AT&T denies accusations that it pushed its retail outlets to sell iPhones alternatives
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.
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.
Comments
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.
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.
Quote:
Originally Posted by NasserAE
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.
It doesn't seem like they did a very good job of steering people [I]away[/I] from the iPhone...
" Lumia lackluster launch lethargically limped"
+1 for the alliteration.
The iPhone accounted for 73% of all the smartphones AT&T sold... despite AT&T's best efforts.
That's more like it.
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.
Quote:
Originally Posted by Quadra 610
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.
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.
Quote:
Originally Posted by SpamSandwich
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).
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.
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.
Quote:
Originally Posted by Constable Odo
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.
Quote:
Originally Posted by Quadra 610
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?"
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.
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?".
Quote:
Originally Posted by Gatorguy
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.
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.
Won't be a problem when Apple introduces their software-defined radio signal iPhone in a few months.
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.