2.5m AT&T iPhone users; Piper on WWDC Macs; 3G stock panic

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  • Reply 121 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by melgross View Post


    One mistake that's being made here is that some people are trying to make it out that if the iPhone isn't the only reason, or almost the only reason why people are crossing over to AT&T, then it isn't very important. That's so wrong, it's difficult to emphasize it enough.



    There's no doubt that its brought a big boost to AT&T. Denying that is just not sustainable, or believable.



    I think that the mistake is the other way around --- that the iphone is the only reason or almost the only reason why people are coming over to AT&T. Various carriers have acknowledged that a lot of people migrated to the $99 unlimited voice plan --- in a number that is greater than the iphone subscriber numbers.



    It's not really a big boost --- when there is 1.5 million net adds of prepaid bringing in something like $15 a month and then 360K iphones bringing in $95 a month. It's like a 4:1 ratio --- average the 2 numbers out and you have the ARPU down to $31 a month.
  • Reply 122 of 188
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by samab View Post


    ...there is 1.5 million net adds of prepaid bringing in something like $15 a month and then 360K iphones bringing in $95 a month. It's like a 4:1 ratio --- average the 2 numbers out and you have the ARPU down to $31 a month.



    You might want to revise your number to better suit your argument. Since are saying that the iPhone addition adds a minimal gain averaging out the two makes no sense. Using your number we see that the iPhone with less than 25% the number of prepaid phones accounts for more than 50% more revenue pre month.



    1,500,000 x $15 = $22,500,000



    ..360,000 x $95 = $34,200,000
  • Reply 123 of 188
    melgrossmelgross Posts: 33,618member
    Quote:
    Originally Posted by samab View Post


    I think that the mistake is the other way around --- that the iphone is the only reason or almost the only reason why people are coming over to AT&T. Various carriers have acknowledged that a lot of people migrated to the $99 unlimited voice plan --- in a number that is greater than the iphone subscriber numbers.



    It's not really a big boost --- when there is 1.5 million net adds of prepaid bringing in something like $15 a month and then 360K iphones bringing in $95 a month. It's like a 4:1 ratio --- average the 2 numbers out and you have the ARPU down to $31 a month.



    But, you're coming up with your own numbers. Where did you get $15? Is that a real number, or one you're just guessing at? After all the ARPU for the company is over $50, and from the number of iPhones, they can't be contributing more than a few dollars to that figure..
  • Reply 124 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by melgross View Post


    But, you're coming up with your own numbers. Where did you get $15? Is that a real number, or one you're just guessing at? After all the ARPU for the company is over $50, and from the number of iPhones, they can't be contributing more than a few dollars to that figure..



    Tracfone's ARPU was $11 in 2008 Q1.



    http://www.americamovil.com/docs/rep...ng/2008_1.html
  • Reply 125 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by solipsism View Post


    You might want to revise your number to better suit your argument. Since are saying that the iPhone addition adds a minimal gain averaging out the two makes no sense. Using your number we see that the iPhone with less than 25% the number of prepaid phones accounts for more than 50% more revenue pre month.



    1,500,000 x $15 = $22,500,000



    ..360,000 x $95 = $34,200,000




    It certainly makes sense --- to illustrate that the iphone effect does not make or break AT&T's results. Average the two out is 1.86 million subscribers = $56.7 million, ARPU = $30.4.



    If AT&T didn't concentrate on prepaid net adds, then they don't need the extra-ordinary iphone ARPU to average it back up. AT&T went to the extreme low end and the extreme high end --- because Verizon got the middle.
  • Reply 126 of 188
    tbagginstbaggins Posts: 2,306member
    Quote:
    Originally Posted by melgross View Post


    One mistake that's being made here is that some people are trying to make it out that if the iPhone isn't the only reason, or almost the only reason why people are crossing over to AT&T, then it isn't very important.



    Even though the iPhone is obviously nowhere near being the sole or even biggest driver of ATT's growth in net adds, there is no doubt that it's quite important to ATT. It helps get 'butts in the door' (maybe not as much as shortly after launch, but still), and it's really helping out ATT in an area where they've been weak... data ARPU.



    After all, one of ATT's Achilles heels has been that they've been so far behind Verizon and Sprint in rolling out their 3G network, and you want one of those, precisely for data ARPU reasons. So... if you can't get a 3G network up as fast as your competitors, what do you do? That's right, you get the exclusive rights to the device that will most drive mobile data usage, even if you're behind on the high-speed data network part of the equation... the iPhone.



    Nice save on ATT's part, really.





    Quote:

    The fact is that the numbers at Verison and AT&T don't matter at all in this discussion.



    Well, they kinda do, from ATT and Verizon's perspective anyway. They both see each other as their prime competition, especially now that Sprint's fading. A lot of what ATT does drives what VZW does, and a lot of what VZW does drives what ATT does. It's a war, pretty much.





    Quote:

    IF AT&T is not as good as Verison, that tells us even more about how important the iPhone is. Makes it even more relevant. Since it's agreed in the industry that AT&T gets about $95+ from the iPhone compared to about $50 for all other phones, it's bringing up AT&T's numbers as well. Prepaid brings those numbers down.



    Exactly, the iPhone is a savior for ATT in ARPU and especially in data ARPU. What would be really interesting is to see some iPhone-only churn numbers, it may be helping ATT there as well.





    Quote:

    There's no doubt that its brought a big boost to AT&T. Denying that is just not sustainable, or believable.



    It's not so much a matter of denying it, as it is putting it in perspective. Noting that ATT is doing fantastically well in prepaid and is benefiting from Sprint's self-destruction does not negate the iPhone's contribution. At least to me.



    Though I will admit I am surprised at how mediocre ATT's postpaid numbers are, for such a large carrier. No doubt that without the iPhone, ATT's postpaid/contract numbers would be even lower.



    So basically, what the iPhone has done fantastically well, in ARPU, data ARPU, 3G rollout, and postpaid, is shore up ATT where they are weak. It's no wonder that ATT jumped at the opportunity to get the iPhone, and was willing to give Apple so much. And, conversely, you can start to see why Verizon said no to the iPhone... they're doing pretty well in all those areas, and thus needed Apple less.





    .
  • Reply 127 of 188
    tbagginstbaggins Posts: 2,306member
    Oh, and I don't know what it is for Tracfone, but for Boost Mobile (another big prepay MVNO), APRU was around $29, last I checked.



    .
  • Reply 128 of 188
    melgrossmelgross Posts: 33,618member
    Quote:
    Originally Posted by samab View Post


    Tracfone's ARPU was $11 in 2008 Q1.



    http://www.americamovil.com/docs/rep...ng/2008_1.html



    Now you have to explain what that has to do with US cell companies, and AT&T here, as well.



    I see no connection.
  • Reply 129 of 188
    melgrossmelgross Posts: 33,618member
    Quote:
    Originally Posted by TBaggins View Post


    Even though the iPhone is obviously nowhere near being the sole or even biggest driver of ATT's growth in net adds, there is no doubt that it's quite important to ATT. It helps get 'butts in the door' (maybe not as much as shortly after launch, but still), and it's really helping out ATT in an area where they've been weak... data ARPU.



    After all, one of ATT's Achilles heels has been that they've been so far behind Verizon and Sprint in rolling out their 3G network, and you want one of those, precisely for data ARPU reasons. So... if you can't get a 3G network up as fast as your competitors, what do you do? That's right, you get the exclusive rights to the device that will most drive mobile data usage, even if you're behind on the high-speed data network part of the equation... the iPhone.



    Nice save on ATT's part, really.









    Well, they kinda do, from ATT and Verizon's perspective anyway. They both see each other as their prime competition, especially now that Sprint's fading. A lot of what ATT does drives what VZW does, and a lot of what VZW does drives what ATT does. It's a war, pretty much.









    Exactly, the iPhone is a savior for ATT in ARPU and especially in data ARPU. What would be really interesting is to see some iPhone-only churn numbers, it may be helping ATT there as well.









    It's not so much a matter of denying it, as it is putting it in perspective. Noting that ATT is doing fantastically well in prepaid and is benefiting from Sprint's self-destruction does not negate the iPhone's contribution. At least to me.



    Though I will admit I am surprised at how mediocre ATT's postpaid numbers are, for such a large carrier. No doubt that without the iPhone, ATT's postpaid/contract numbers would be even lower.



    So basically, what the iPhone has done fantastically well, in ARPU, data ARPU, 3G rollout, and postpaid, is shore up ATT where they are weak. It's no wonder that ATT jumped at the opportunity to get the iPhone, and was willing to give Apple so much. And, conversely, you can start to see why Verizon said no to the iPhone... they're doing pretty well in all those areas, and thus needed Apple less.





    .



    All I'm trying to say, and it's why I illustrated it with the other observations, is that with only one model phone in the mix as of now, Apple can't be expected to do more than add an incremental amount to any company's sales and bottom line. With just the one model iPhone, AT&T won't see a vast amount of take-up. They'll see take-up that can be expected from a pretty popular phone, which gives them about twice the revenue than the average phone.



    That's what can be expected, and it's what we see.



    Now, iF Apple does come up with a line of phones, say a low cost, mid priced, and deluxe range, with a couple of storage options for each, THEN we may see a stampede!



    I say that AT&T and Verison's revenue and profit don't matter here, for this discussion of the iPhone's performance. Not that it doesn't matter to them. I meant that we should look to what the iPhone is adding to AT&T. Would AT&T have that same amount if it weren't for the iPhone? No. That's what I mean. The addition, not the total.



    I'm not saying that you're denying it. but samab seems to be trying to.
  • Reply 130 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by melgross View Post


    Now you have to explain what that has to do with US cell companies, and AT&T here, as well.



    I see no connection.



    America Movil owns Tracfone in the US.



    Tracfone is the biggest reason why AT&T's numbers are so good for the last 2 years because Tracfone is a MVNO that uses AT&T's network.
  • Reply 131 of 188
    melgrossmelgross Posts: 33,618member
    Quote:
    Originally Posted by samab View Post


    America Movil owns Tracfone in the US.



    Tracfone is the biggest reason why AT&T's numbers are so good for the last 2 years because Tracfone is a MVNO that uses AT&T's network.



    That has nothing to do with it. That's a separate business for AT&T. They get paid for the use of their network, just as you say. There's no ARPU involved for AT&T here.
  • Reply 132 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by melgross View Post


    I meant that we should look to what the iPhone is adding to AT&T. Would AT&T have that same amount if it weren't for the iPhone? No. That's what I mean. The addition, not the total.



    I'm not saying that you're denying it. but samab seems to be trying to.



    This is like Bill Gates laughing that he receives millions of spam everyday --- mostly on how to make a quick buck.



    The value that the iphone is adding to AT&T --- is directly related to how competent AT&T is. If you know what you are doing (like Bill Gates and Verizon), then the iphone's value is dramatically reduced.
  • Reply 133 of 188
    tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by TBaggins View Post


    It's all relative. Is ATT happy to take in all those prepay customers? Sure, even with the lower APRU and higher churn they bring. But do they wish they were getting Verizon-like postpaid(contract) numbers as well? You bet they do. The 3G iPhone should be of some help there.



    You guys attempt to make it all soundso much more dramatic than it really is. Verizon made 73 cents more in ARPU and only has a .5% better churn rate.In Q1



    Verizon was actually down in new subscribers quarter over quarter from last year, while ATT was up. ATT had 4.3% higher service revenue growth.









    Quote:

    And yet somehow Verizon always beats ATT in customer loyalty/churn. Kinda confirms what JD Power and Consumer Reports wireless surveys consistently say, which is that there's a quality gap between the two carries, in VZW's favor.



    Yes people are willing to pay the additional cost. But don't treat it like some mystery why Verizon has a higher ARPU. They charge more.





    As prices continue to decline and other mobile companies improve services and phones. The tide could turn for Verizons pricing.
  • Reply 134 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by melgross View Post


    That has nothing to do with it. That's a separate business for AT&T. They get paid for the use of their network, just as you say. There's no ARPU involved for AT&T here.



    Tracfone's 9+ million subcribers is included in AT&T's SEC filings. AT&T doesn't exclude Tracfone's numbers from their ARPU calculation.



    Verizon Wireless does separate the numbers --- by giving out RETAIL numbers. They would state we have so many RETAIL subscribers, so many RETAIL postpaid subscribers and that their RETAIL postpaid subscribers have xxx amount in ARPU. Verizon has a bunch of OnStar MVNO subscribers --- which is under the WHOLESALE column.
  • Reply 135 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by TenoBell View Post


    As prices continue to decline and other mobile companies improve services and phones. The tide could turn for Verizons pricing.



    AT&T's ARPU declined quarter to quarter over last year. Verizon's ARPU increased quarter to quarter over the last year.
  • Reply 136 of 188
    tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by samab View Post


    This is like Bill Gates laughing that he receives millions of spam everyday --- mostly on how to make a quick buck.



    The value that the iphone is adding to AT&T --- is directly related to how competent AT&T is. If you know what you are doing (like Bill Gates and Verizon), then the iphone's value is dramatically reduced.



    This made absolutely no sense.
  • Reply 137 of 188
    tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by samab View Post


    AT&T's ARPU declined quarter to quarter over last year. Verizon's ARPU increased quarter to quarter over the last year.



    Looking at Sprint's ARPU this is next to meaningless.
  • Reply 138 of 188
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by TenoBell View Post


    Looking at Sprint's ARPU this is next to meaningless.



    Not your point though.



    Verizon continues to charge more than anyone else and continues to bring in more net adds than anyone else.
  • Reply 139 of 188
    addaboxaddabox Posts: 12,665member
    Quote:
    Originally Posted by TenoBell View Post


    This made absolutely no sense.



    I think his idea is that the iPhone is somehow a substitute for being really special, like Verizon, and that, therefore, while the iPhone may somewhat drive ATT subscription rates, it doesn't really count because it's cheating.



    Which is the most convoluted rationale for "the iPhone ain't shit" I've seen yet, and that's saying something.
  • Reply 140 of 188
    tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by samab View Post


    Not your point though.



    My point is that Verizon is doing slightly better than ATT at some data points. This largely has nothing to do directly with the iPhone itself.



    Quote:

    Verizon continues to charge more than anyone else and continues to bring in more net adds than anyone else.



    I agree Verizons network coverage is its strength. This allows them to charge a premium but that does not mean it will continue to be this way.
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