressing.

 

I wonder if this might have to do with individual sales reps, too. They live and breathe cell phones and they must get bored with the same old same old. "You want an iPhone? Yawn. How about an Android?"

post #17 of 63

I've seen frequent comments that carrier salespeople are getting bigger commissions when steering buyers to Android or Windows phones. Do they? Has anyone ever posted any supposed "commission sheets" or anything along those lines as evidence? Maybe they do, but it sure would be nice to get something showing it's true instead of dozens of posts from forum members who claim that's what happens without any citations. I'm not saying it's true or not, as I've not seen anything to prove or disprove it.

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post #18 of 63

It's very common for sales people in the stores and telesales to get better incentives to sell what the manufacturers want you to sell.

 

For example, they get commissions sheets that pay more for Windows/Android than Apple. There are also additional spiffs like extra $ for a certain number of Android/Windows phones, free trips, etc.  I consulted with Rogers Wireless telesales and they make more $ selling non-Apple or if they have too much of a product, there would be a promotion for the reps to push that product to customers. 

 

I hear it all the time when the customers would say, "No, I want an iPhone 4S..."  Rep: But this HTC is quad core, HD, dropbox, makes coffee, etc...  Customer: "No, I want an iphone 4s - are you going to sell me the iPhone or not?".

post #19 of 63
Quote:
Originally Posted by Gatorguy View Post

I've seen frequent comments that carrier salespeople are getting bigger commissions when steering buyers to Android or Windows phones. Do they? Has anyone ever posted any supposed "commission sheets" or anything along those lines as evidence? Maybe they do, but it sure would be nice to get something showing it's true instead of dozens of posts from forum members who claim that's what happens without any citations. I'm not saying it's true or not, as I've not seen anything to prove or disprove it.

I've worked as a retail clerk selling cell phones, yes brands like Samsung and HTC give bigger commissions.  Brands like Sony and Apple do not, why do you ask?  Dont hurt your brain to much figuring it out.  Because Sony and Apple usually have a flat price, its the same price every where.  Its simple chimpo "google" it bud. 

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post #20 of 63
Quote:
Originally Posted by Gatorguy View Post

I've seen frequent comments that carrier salespeople are getting bigger commissions when steering buyers to Android or Windows phones. Do they? Has anyone ever posted any supposed "commission sheets" or anything along those lines as evidence? Maybe they do, but it sure would be nice to get something showing it's true instead of dozens of posts from forum members who claim that's what happens without any citations. I'm not saying it's true or not, as I've not seen anything to prove or disprove it.

Yeah... I'd like to hear that too from anyone who works in carrier stores.

And also... how much is this commission?

It seems like the money the carriers save by pushing Android phones would go right into the pocket of the salesperson... thus negating any savings at all.

What about service and support? Do Android owners visit the store more often with questions about their phone? That kind of stuff would add up over time.

Sure... the carriers get extra money in the beginning by selling a phone with a cheaper subsidy... but that all goes away if they have to deal with a bunch of headaches over the next 2 years.
post #21 of 63

Won't be a problem when Apple introduces their software-defined radio signal iPhone in a few months. :D  It'll be the end of the carriers.

 

http://arstechnica.com/tech-policy/2012/07/how-software-defined-radio-could-revolutionize-wireless/

 

Obviously, I kid. However, this is a disruptive tech that is quickly rising.


Edited by SpamSandwich - 8/1/12 at 3:10pm

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post #22 of 63
Quote:
Originally Posted by Mrbigrobot View Post

It's very common for sales people in the stores and telesales to get better incentives to sell what the manufacturers want you to sell.

 

For example, they get commissions sheets that pay more for Windows/Android than Apple. There are also additional spiffs like extra $ for a certain number of Android/Windows phones, free trips, etc.  I consulted with Rogers Wireless telesales and they make more $ selling non-Apple or if they have too much of a product, there would be a promotion for the reps to push that product to customers. 

 

I hear it all the time when the customers would say, "No, I want an iPhone 4S..."  Rep: But this HTC is quad core, HD, dropbox, makes coffee, etc...  Customer: "No, I want an iphone 4s - are you going to sell me the iPhone or not?".

I've no doubt that a lot of people say it's so. Surely someone must have a link to some fairly recent page somewhere that has the commission schedules or copy of a carrier memo or something better than they heard it from somewhere or "that's the way it was when I sold phones back in the day".

 

Further than that, does Best Buy or Radio Shack make more from Verizon or Sprint or whatever carrier they push you to if the customer gets a phone other than an iPhone, or is the commission to the company the same no matter what smartphone the customer contracts with, dependent on the contract services themselves? I truly would like to know what the facts are and I'm confident someone here has them. We have a wide range of members.

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post #23 of 63
2 can play that game. Apple should "steer customers away" from AT&T when selling the iPhone through their own stores.
post #24 of 63

Trust me there is no directive that comes out and tells store manager or employee not to sell the Iphone, However, what you need to look at are the incentive plans for selling phones, what phone gets the SA more money in his pay check each week. Employee are rewarded for moving phones and depending how many they are sitting in the back room will dictate what phones are being pushed on any given day. Not sure if Apple forces AT&T to take so many phones each month. However, Samsung, Motorola, HTC and other push carriers to take lots of phones each months. Of course they are going to make sure those move.

 

The only problem AT&T and VZ has is apple sell more phones themselves which still get activated on their networks, Apple does not really need them pushing phones.

 

Personally I have seen AT&T and VZ store push one phone over another for many years, every time I took my dad in to buy a phone they kept trying to convince him to buy something he did not need. This tactic is not new.

post #25 of 63

I guess I'm left wondering why AT&T should care about it?  If they want to push a certain platform, it's not like Apple can do anything about it right?  Apple's not going to ban AT&T from selling iPhone right?  I'm curious what the ramifications (if any) would be.

post #26 of 63
Originally Posted by sflocal View Post
If they want to push a certain platform, it's not like Apple can do anything about it right?  Apple's not going to ban AT&T from selling iPhone right?

 

That's exactly what they could do.

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post #27 of 63
Quote:
Originally Posted by sflocal View Post

I guess I'm left wondering why AT&T should care about it?  If they want to push a certain platform, it's not like Apple can do anything about it right?  Apple's not going to ban AT&T from selling iPhone right?  I'm curious what the ramifications (if any) would be.

Could Apple? Sure. Would they? Probably not.

But if I was AT&T... I'd be careful.

Nearly 3 out of 4 smartphones sold by AT&T are iPhones.

AT&T would be devastated if something happened and they couldn't sell the iPhone anymore...

But again... I doubt Apple would pull their phones from AT&T.
post #28 of 63
"our reps do what it takes to align customer needs with the best device for them*"
* where "them" means the reps, not the customers
post #29 of 63

Two good friends of mine went into an AT&T store to buy iPhones (and to dump the Android phones they didn't like) and were absolutely badgered by the salesperson to consider the "totally awesome" Android phones.  He went so far as to tell them he wasn't sure the iPhone was going to last on the market.  At this point, my friends tell me they laughed out loud and said "just get us 2 iPhones."

 

So, yes, AT&T has been pushing Android at the expense of the iPhone.

post #30 of 63

Screw you, AT&T.  I'm going to Verizon when the Iphone 5 comes out.

post #31 of 63
Quote:
Originally Posted by Eriamjh View Post

Screw you, AT&T.  I'm going to Verizon when the Iphone 5 comes out.

Why bother? Just switch to Straight Talk when your AT&T contract runs out. You can even use the same iPhone you're already using. I switched and I'm very happy with the savings. And since it's the AT&T network, I don't see any difference in performance.
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post #32 of 63
Originally Posted by jragosta View Post
Why bother? Just switch to Straight Talk when your AT&T contract runs out. You can even use the same iPhone you're already using. I switched and I'm very happy with the savings. And since it's the AT&T network, I don't see any difference in performance.

 

I've heard there's the possibility that they'll just up and give away your number without warning.

 

I can't have that happen. Has anyone else heard this?

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post #33 of 63

Sad to say, I've witnessed this on several occasions while visiting my local ATT store. The last time, when I overheard a customer ask about the iPhone, the sales rep stated he used to have an iPhone, but this (Andriod Option) is "The best phone in the store."  Sounded like a sales pitch to me! I knew there was an agenda.

post #34 of 63
Quote:
Originally Posted by Michael Scrip View Post

The iPhone represents 73% of AT&T's smartphone sales.
It doesn't seem like they did a very good job of steering people away from the iPhone...

Apparently you refuse to believe this part

 

"internal sales figures from AT&T retail sources pointed to a decline among the carrier's own outlets from a high of 80 percent down to sales "between 50% and 60% since regional managers instructed stores to actively push other smartphones in place of the iPhone."

 

Apparently they did.

post #35 of 63

"in the carriers' interest to promote cheaper, simpler phones tied to the same kinds of plans."

 

My phone, a Samsung Note, is niether "cheaper" nor "simpler"; indeed it costs about the same, and in my opinion is more advanced than an iPhone. AT&T has come out and said they are not pushing people one way or another, yet the conspiracty rages on, even despite the fact that the sales numbers show that it is almost certain that people are not being steered away from iPhones. Ultimately even if a carrier were steering people at a particular phone or service in order to increase profit, I believe it is their right to do so, and some may even argue their responsability since they do happen to be a company that is traded on the stock market. For instance an Apple store does not carry anything but Apple products, almost like they are steering people to buy Apple products at the exclusion of all else in order to increase profits and take care of their share holders; what if a Blackberry were a better fit for someone? I don't suppose an Apple Store employee would guide that person to a Blackberry, indeed there would not even be a Blackberry in the store to sell them.

post #36 of 63
Originally Posted by iComa View Post

For instance an Apple store does not carry anything but Apple products, almost like they are steering people to buy Apple products at the exclusion of all else in order to increase profits and take care of their share holders; what if a Blackberry were a better fit for someone? I don't suppose an Apple Store employee would guide that person to a Blackberry, indeed there would not even be a Blackberry in the store to sell them.

 

I hope you realize the inherent problem with that analogy.

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post #37 of 63

I do hope you grasp the context.

I apologize if I did not construct my analogy to your specific tastes, or if some of my grammar or spelling is not up to par; though I do hope that I do good enough to communicate, and I hope that we can talk abou the article instead of my lacklust writing skills.
 

post #38 of 63
Originally Posted by iComa View Post
I apologize if I did not construct my analogy to your specific tastes, or if some of my grammar or spelling is not up to par; though I do hope that I do good enough to communicate, and I hope that we can talk abou the article instead of my lacklust writing skills.

 

Doesn't have squat to do with any of that. AT&T is supposed to be nondenominational by definition. Apple is not.

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post #39 of 63
Quote:
Originally Posted by AdamC View Post

Apparently you refuse to believe this part

"internal sales figures from AT&T retail sources pointed to a decline among the carrier's own outlets from a high of 80 percent down to sales "between 50% and 60% since regional managers instructed stores to actively push other smartphones in place of the iPhone."

Apparently they did.

Refuse to believe?

Sorry... I got my info from quotes like this around the web last week:

Tuesday, Jul 24, 2012 - AT&T has announced their second quarter results, and this time around the iPhone accounted for 3.7 million or almost 73% of the 5.1 million smartphones sold.

If that's not good enough for ya... here's a link directly to AT&T's recent Q2 results:

http://www.att.com/gen/press-room?pid=23091&cdvn=news&newsarticleid=34898&mapcode=

Here's the important part... for clarity:

AT&T sold 5.1 million smartphones in the second quarter..... In the quarter, the company activated 3.7 million iPhones...

Now... what am I refusing to believe???
post #40 of 63
Quote:
Originally Posted by Tallest Skil View Post

 

Doesn't have squat to do with any of that. AT&T is supposed to be nondenominational by definition. Apple is not.


I was not aware that any mega-corporation would be "non-denominational", indeed I always assume a company will look out for it's best interests; if they did not, I doubt that they would stay in business very long.

 

Indeed, human beings in general will look out for their own best interests; if you have product X, and product Y, and both products perform the same function, albeit they do that function in differing ways, and you could increase your profit margin by selling product X over product Y, and some customers like the way that product Y fulfills the function, are you going to try to sell more of product X while still keeping product Y available for those that prefer it? Or ignore that increased profit potential and just let the chips fall where they may.

 

In any event, AT&T has so far said that they are not giving preferential treatment to anyone in particular, so I don't know what else needs to be said; sounds like the only thing that could make many happy would be for AT&T to sell nothing but iPhones, if that were to happen, I do admit I'd miss my nice big screen with my Smart Pen though.

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