Inside Apple's contract with AT&T, GTA headed to iPhone

Posted:
in iPhone edited January 2014
A new report questions whether obtaining the iPhone was a good deal for AT&T; and Grand Theft Auto, one of the most successful video game franchises of all time, is coming to the iPhone this fall.



iPhone as AT&T's "sour apple"



In a look at the exclusive deal between AT&T and Apple for the iPhone in the U.S., The Wall Street Journal asks whether the exclusive contract amounted to a raw deal for the wireless carrier. Author Martin Peers notes that of 10 million iPhone activations since 2007, "only" 40 percent were new customers.



"That means only four million new customers signed up, about 5 percent of AT&T's total, or 6 percent of "postpaid" customers on costly monthly contracts," the report states. "Complicating the math is that some activations represent upgrades from earlier iPhone versions. AT&T said last month that it had about nine million iPhone customers."



Peers goes on to note that AT&T is estimated to spend roughly $400 per sold phone on subsidies, though those reports are unconfirmed. But because that estimated total is much higher than other smartphones, the report suggests that the iPhone has "depressed AT&T profit margins."



AT&T essentially said as much last month, when the company's quarterly earnings fell on the cost of the iPhone subsidy. The successful launch of the iPhone 3GS led to a 15 percent year over year decline for the wireless carrier.



In addition, Peers said, the Web-centric iPhone has placed a strain on AT&T's network. Because the performance has been so poor, he concludes that public perception has been damaged, something that "may be difficult to repair."



"Whatever value AT&T got from the device," he concluded, "it seems clear that Apple was the real beneficiary."



Rockstar to bring GTA, Beaterator to iPhone



Rockstar Games announced Monday that it would port its portable version of Grand Theft Auto: Chinatown Wars from the Nintendo DS to the iPhone. The game is expected to arrive this fall.



“Chinatown Wars is a perfect match for the iPhone and iPod touch. We are very excited to bring this incredibly ambitious version of Liberty City, with this level of detail and immersive gameplay on Apple’s new gaming platforms,” Rockstar President Sam Houser said.



Chinatown Wars is one of the best-reviewed games for Nintendo's mobile device. After lackluster sales following the title's debut, Rockstar also announced its intentions to port the title to the Sony PlayStation Portable.



Rockstar also announced that Beaterator, its rhythm game already announced for the Sony PSP, will also make its way to the iPhone and iPod touch this fall.



"The simple, pick-up-and-play nature of Beaterator lends itself so well to the Apple platforms," Houser said. "We are happy to deliver an application that allows for such unprecedented sharing and ease-of-use."
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Comments

  • Reply 1 of 80
    Quote:
    Originally Posted by AppleInsider View Post




    "That means only four million new customers signed up, about 5 percent of AT&T's total, or 6 percent of "postpaid" customers on costly monthly contracts," the report states. "Complicating the math is that some activations represent upgrades from earlier iPhone versions. AT&T said last month that it had about nine million iPhone customers."



    Peers goes on to note that AT&T is estimated to spend roughly $400 per sold phone on subsidies, though those reports are unconfirmed. But because that estimated total is much higher than other smartphones, the report suggests that the iPhone has "depressed AT&T profit margins."



    AT&T essentially said as much last month, when the company's quarterly earnings fell on the cost of the iPhone subsidy. The successful launch of the iPhone 3GS led to a 15 percent year over year decline for the wireless carrier.



    In addition, Peers said, the Web-centric iPhone has placed a strain on AT&T's network. Because the performance has been so poor, he concludes that public perception has been damaged, something that "may be difficult to repair."



    "Whatever value AT&T got from the device," he concluded, "it seems clear that Apple was the real beneficiary."



    So how is 5 months of a 450 minute plan dragging down their profits? They have made their money back and more on my plan, which is 900 minutes a month. They would have made zero dollars off of me if they didn't have the iPhone. I just don't get it.
  • Reply 2 of 80
    filburtfilburt Posts: 398member
    Sorry, AT&T isn't getting any sympathy for me.



    All iPhone users are paying $30/month to AT&T on 3G data plan. And many aren't getting reliable 3G (and often, not even 2G) coverage. Perhaps that is intended to offset heavier users in well covered areas, but to me, that is close to extortion.



    Perhaps it is difficult to cover the needs of every iPhone users, but at the end of the day, many users are paying for service that isn't being fulfilled. Meanwhile, AT&T salesrep frequently adds features that subscribers did not ask for, which given the format of the bill, is difficult to notice.
  • Reply 3 of 80
    mkralmkral Posts: 58member
    If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.
  • Reply 4 of 80
    tulkastulkas Posts: 3,757member
    boohoo, poor AT&T. Four million new subs is nothing to sneeze at in an industry where customers do not change providers often. Locking them all into two year, extremely lucrative and expensive contracts probably helped cushion the 'blow' of 'only' signing 4 million new customers. That their network was unable to handle the flood of users, simply shows that any poor perception they received was well earned by them and them alone. Apple provides them with a devices that gets them more attention, more new customers and contract locks and it is somehow Apple and the iPhones fault that they couldn't deal with it? What was Apple suppose to do to make it a better deal? Release a more crippled iPhone that users would not want or use and that AT&T could then handle?



    A more honest and accurate report would have said that Apple gave AT&T a golden opportunity with the iPhone exclusivity and AT&T did everything they could to blow it.
  • Reply 5 of 80
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by Tulkas View Post


    A more honest and accurate report would have said that Apple gave AT&T a golden opportunity with the iPhone exclusivity and AT&T did everything they could to blow it.



    More and more reports will come out every couple of weeks from now on --- saying the same thing --- for the rest of the world's carriers' carrying the iphone.



    No iphone carrier is making much money on the iphone --- and that's honest and accurate.
  • Reply 6 of 80
    Rockstar is slow now they want to make games for iPhone and iPod Touch.
  • Reply 7 of 80
    zoolookzoolook Posts: 657member
    Quote:

    "Whatever value AT&T got from the device," he concluded, "it seems clear that Apple was the real beneficiary."



    My heart bleeds. Basically you're saying the people at Apple are a lot smarter than those as AT&T, which is stating the obvious.



    Maybe AT&T should do something about their pathetic network, rather than bitching about their profits. It's interesting that AT&T and Apple are both valued at about $150bn now, but in June 2007 AT&T was valued at about 240bn and Apple was valued at about 120bn - it's clear who is moving in the right directiob.
  • Reply 8 of 80
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by Zoolook View Post


    Maybe AT&T should do something about their pathetic network, rather than bitching about their profits.



    Maybe if instead of using that money on iphone subsidy --- AT&T spent that money on network improvements --- then you would get a much better network.
  • Reply 9 of 80
    cory bauercory bauer Posts: 1,286member
    Quote:
    Originally Posted by AppleInsider View Post


    Author Martin Peers notes that of 10 million iPhone activations since 2007, "only" 40 percent were new customers.



    "Only" indeed. I bet most corporations would kill to have a product that could guarantee 40% sales toward new customers. If they want to sell more iPhones and 2-year contracts (with a built in $30/mo mandatory data plan) they would need to improve their god-awful network and coverage. The only reason I can tolerate them is because talking is the least used feature of my iPhone.
  • Reply 10 of 80
    macslutmacslut Posts: 514member
    Quote:
    Originally Posted by AppleInsider View Post


    Author Martin Peers notes that of 10 million iPhone activations since 2007, "only" 40 percent were new customers.



    That's somewhat misleading. I was an existing AT&T customer, but my bill more than doubled when I got the iPhone because I added services (like data and SMS) to my account. Also, it doesn't take retention into account. There's no way I'd still be an AT&T customer today if it wasn't for the iPhone.



    Still 40% is a pretty high number in of itself.
  • Reply 11 of 80
    MacProMacPro Posts: 19,787member
    Quote:
    Originally Posted by mkral View Post


    If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.



    Exactly my thoughts ...
  • Reply 12 of 80
    'nuff said.
  • Reply 13 of 80
    Officially, summer ends in late September. They still have a couple of weeks to get their butts in motion. It does seem, however, that I am in the minority that is satisfied with AT&T. Reception here in Houston is very good for me.
  • Reply 14 of 80
    The real bad deal for AT&T will come when their exclusivity expires and all of those iPhone customers bolt for better carriers. It seems rare to speak with an iPhone user who doesn't despise AT&T. I left AT&T years ago but came back for the iPhone, but I'll leave again as soon as Apple partners with Verizon.
  • Reply 15 of 80
    monstrositymonstrosity Posts: 2,234member
    Quote:
    Originally Posted by mkral View Post


    If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.



    Exactly.
  • Reply 16 of 80
    bageljoeybageljoey Posts: 2,007member
    Quote:
    Originally Posted by ghostface147 View Post


    It does seem, however, that I am in the minority that is satisfied with AT&T. Reception here in Houston is very good for me.



    Yeah, I have been quite happy with my service too. Doesn't earn you many friends round here to say that, though.
  • Reply 17 of 80
    pubguypubguy Posts: 108member
    Let's not forget, of that 40% new iPhone users, how many were Family Plans bringing more than one phone to the table. Personally, I went for the iPhone and AT&T got 3 additional non-iPhone accounts out of my switch, so the number of overall new subscribers is higher than the iPhone only portion.
  • Reply 18 of 80
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by pubguy View Post


    Let's not forget, of that 40% new iPhone users, how many were Family Plans bringing more than one phone to the table. Personally, I went for the iPhone and AT&T got 3 additional non-iPhone accounts out of my switch, so the number of overall new subscribers is higher than the iPhone only portion.



    It just means that the exodus will be even more massive the minute Verizon gets to sell the iphone.
  • Reply 19 of 80
    cycomikocycomiko Posts: 716member
    Joy! GTA to the iPod means that getting drunk and running over hookers will be easier than ever.
  • Reply 20 of 80
    According to ATT, they had ~ 64MM subscribers at the end of 2Q07 when the iPhone launched. At the end of 2Q09, they have ~ 80MM. According to my math, the iPhone alone represents 4MM/16MM = 25% of all new subscribers over the last 2 years.



    And what's not calculated is how many previous subscribers upgraded from a voice-only plan to ones with data, like myself.



    Color me naive, but it sounds like a pretty sweet deal for ATT.
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