Apple's iPhone draws more new customers to AT&T than Verizon

Posted:
in iPhone edited January 2014
About 22 percent of customers who bought the iPhone on Verizon last quarter switched from another carrier, while about 23 percent of AT&T iPhone buyers were new to that company.



The launch of the iPhone on Verizon brought fewer than 500,000 new customers to the carrier in less than two months of availability in the first quarter of calendar 2011, according to Reuters. But on rival network AT&T, more than 800,000 new customers joined because of the iPhone.



Still, Verizon topped AT&T in terms of total net subscriber gain, adding 906,000 new customers. AT&T, meanwhile, only added 62,000 net subscribers during the same three-month period.



The race between AT&T and Verizon is of great interest, because AT&T lost exclusive access to the iPhone in February, when Apple's smartphone launched on Verizon's network. Verizon revealed on Thursday that it activated 2.2 million iPhone handsets last quarter, when it was available for purchase for less than two months.



AT&T, meanwhile, activated a record 3.6 million iPhones in the March quarter, an increase of 33 percent from 2010. Those numbers suggested that AT&T was largely unaffected by the launch of the Verizon iPhone -- an outlook bolstered further by the news that the iPhone brought more new customers to AT&T than to Verizon.



The data could also contrast polls that suggested a significant number of AT&T iPhone customers planned to switch to Verizon. A poll conducted late last year found that 26 percent of AT&T iPhone customers said they would switch to the rival network.



Also potentially a factor in gaining new subscribers could be the entry-level $49 iPhone 3GS. Apple's least expensive handset remains exclusive to AT&T, while Verizon's entry-level model is the $199 16GB iPhone 4.



Verizon's network has a much larger 3G footprint in the U.S., and AT&T customers have repeatedly complained about dropped calls. But Verizon's CDMA network also has slower 3G data connection speeds than AT&T on average, and its network cannot allow simultaneous voice and data connections.
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Comments

  • Reply 1 of 48
    al_bundyal_bundy Posts: 1,525member
    verizon also has the Droid phones while AT&T doesn't have any well known android phones. even though they are the same hardware. and the Thunderbolt just hit Verizon as well
  • Reply 2 of 48
    Quote:
    Originally Posted by AppleInsider View Post


    Verizon's CDMA network also has slower 3G data connection speeds than AT&T on average, and its network cannot allow simultaneous voice and data connections.



    Bingo....there's your answer.
  • Reply 3 of 48
    It's an "old" iPhone now, so people are less likely to switch solely for the phone, especially since Verizon is rapidly heading toward LTE.

    Besides, one thing that was noticed at Verizon's launch is that Verizon customers are far more patient, so they aren't in a hurry to get a new phone. After all person come to Verizon for reliability, not speed.
  • Reply 4 of 48
    shadashshadash Posts: 470member
    Quote:
    Originally Posted by noexpectations View Post


    Bingo....there's your answer.



    So why did Verizon add 13 times the number of new subscribers last quarter that AT&T did?
  • Reply 5 of 48
    nobodyynobodyy Posts: 377member
    Misread post. My bad.

    I lolzed.
  • Reply 6 of 48
    Quote:
    Originally Posted by shadash View Post


    So why did Verizon add 13 times the number of new subscribers last quarter that AT&T did?



    The bigger question is, after 3.5 years of built-up iPhone demand, why didn't they get more? in 1Q11, AT&T still sold more iPhones than Verizon. Keep in mind that Verizon announced the iPhone on Jan 11th (and one can argue that this was common knowledge back in 4Q10), so they did have almost 2.5 out of 3 months in 1Q to steal away AT&T customers. The published churn rates showed that very few AT&T customers left.



    I truly believe that smart phones are devices that require/crave speed and multitasking. CDMA (Verizon) just can't offer that.
  • Reply 7 of 48
    Quote:
    Originally Posted by AppleInsider View Post


    About 22 percent of customers who bought the iPhone on Verizon last quarter switched from another carrier, while about 23 percent of AT&T iPhone buyers were new to that company....



    I don't think the numbers say what the author thinks they do. 23% vs. 22% is basically a wash.



    All the other numbers quoted (of actual subscribers, sales, prices, etc.) are meaningless because they aren't corrected for market size, network reach or the current subscriber figures for each company which must of course be different.



    The only real measure would be the percentage of new users relative to each individual company's current numbers for users. If that's the percentages quoted above, then it's a wash and not a story at all.
  • Reply 8 of 48
    al_bundyal_bundy Posts: 1,525member
    Quote:
    Originally Posted by noexpectations View Post


    The bigger question is, after 3.5 years of built-up iPhone demand, why didn't they get more? in 1Q11, AT&T still sold more iPhones than Verizon. Keep in mind that Verizon announced the iPhone on Jan 11th (and one can argue that this was common knowledge back in 4Q10), so they did have almost 2.5 out of 3 months in 1Q to steal away AT&T customers. The published churn rates showed that very few AT&T customers left.



    I truly believe that smart phones are devices that require/crave speed and multitasking. CDMA (Verizon) just can't offer that.



    AT&T said 80% of their smartphone customers are on family plans. i'm on a plan with my wife and her parents. $160 or so for 4 phones, 2 dumb phones, iphone 4 and my HTC phone. if i was to leave and go to verizon myself the bill would drop to $140 plus an $80 verizon bill. plus the cost of the phone, activation, etc. not worth it



    the family plan is 700 shared minutes and 2 data plans. a loss of one smartphone only lowers the bill by $20 unless we go to a lower minute plan. and going to verizon means i know have to use minutes to call my wife and her parents



    and all our phones are on different contract expiration dates. my HTC and my father in law's new phone are almost 2 years away. wife's iphone is 18 months from now and the last line is a few months. even if i hadn't bought a new phone i would still have to wait the 18 months for my wife's iphone 4 to be paid off.
  • Reply 9 of 48
    AT&T sold more iPhones and Verizon added more customers?



    Not a good sign for AT&T.



    First, it looks like this article includes three months of iPhone sales for AT&T and two months for Verizon.



    If AT&T activates over a million iPhones per month on the front end, then there are at least a million customers on the back end of their contracts. Verizon has a churn free ride for two years, while AT&T and Verizon fight over AT&T's back end. This is where the battle for subscribers will be waged and Verizon has everything to gain and not a subscriber to lose.



    AT&T is making up for their losses by adding customers who want to pay or can afford to pay $49 for an iPhone. This is good for their subscriber numbers, but not so good for the bottom line since these customers are prime target for early termination as their hefty voice and data plans become due month after month.



    It's not mathematically possible for AT&T to be the winner in subscriber gain for the next two years.
  • Reply 10 of 48
    Quote:
    Originally Posted by PleasantDrive View Post


    AT&T sold more iPhones and Verizon added more customers?



    Not a good sign for AT&T.



    First, it looks like this article includes three months of iPhone sales for AT&T and two months for Verizon.



    If AT&T activates over a million iPhones per month on the front end, then there are at least a million customers on the back end of their contracts. Verizon has a churn free ride for two years, while AT&T and Verizon fight over AT&T's back end. This is where the battle for subscribers will be waged and Verizon has everything to gain and not a subscriber to lose.



    AT&T is making up for their losses by adding customers who want to pay or can afford to pay $49 for an iPhone. This is good for their subscriber numbers, but not so good for the bottom line since these customers are prime target for early termination as their hefty voice and data plans become due month after month.



    It's not mathematically possible for AT&T to be the winner in subscriber gain for the next two years.



    The real numbers will come when both AT&T and Verizon get a version of the next iPhone at the same time.

    I think it's mathematically possible for AT&T to be the winner in smartphone subscriber gain since they are the company to choose if you want speed and/or simultaneous calling and surfing, but they can't be the overall subscriber gain winner because they do not have reliability on their side.



    Just wait until 4G and then we'll see who the winner is.
  • Reply 11 of 48
    twelvetwelve Posts: 49member
    Here's hoping that the iPhone5 will be offered for Sprint as well. Many Evo and Epic owners only bought them out of loyalty to Sprint. If you're in their coverage area, the unlimited data plans are very sticky.



    If forced to choose between AT&T and Verizon, CDMA handles voice much better than GSM. It has a wider frequency range, especially as it approaches the point of losing signal, and the amplitude algorithms make voice more natural.



    Unfortunately, if you travel abroad, GSM is the clear winner. It's another case of VHS winning over Beta. Technical superiority means nothing when you can't get signal (or content).



    If the iPhone5 is a world phone (with both CDMA and GSM), you'll see a lot more business going toward Verizon.
  • Reply 12 of 48
    With contracts and termination fees there is market friction, especially for short time horizons. So results need to be discounted to a certain degree.



    I for one plan to switch to Verizon but still have three more months to go on the contract. Then I might as well wait for version 5 ( or "s" ).
  • Reply 13 of 48
    I do not have the precise numbers but the unit values given are for the quarter: Jan-March 2011.



    AT&T had all the three months to sell the iPhone => 3.6 million/3months = 1.2million/month.



    In contrast, Verizon had less than two months to do the same => 2.2 million/2month = 1.1million/month. If we consider that it is less than two months, the values are almost the same.



    While consumers from AT&T may have expressed interest to shift to Verizon, it should not be forgotten that the cost of terminating a contract is very high, and has been increased just before the Verizon iPhone was announced. Thus, in spite of their bluster to shift carriers, this could be a factor in the decision. Who knows how many AT&T customers would shift, once their contract ends.



    There are other factors that should be considered too. AT&T has sweetened their deals to mitigate customers from migrating back to Verizon, e.g., the 1000 minutes bonus. I am not sure if Verizon does carryover of unused minutes, but this deal and the carryover feature is very good for people with limited monthly minutes. If memory serves me correctly, AT&T also matched other options that Verizon was able to offer.



    The aforementioned are the beneficial impacts of competition within a given market.



    Tim Cook indicated that the $49 3Gs iPhone exclusive to AT&T was very popular and might have enticed AT&T customers to shift from other brands (this data on this would be interesting). This would partly explain the higher than expected number of iPhone customers within AT&T, without much gain coming from other carriers.



    One big thing that may dissuade AT&T customers from shifting also was the fact that in the current dichotomy in the technology of the iPhone, the iPhone for AT&T is more universal at present; thus a must for those who travel to other countries frequently. This may change as the technology shifts to the 4G or even earlier, if Apple decides to integrate both current technologies in a single phone. It is not certain that they will do that because there will always still be dichotomies in the backup technologies during the transition to the 4G.



    One more thing, once faced to make the decision, people had to consider what they value most. For example, those who like to be able to make calls and do "data" at the same time may find the current Verizon technology to be subpar.



    Finally, it is too soon to make these definitive comparisons. Remember when analysts and bloggers were saying that Japanese did not like the iPhone or were so gleeful when the iPhone did not do so well during its first introduction in China? Now, the iPhone to my knowledge is the most popular smartphone in Japan, it has gained inroad in South Korea and just less than a quarter of Apple's total revenue is generated from China. The latter will continue to increase in time.



    The next iPhone iteration over a longer period of time may be more telling.



    Apple Ecosystems
  • Reply 14 of 48
    jukesjukes Posts: 213member
    One word: iPhone5. Why switch for an iPhone4? And those of us already-Verizon people figure we can hold out for a couple more months since we've already waited three years.
  • Reply 15 of 48
    Quote:
    Originally Posted by AppleInsider View Post


    Verizon's network has a much larger 3G footprint in the U.S., and AT&T customers have repeatedly complained about dropped calls. But Verizon's CDMA network also has slower 3G data connection speeds than AT&T on average, and its network cannot allow simultaneous voice and data connections.



    Nothing surprising. This is pretty much Verizon's own mixed baggage. Not even an integrated GSM/CDMA iPhone will help them.
  • Reply 16 of 48
    neiltc13neiltc13 Posts: 182member
    Finally the USA folks will have to realise the reason Android is ahead is nothing to do with iPhone being on only one carrier for the first few years.



    People from the rest of the world (where iPhone is available on multiple carriers in many countries) have known this for a long time.
  • Reply 17 of 48
    kansaskansas Posts: 17member
    I am a Verizon customer and since AT&T does not provide wireless service to my rural area of Kansas, if I want an iPhone, Verizon is currently my only option. I decided to not get into too big of a hurry since the iPhone 5 is probably not too far around the corner.
  • Reply 18 of 48
    Fail. This site is so full of fail. I don't understand how it's included on Google News. It's like Google News including my 13 year old nephew's blog about StarCraft II.



    "About 22 percent of customers who bought the iPhone on Verizon last quarter switched from another carrier, while about 23 percent of AT&T iPhone buyers were new to that company."



    Could this have maybe had something to do with previous Verizon customers waiting for the iPhone to come to them?







    "The launch of the iPhone on Verizon brought fewer than 500,000 new customers to the carrier in less than two months of availability in the first quarter of calendar 2011, according to Reuters. But on rival network AT&T, more than 800,000 new customers joined because of the iPhone."



    2 months vs. 3 months. Not a fair comparison at all. Is AppleInsider still defending AT&T since that was Steve's first choice?
  • Reply 19 of 48
    AT&T's numbers include ALL activations whether someone buys a new phone or not. So, for example, If you already have an AT&T account and are still under contract, you can buy a used iPhone on eBay and they will activate it for you. You might do this because you want an iPhone, or a newer iPhone, and are still under contract, so can't get subsidized pricing. That way you get a new iPhone but your contract doesn't start over. Another reason someone might do this is to tide them over until their contract runs out and they can move to Verizon.



    That type of transaction above is counted by AT&T as an activation in their numbers even though it's neither a new customer nor a new phone. Just an activation. But zero revenue to AT&T or Apple. This really distorts AT&T's numbers.



    In fact, I just did this myself even though my contract has expired. I did it because I want an iPhone 5 when they come out and couldn't wait cuz my iPhone 3G was incredibly slow. I also didn't want to commit to a vendor yet with a contract because I wanted to see how things would look on each of their networks after they both have the iPhone. Because I am more concerned about data speeds (I think AT&T is better there) vs. call quality(I think Verizon is way better there), I will probably end up staying with AT&T but that could change.
  • Reply 20 of 48
    dasanman69dasanman69 Posts: 12,980member
    Quote:
    Originally Posted by robbydek View Post


    The real numbers will come when both AT&T and Verizon get a version of the next iPhone at the same time.

    I think it's mathematically possible for AT&T to be the winner in smartphone subscriber gain since they are the company to choose if you want speed and/or simultaneous calling and surfing, but they can't be the overall subscriber gain winner because they do not have reliability on their side.



    Just wait until 4G and then we'll see who the winner is.



    The Thunderbolt and the upcoming crop of LTE phones on VZW all support simultaneous surf and talk. That limitation of VZW's network is quickly going by the wayside.
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