About 45% of those who bought the BB Storm were new to Verizon. So that may be a normal metric.
ATT has a slightly higher churn rate than Verizon, at the same time ATT is adding far more subscribers than it looses.
As ATT lead in subscribers only continues to grow, it doesn't matter if much of that comes from more pay as you go subscribers. Paying subscribers are paying subscribers.
Quote:
Originally Posted by samab
40% of 7 million iphone activations were new AT&T customers. But AT&T also have higher churn rates, so more people are leaving AT&T than leaving Verizon.
The delta has always been about prepaid. It's been pretty much a tie in terms of pospaid net adds for the last few quarters now.
40% of 7 million iphone activations were new AT&T customers. But AT&T also have higher churn rates, so more people are leaving AT&T than leaving Verizon.
The delta has always been about prepaid. It's been pretty much a tie in terms of pospaid net adds for the last few quarters now.
If you read the article I provided, you would have seen that there is much less churn with iPhone purchasers, in addition to a much higher than average monthly subscription payment of over $100.
That's a very high value, and is why, new subscribers or not, AT&T is so interested in its iPhone subscribers.
And anyone could have bought Alltel, but it was Verizon that thought they needed them.
Mel, while true anyone could have bought Alltel, it seems to me the that for the economics to work it would have to be another CDMA carrier, thus Verizon or Sprint-Nextel and I'm not sure Sprint-Nextel can afford to buy anything.
Mel, while true anyone could have bought Alltel, it seems to me the that for the economics to work it would have to be another CDMA carrier, thus Verizon or Sprint-Nextel and I'm not sure Sprint-Nextel can afford to buy anything.
Of course it does. I was just pointing out that there was nothing special here about this purchase. Sprint needed them more than did Verizon.
I suspect that Verizon bought them because they are losing the sign-up race with AT&T (and they had the money, whereas Sprint did not), and it looked nasty. This brings them a small bit ahead for awhile.
If you read the article I provided, you would have seen that there is much less churn with iPhone purchasers, in addition to a much higher than average monthly subscription payment of over $100.
That's a very high value, and is why, new subscribers or not, AT&T is so interested in its iPhone subscribers.
AT&T is so interested in the high ARPU, long contract, less churning iphone customers because AT&T also concentrated on the low ARPU, prepaid and extremely high churning prepaid customers (Tracfone has like a $12 ARPU).
AT&T is like GM trying to sell high end Cadillac and cheap Chevrolet ---- meanwhile Verizon is selling the middle class Honda Accord.
AT&T only quoted their postpaid ARPU in their quarterly reports because Verizon has a higher overall ARPU than AT&T.
Of course it does. I was just pointing out that there was nothing special here about this purchase. Sprint needed them more than did Verizon.
I suspect that Verizon bought them because they are losing the sign-up race with AT&T (and they had the money, whereas Sprint did not), and it looked nasty. This brings them a small bit ahead for awhile.
Alltel was put up for sale the second time because the Private Equity firms that bought Alltel couldn't find financing. And Verizon managed to purchase Alltel at the same price as the Private Equity firms (yet Alltel has grown 10% larger).
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
As ATT lead in subscribers only continues to grow, it doesn't matter if much of that comes from more pay as you go subscribers. Paying subscribers are paying subscribers.
AT&T is trying to buy market share at the expense of profitibility. For a company with 5 million more wireless subscribers than Verizon Wireless, AT&T Wireless makes about $1 billion less per quarter.
I think Samab the reason we keep debating is because you won't simply concede that both companies are doing well over all.
You paint the picture as though Verizon is executing perfectly and everything is going well. While you paint AT&T as bumbling idiots who are lucky to still be in business.
I would say both have their strengths and weaknesses, both are making money hand over fist.
Quote:
Originally Posted by samab
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
I think Samab the reason we keep debating is because you won't simply concede that both companies are doing well over all.
You paint the picture as though Verizon is executing perfectly and everything is going well. While you paint AT&T as bumbling idiots who are lucky to still be in business.
I would say both have their strengths and weaknesses, both are making money hand over fist.
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
I wouldn't call Verizon bumbling idiots. But they did make a mistake in turning down the iPhone. If for nothing else they allowed AT&T to have a killer product.
Of course Verizon is buying marketshare with Alltel. The same as Cingular bought marketshare when it merged with AT&T. In a business built on subscriber growth that is the purpose of mergers.
Quote:
Originally Posted by samab
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
I wouldn't call Verizon bumbling idiots. But they did make a mistake in turning down the iPhone. If for nothing else they allowed AT&T to have a killer product.
Of course Verizon is buying marketshare with Alltel. The same as Cingular bought marketshare when it merged with AT&T. In a business built on subscriber growth that is the purpose of mergers.
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ). History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
Verizon does not make a billion more than AT&T every quarter. Part of Verizon's succes is also attributable to it's broadband business, it's not all wireless.
Quote:
Originally Posted by samab
AT&T is trying to buy market share at the expense of profitibility. For a company with 5 million more wireless subscribers than Verizon Wireless, AT&T Wireless makes about $1 billion less per quarter.
Soooo, AT&T has the best selling phone in the country, and Verizon has them right where they want them. Dude, you are completely and irrationally biased.
Again the only way I can read this, everything Verizon does is right, everything ATT does (no matter how successful) is wrong.
Quote:
Originally Posted by samab
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ). History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ).
Which is why they may be subsidizing the BBS more than AT&T does the iPhone?
Quote:
History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
History has shown that Verizon was able to attract more postpaid subscribers than Cingular/AT&T on the basis of it's superior network (or at least perception thereof) prior to the iPhone. Mmm...seems like a mistake if there is parity now.
Quote:
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
Alltel was 13M customers right? Personally, I think VZW purchased Alltel for the way their executive staff has managed innovation as much as for the hard assets of subscribers and towers. Alltel managed to push video usage faster than any of its big competitors and has a slew of interesting services.
But I have a suspicion that Verizon's corporate culture will simply smother Alltel's innovative culture despite any good intentions.
Frankly, if Verizon had the iPhone, regardless of "cost" (aka control), then Cingular/AT&T would have been sucking wind and Verizon completely dominant. It was a significant strategic error to give AT&T the window to grow. Whether that was really obvious or not is debatable but AT&T certainly grabbed on with both hands and ran the ball all the way down the field. It was pretty obvious to them that the iPhone was no ROKR.
What probably would have been a blowout is a real game. It's pretty hard to defend VZW's passing on the deal.
Amusingly, I have AT&T Wireless for my iPhone, FiOS for internet and Xohm for WiMAX connectivity.
AT&T is so interested in the high ARPU, long contract, less churning iphone customers because AT&T also concentrated on the low ARPU, prepaid and extremely high churning prepaid customers (Tracfone has like a $12 ARPU).
AT&T is like GM trying to sell high end Cadillac and cheap Chevrolet ---- meanwhile Verizon is selling the middle class Honda Accord.
AT&T only quoted their postpaid ARPU in their quarterly reports because Verizon has a higher overall ARPU than AT&T.
I understand what you're saying, but I really don't think this is an issue here.
Alltel was put up for sale the second time because the Private Equity firms that bought Alltel couldn't find financing. And Verizon managed to purchase Alltel at the same price as the Private Equity firms (yet Alltel has grown 10% larger).
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
I didn't say they were desperate. But its a very good marketing tool to say that "we are the largest carrier". If their marketshare shrinks, and they become the second largest, people (the great unwashed public) think that something is wrong with them, and jump ship. This is happening to Sprint, even though they are much better than they were before. Customers are like rats.
This gives the back the prestige of being the biggest, for a while, at least.
Cingular wasn't desperate either, but they felt that they had to bulk up, and they did. AT&T was the one with the problems, as was Alltel.
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
That is so far away from the truth.
I don't think either of those statements are true.
but there is no doubt that Verizon is looking at the iPhone with some envy. They aren't the only ones.
This is pretty obvious. Otherwise, they wouldn't all be trying to have phones that directly compete. And it's costing Verizon plenty to do this. Don't think otherwise.
Most of those costs AT&T had this quarter weren't due to the iPhone up front payments, though a good portion were. They spelled it out in their statements.
Verizon does not make a billion more than AT&T every quarter. Part of Verizon's succes is also attributable to it's broadband business, it's not all wireless.
No, I am talking about the wireless business alone. Just look at the SEC filings and they will give you the detailed numbers.
Quote:
Originally Posted by TenoBell
Soooo, AT&T has the best selling phone in the country.
For one or 2 quarters initially after the launch, iphone has been selling great. The LG Voyager outsold the first gen iphone in the US. The Storm is selling fairly well. My whole point is that a second rate copycat can do a decent job without Verizon paying a king's ransom and without Verizon issuing a profit warning.
Quote:
Originally Posted by vinea
History has shown that Verizon was able to attract more postpaid subscribers than Cingular/AT&T on the basis of it's superior network (or at least perception thereof) prior to the iPhone. Mmm...seems like a mistake if there is parity now.
Frankly, if Verizon had the iPhone, regardless of "cost" (aka control), then Cingular/AT&T would have been sucking wind and Verizon completely dominant. It was a significant strategic error to give AT&T the window to grow.
As a consumer, I think people would prefer Verizon to spend that huge iphone subsidy on network improvements.
It was a strategic error for Apple not to sign Verizon in the first place. If Apple gave up sooner on the idiotic high iphone retail price and idiotic revenue sharing idea (which they eventually did) ---- we would be talking about Apple selling the 50 millionth iphone right now.
Quote:
Originally Posted by melgross
I didn't say they were desperate. But its a very good marketing tool to say that "we are the largest carrier". If their marketshare shrinks, and they become the second largest, people (the great unwashed public) think that something is wrong with them, and jump ship.
Cingular wasn't desperate either, but they felt that they had to bulk up, and they did. AT&T was the one with the problems, as was Alltel.
Verizon has been number 2 for 4 years now --- and they could have EASILY overtaken AT&T by just selling more prepaid. Verizon didn't do it. So it has NOTHING to do with just "we are the largest carrier".
Cingular got into a bidding war against Vodafone for AT&T Wireless. Verizon didn't get into a bidding war against the private equity firms for Alltel. Whether or not you would call it desperate --- Cingular is closer to the desperation scale than Verizon.
Quote:
Originally Posted by melgross
but there is no doubt that Verizon is looking at the iPhone with some envy. They aren't the only ones.
This is pretty obvious. Otherwise, they wouldn't all be trying to have phones that directly compete. And it's costing Verizon plenty to do this. Don't think otherwise.
Verizon didn't issue a profit warning on the Storm subsidy vs. AT&T issuing a profit warning on the iphone subsidy. Verizon thinks that a second rate copycat that doesn't cost an arm and a leg is good enough to compete with AT&T.
It was a strategic error for Apple not to sign Verizon in the first place. If Apple gave up sooner on the idiotic high iphone retail price and idiotic revenue sharing idea (which they eventually did) ---- we would be talking about Apple selling the 50 millionth iphone right now.
That's untrue. If they did, they would now have two SKU's, with the requirement of four models, with higher attendent costs, and lower profits.
They did the right thing. Verizon would have done them little good.
Quote:
Verizon has been number 2 for 4 years now --- and they could have EASILY overtaken AT&T by just selling more prepaid. Verizon didn't do it. So it has NOTHING to do with just "we are the largest carrier".
YOU say they could have caught up. But that's just you talking.
They do care, they just hadn't the chance at an affordable price before.
Quote:
Cingular got into a bidding war against Vodafone for AT&T Wireless. Verizon didn't get into a bidding war against the private equity firms for Alltel. Whether or not you would call it desperate --- Cingular is closer to the desperation scale than Verizon.
Don't forget the relationship between Verizon and Vodaphone. To ignore that is to ignore the realities.
Quote:
Verizon didn't issue a profit warning on the Storm subsidy vs. AT&T issuing a profit warning on the iphone subsidy. Verizon thinks that a second rate copycat that doesn't cost an arm and a leg is good enough to compete with AT&T.
Verizon also hasn't said that they expect to make so much more on the Storm over the next two years, as AT&T does with the iPhone.
With much less profit from the Storm, it would have been pretty stupid to pay out so much in the beginning. It is interesting though, that iSupply has found that the costs to build the Storm (in parts) significently exceeds that of the iPhone. Someone is paying for that. It's also very possiblr that Verizon is just not talking. Besides, they sold so many less Storms than did AT&T sell iPhones, that the costs to them SHOULD have been lower.
What you willingly pretend doesn't exist, is that the over $100 per month average AT&T is getting from their iPhone customers is pretty high, and will give them very good profitability over the life of the contracts. I'd like to know what Verizon is getting from their Storm customers, and how much they are paying RIM for it.
That's untrue. If they did, they would now have two SKU's, with the requirement of four models, with higher attendent costs, and lower profits.
They did the right thing. Verizon would have done them little good.
YOU say they could have caught up. But that's just you talking.
They do care, they just hadn't the chance at an affordable price before.
Don't forget the relationship between Verizon and Vodaphone. To ignore that is to ignore the realities.
Verizon also hasn't said that they expect to make so much more on the Storm over the next two years, as AT&T does with the iPhone.
With much less profit from the Storm, it would have been pretty stupid to pay out so much in the beginning. It is interesting though, that iSupply has found that the costs to build the Storm (in parts) significently exceeds that of the iPhone. Someone is paying for that. It's also very possiblr that Verizon is just not talking. Besides, they sold so many less Storms than did AT&T sell iPhones, that the costs to them SHOULD have been lower.
What you willingly pretend doesn't exist, is that the over $100 per month average AT&T is getting from their iPhone customers is pretty high, and will give them very good profitability over the life of the contracts. I'd like to know what Verizon is getting from their Storm customers, and how much they are paying RIM for it.
The Storm uses a $35 Qualcomm chip --- because it is a world phone chip that runs on GSM, CDMA and HSDPA. Don't need to manufacture a different CDMA model for the iphone.
I am not saying that Verizon alone would do a lot of good for Apple. I am saying that if Apple had decided to sign with Verizon in the first place --- on Verizon's terms (i.e. low retail price and zero revenue sharing) --- then we would be seeing 50 million iphones sold by now because other carriers around the world would have signed on 1 year earlier.
It's not that difficult for Verizon to sign a bunch of MVNO carriers to get a couple of millions of prepaid customers. Plus a couple of million of their own prepaid customers (if Verizon wanted to) --- Verizon would have tied AT&T's numbers.
I know Vodafone a major Verizon Wireless shareholder and can veto a major merger --- but so was Cingular at the time of the AT&T Wireless merger (Cingular was owned by SBC and BellSouth at the time).
What you willingly pretend doesn't exist, is that about 90% of Verizon customers are contract postpaid subscribers. It's the overall numbers that matters. For AT&T to pull in 750K iphone net new customers at $100 ARPU in Q4 2008 and pulling in 800K prepaid net new customers at $12 ARPU --- you are going to average out at $55. You make real money by targeting the middle class.
Comments
ATT has a slightly higher churn rate than Verizon, at the same time ATT is adding far more subscribers than it looses.
As ATT lead in subscribers only continues to grow, it doesn't matter if much of that comes from more pay as you go subscribers. Paying subscribers are paying subscribers.
40% of 7 million iphone activations were new AT&T customers. But AT&T also have higher churn rates, so more people are leaving AT&T than leaving Verizon.
The delta has always been about prepaid. It's been pretty much a tie in terms of pospaid net adds for the last few quarters now.
40% of 7 million iphone activations were new AT&T customers. But AT&T also have higher churn rates, so more people are leaving AT&T than leaving Verizon.
The delta has always been about prepaid. It's been pretty much a tie in terms of pospaid net adds for the last few quarters now.
If you read the article I provided, you would have seen that there is much less churn with iPhone purchasers, in addition to a much higher than average monthly subscription payment of over $100.
That's a very high value, and is why, new subscribers or not, AT&T is so interested in its iPhone subscribers.
...
And anyone could have bought Alltel, but it was Verizon that thought they needed them.
Mel, while true anyone could have bought Alltel, it seems to me the that for the economics to work it would have to be another CDMA carrier, thus Verizon or Sprint-Nextel and I'm not sure Sprint-Nextel can afford to buy anything.
Mel, while true anyone could have bought Alltel, it seems to me the that for the economics to work it would have to be another CDMA carrier, thus Verizon or Sprint-Nextel and I'm not sure Sprint-Nextel can afford to buy anything.
Of course it does. I was just pointing out that there was nothing special here about this purchase. Sprint needed them more than did Verizon.
I suspect that Verizon bought them because they are losing the sign-up race with AT&T (and they had the money, whereas Sprint did not), and it looked nasty. This brings them a small bit ahead for awhile.
If you read the article I provided, you would have seen that there is much less churn with iPhone purchasers, in addition to a much higher than average monthly subscription payment of over $100.
That's a very high value, and is why, new subscribers or not, AT&T is so interested in its iPhone subscribers.
AT&T is so interested in the high ARPU, long contract, less churning iphone customers because AT&T also concentrated on the low ARPU, prepaid and extremely high churning prepaid customers (Tracfone has like a $12 ARPU).
AT&T is like GM trying to sell high end Cadillac and cheap Chevrolet ---- meanwhile Verizon is selling the middle class Honda Accord.
AT&T only quoted their postpaid ARPU in their quarterly reports because Verizon has a higher overall ARPU than AT&T.
Of course it does. I was just pointing out that there was nothing special here about this purchase. Sprint needed them more than did Verizon.
I suspect that Verizon bought them because they are losing the sign-up race with AT&T (and they had the money, whereas Sprint did not), and it looked nasty. This brings them a small bit ahead for awhile.
Alltel was put up for sale the second time because the Private Equity firms that bought Alltel couldn't find financing. And Verizon managed to purchase Alltel at the same price as the Private Equity firms (yet Alltel has grown 10% larger).
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
As ATT lead in subscribers only continues to grow, it doesn't matter if much of that comes from more pay as you go subscribers. Paying subscribers are paying subscribers.
AT&T is trying to buy market share at the expense of profitibility. For a company with 5 million more wireless subscribers than Verizon Wireless, AT&T Wireless makes about $1 billion less per quarter.
You paint the picture as though Verizon is executing perfectly and everything is going well. While you paint AT&T as bumbling idiots who are lucky to still be in business.
I would say both have their strengths and weaknesses, both are making money hand over fist.
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
I think Samab the reason we keep debating is because you won't simply concede that both companies are doing well over all.
You paint the picture as though Verizon is executing perfectly and everything is going well. While you paint AT&T as bumbling idiots who are lucky to still be in business.
I would say both have their strengths and weaknesses, both are making money hand over fist.
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
That is so far away from the truth.
Of course Verizon is buying marketshare with Alltel. The same as Cingular bought marketshare when it merged with AT&T. In a business built on subscriber growth that is the purpose of mergers.
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
That is so far away from the truth.
I wouldn't call Verizon bumbling idiots. But they did make a mistake in turning down the iPhone. If for nothing else they allowed AT&T to have a killer product.
Of course Verizon is buying marketshare with Alltel. The same as Cingular bought marketshare when it merged with AT&T. In a business built on subscriber growth that is the purpose of mergers.
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ). History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
AT&T is trying to buy market share at the expense of profitibility. For a company with 5 million more wireless subscribers than Verizon Wireless, AT&T Wireless makes about $1 billion less per quarter.
Again the only way I can read this, everything Verizon does is right, everything ATT does (no matter how successful) is wrong.
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ). History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
Verizon allowed AT&T to buy market share by getting iphone at a unacceptable cost (according to VZ).
Which is why they may be subsidizing the BBS more than AT&T does the iPhone?
History has shown that Verizon is able to attract the same number of postpaid subscriber net adds from "second rate" copycats like the LG Voyager and Storm --- how is that a mistake. You make real money by targeting the middle class, not targeting the gadget geeks.
History has shown that Verizon was able to attract more postpaid subscribers than Cingular/AT&T on the basis of it's superior network (or at least perception thereof) prior to the iPhone. Mmm...seems like a mistake if there is parity now.
Verizon bought market share with the Alltel merger at a acceptable cost (without a bidding war against the private equity firms).
Alltel was 13M customers right? Personally, I think VZW purchased Alltel for the way their executive staff has managed innovation as much as for the hard assets of subscribers and towers. Alltel managed to push video usage faster than any of its big competitors and has a slew of interesting services.
But I have a suspicion that Verizon's corporate culture will simply smother Alltel's innovative culture despite any good intentions.
Frankly, if Verizon had the iPhone, regardless of "cost" (aka control), then Cingular/AT&T would have been sucking wind and Verizon completely dominant. It was a significant strategic error to give AT&T the window to grow. Whether that was really obvious or not is debatable but AT&T certainly grabbed on with both hands and ran the ball all the way down the field. It was pretty obvious to them that the iPhone was no ROKR.
What probably would have been a blowout is a real game. It's pretty hard to defend VZW's passing on the deal.
Amusingly, I have AT&T Wireless for my iPhone, FiOS for internet and Xohm for WiMAX connectivity.
AT&T is so interested in the high ARPU, long contract, less churning iphone customers because AT&T also concentrated on the low ARPU, prepaid and extremely high churning prepaid customers (Tracfone has like a $12 ARPU).
AT&T is like GM trying to sell high end Cadillac and cheap Chevrolet ---- meanwhile Verizon is selling the middle class Honda Accord.
AT&T only quoted their postpaid ARPU in their quarterly reports because Verizon has a higher overall ARPU than AT&T.
I understand what you're saying, but I really don't think this is an issue here.
We are talking about iPhone penetration.
Alltel was put up for sale the second time because the Private Equity firms that bought Alltel couldn't find financing. And Verizon managed to purchase Alltel at the same price as the Private Equity firms (yet Alltel has grown 10% larger).
Verizon bought Alltel because it was cheap, not because they were desperate.
Cingular bought AT&T Wireless (after winning a bidding war against Vodafone) --- they overpaid and they were desperate.
I didn't say they were desperate. But its a very good marketing tool to say that "we are the largest carrier". If their marketshare shrinks, and they become the second largest, people (the great unwashed public) think that something is wrong with them, and jump ship. This is happening to Sprint, even though they are much better than they were before. Customers are like rats.
This gives the back the prestige of being the biggest, for a while, at least.
Cingular wasn't desperate either, but they felt that they had to bulk up, and they did. AT&T was the one with the problems, as was Alltel.
I think it's the other way around --- that people in this forum thinks that Verizon was a bumbling idiot who refused to sell the iphone when Apple offered the iphone first to Verizon; now regrets it and Verizon is desperate to buy market share by mergering with Alltel.
That is so far away from the truth.
I don't think either of those statements are true.
but there is no doubt that Verizon is looking at the iPhone with some envy. They aren't the only ones.
This is pretty obvious. Otherwise, they wouldn't all be trying to have phones that directly compete. And it's costing Verizon plenty to do this. Don't think otherwise.
Most of those costs AT&T had this quarter weren't due to the iPhone up front payments, though a good portion were. They spelled it out in their statements.
My other arguments still stand, like it or not.
Verizon does not make a billion more than AT&T every quarter. Part of Verizon's succes is also attributable to it's broadband business, it's not all wireless.
No, I am talking about the wireless business alone. Just look at the SEC filings and they will give you the detailed numbers.
Soooo, AT&T has the best selling phone in the country.
For one or 2 quarters initially after the launch, iphone has been selling great. The LG Voyager outsold the first gen iphone in the US. The Storm is selling fairly well. My whole point is that a second rate copycat can do a decent job without Verizon paying a king's ransom and without Verizon issuing a profit warning.
History has shown that Verizon was able to attract more postpaid subscribers than Cingular/AT&T on the basis of it's superior network (or at least perception thereof) prior to the iPhone. Mmm...seems like a mistake if there is parity now.
Frankly, if Verizon had the iPhone, regardless of "cost" (aka control), then Cingular/AT&T would have been sucking wind and Verizon completely dominant. It was a significant strategic error to give AT&T the window to grow.
As a consumer, I think people would prefer Verizon to spend that huge iphone subsidy on network improvements.
It was a strategic error for Apple not to sign Verizon in the first place. If Apple gave up sooner on the idiotic high iphone retail price and idiotic revenue sharing idea (which they eventually did) ---- we would be talking about Apple selling the 50 millionth iphone right now.
I didn't say they were desperate. But its a very good marketing tool to say that "we are the largest carrier". If their marketshare shrinks, and they become the second largest, people (the great unwashed public) think that something is wrong with them, and jump ship.
Cingular wasn't desperate either, but they felt that they had to bulk up, and they did. AT&T was the one with the problems, as was Alltel.
Verizon has been number 2 for 4 years now --- and they could have EASILY overtaken AT&T by just selling more prepaid. Verizon didn't do it. So it has NOTHING to do with just "we are the largest carrier".
Cingular got into a bidding war against Vodafone for AT&T Wireless. Verizon didn't get into a bidding war against the private equity firms for Alltel. Whether or not you would call it desperate --- Cingular is closer to the desperation scale than Verizon.
but there is no doubt that Verizon is looking at the iPhone with some envy. They aren't the only ones.
This is pretty obvious. Otherwise, they wouldn't all be trying to have phones that directly compete. And it's costing Verizon plenty to do this. Don't think otherwise.
Verizon didn't issue a profit warning on the Storm subsidy vs. AT&T issuing a profit warning on the iphone subsidy. Verizon thinks that a second rate copycat that doesn't cost an arm and a leg is good enough to compete with AT&T.
It was a strategic error for Apple not to sign Verizon in the first place. If Apple gave up sooner on the idiotic high iphone retail price and idiotic revenue sharing idea (which they eventually did) ---- we would be talking about Apple selling the 50 millionth iphone right now.
That's untrue. If they did, they would now have two SKU's, with the requirement of four models, with higher attendent costs, and lower profits.
They did the right thing. Verizon would have done them little good.
Verizon has been number 2 for 4 years now --- and they could have EASILY overtaken AT&T by just selling more prepaid. Verizon didn't do it. So it has NOTHING to do with just "we are the largest carrier".
YOU say they could have caught up. But that's just you talking.
They do care, they just hadn't the chance at an affordable price before.
Cingular got into a bidding war against Vodafone for AT&T Wireless. Verizon didn't get into a bidding war against the private equity firms for Alltel. Whether or not you would call it desperate --- Cingular is closer to the desperation scale than Verizon.
Don't forget the relationship between Verizon and Vodaphone. To ignore that is to ignore the realities.
Verizon didn't issue a profit warning on the Storm subsidy vs. AT&T issuing a profit warning on the iphone subsidy. Verizon thinks that a second rate copycat that doesn't cost an arm and a leg is good enough to compete with AT&T.
Verizon also hasn't said that they expect to make so much more on the Storm over the next two years, as AT&T does with the iPhone.
With much less profit from the Storm, it would have been pretty stupid to pay out so much in the beginning. It is interesting though, that iSupply has found that the costs to build the Storm (in parts) significently exceeds that of the iPhone. Someone is paying for that. It's also very possiblr that Verizon is just not talking. Besides, they sold so many less Storms than did AT&T sell iPhones, that the costs to them SHOULD have been lower.
What you willingly pretend doesn't exist, is that the over $100 per month average AT&T is getting from their iPhone customers is pretty high, and will give them very good profitability over the life of the contracts. I'd like to know what Verizon is getting from their Storm customers, and how much they are paying RIM for it.
That's untrue. If they did, they would now have two SKU's, with the requirement of four models, with higher attendent costs, and lower profits.
They did the right thing. Verizon would have done them little good.
YOU say they could have caught up. But that's just you talking.
They do care, they just hadn't the chance at an affordable price before.
Don't forget the relationship between Verizon and Vodaphone. To ignore that is to ignore the realities.
Verizon also hasn't said that they expect to make so much more on the Storm over the next two years, as AT&T does with the iPhone.
With much less profit from the Storm, it would have been pretty stupid to pay out so much in the beginning. It is interesting though, that iSupply has found that the costs to build the Storm (in parts) significently exceeds that of the iPhone. Someone is paying for that. It's also very possiblr that Verizon is just not talking. Besides, they sold so many less Storms than did AT&T sell iPhones, that the costs to them SHOULD have been lower.
What you willingly pretend doesn't exist, is that the over $100 per month average AT&T is getting from their iPhone customers is pretty high, and will give them very good profitability over the life of the contracts. I'd like to know what Verizon is getting from their Storm customers, and how much they are paying RIM for it.
The Storm uses a $35 Qualcomm chip --- because it is a world phone chip that runs on GSM, CDMA and HSDPA. Don't need to manufacture a different CDMA model for the iphone.
I am not saying that Verizon alone would do a lot of good for Apple. I am saying that if Apple had decided to sign with Verizon in the first place --- on Verizon's terms (i.e. low retail price and zero revenue sharing) --- then we would be seeing 50 million iphones sold by now because other carriers around the world would have signed on 1 year earlier.
It's not that difficult for Verizon to sign a bunch of MVNO carriers to get a couple of millions of prepaid customers. Plus a couple of million of their own prepaid customers (if Verizon wanted to) --- Verizon would have tied AT&T's numbers.
I know Vodafone a major Verizon Wireless shareholder and can veto a major merger --- but so was Cingular at the time of the AT&T Wireless merger (Cingular was owned by SBC and BellSouth at the time).
What you willingly pretend doesn't exist, is that about 90% of Verizon customers are contract postpaid subscribers. It's the overall numbers that matters. For AT&T to pull in 750K iphone net new customers at $100 ARPU in Q4 2008 and pulling in 800K prepaid net new customers at $12 ARPU --- you are going to average out at $55. You make real money by targeting the middle class.