Apple's partnership with AT&T on eagerly-awaited iPhone devices set to ship next month promises to be an industry-changing blissful union or a history-making horrid divorce.
May 25, 2007 (Press Release) --
Apple's partnership with US telecom giant AT&T on eagerly-awaited iPhone devices set to ship next month promises to be an industry-changing blissful union or a history-making horrid divorce.
Industry insiders see AT&T as a clear winner from the union as Apple's iPod-driven cache' gives Internet-age youthfulness to a company as old as the telephone itself.
AT&T has already received more than a million inquiries about iPhones, according to Mark Siegel, a spokesman for the company's wireless business.
Interest in iPhones and Apple's historically deft marketing tactics will drive people to AT&T stores, where prices of 499 and 599 US dollars for iPhone models might result in customers opting for less expensive AT&T offerings.
"I am skeptical on price, but people are lined up to buy it," Jupiter Research analyst Neil Strother said of iPhones.
"The Apple nuts will buy it right off the bat. If you are with another carrier, that will hold you back. Buying a mobile telephone is a more complex decision than buying an MP3 player to listen to your music."
Whereever people buy iPhones, the US telecom company will be their service carrier thanks to an exclusive multi-year deal with Apple.
Neither company would reveal when the exclusivity expires, but it is believed to be five years or less.
Apple gets to learn the mobile industry from a veteran and keep tight control of the relationship between its iTunes online digital content store and iPhone handsets designed to innovatively handle calls, videos, music, and more.
"I think this partnership is going to redefine the mobile experience for people in the United States," Siegel said.
"It is one of these perfect marriages. We do wireless exceedingly well and Apple does a brilliant job of developing technology that is easy to use. This is a big opportunity for us. We get to attract new customers with the buzz."
A danger in the alliance is that Apple has a pattern of ending partnerships painfully for the other parties.
Apple's first venture into mobile telephones with Motorola's ROKR model and service by Cingular, which was recently taken over by AT&T, was abandoned by Apple almost as soon as it was unveiled.
"Apple has a history of leaving its partners bleeding or bloody in the dust," analyst Rob Enderle told AFP.
"You have the most power brand with the most powerful carrier. If it works out, you have a powerful partnership. But, this has all the earmarks of a really expensive divorce that will be historically memorable."
Pressure is on AT&T to offer iPhone service plans as innovative as the touch-screen operated device, said analyst Michael McGuire of Gartner Research.
AT&T's chief executive has promised as much, but Siegel declined to provide details on Wednesday.
"It will be interesting to see if the old telephone company can learn new tricks," McGuire told AFP.
"If AT&T and Apple create an experience that is markedly different, entertaining to consumers, resistance to the price and carrier exclusivity could melt away quickly. But that is a big 'If'."
Working with AT&T lets Apple tailor iPhones to the GSM mobile network that is common outside the United States, Strother said. The iPhone is to debut in Europe by the end of this year and in Asia in 2008.
The terms of its alliance with AT&T bar Apple from developing iPhones compatible with the CDMA wireless networks used by telecom competitors Sprint and Verizon Wireless.
"It lets Apple work with one carrier, find out what works and what doesn't and go from there," Strother said. "Apple doesn't have much experience in mobile phones. In some ways, Apple is out of its league."
Apple had a choice of venturing into the smart phone market or having its iPod players inevitably marginalized by more sophisticated mobile devices, according to Strother.
"There are a lot of non-iPod users out there today, but the vast majority of people have mobile telephones," Strother said. "Apple has to be wondering how to drive into the bigger market before its lunch gets eaten."
"AT&T is going to get a marketing bump, if not to die for, a very good one," Strother said. "It is a really cool experiment at its worst for AT&T."
AT&T, which stands to benefit either way, will measure the success of the Apple union by how many subscribers it gains due to iPhones. Fighting for customers is cutthroat in the mobile telephone arena.
Adding features is central to the competition and Apple's iPhone is billed as a smart phone holy grail.
AT&T boasts slightly more than 62 million mobile service subscribers, giving it slim leads over rivals Verizon and Sprint.
Verizon and Apple negotiated over an iPhone alliance but Apple reportedly wanted more control over pricing, distribution and other aspects than the carrier would yield.
Verizon claims to be readying a challenge the iPhone and contends triumph in the marketplace will hinge on the quality of the carriers not the devices.
Source: http://www.theage.com.au/
Industry insiders see AT&T as a clear winner from the union as Apple's iPod-driven cache' gives Internet-age youthfulness to a company as old as the telephone itself.
AT&T has already received more than a million inquiries about iPhones, according to Mark Siegel, a spokesman for the company's wireless business.
Interest in iPhones and Apple's historically deft marketing tactics will drive people to AT&T stores, where prices of 499 and 599 US dollars for iPhone models might result in customers opting for less expensive AT&T offerings.
"I am skeptical on price, but people are lined up to buy it," Jupiter Research analyst Neil Strother said of iPhones.
"The Apple nuts will buy it right off the bat. If you are with another carrier, that will hold you back. Buying a mobile telephone is a more complex decision than buying an MP3 player to listen to your music."
Whereever people buy iPhones, the US telecom company will be their service carrier thanks to an exclusive multi-year deal with Apple.
Neither company would reveal when the exclusivity expires, but it is believed to be five years or less.
Apple gets to learn the mobile industry from a veteran and keep tight control of the relationship between its iTunes online digital content store and iPhone handsets designed to innovatively handle calls, videos, music, and more.
"I think this partnership is going to redefine the mobile experience for people in the United States," Siegel said.
"It is one of these perfect marriages. We do wireless exceedingly well and Apple does a brilliant job of developing technology that is easy to use. This is a big opportunity for us. We get to attract new customers with the buzz."
A danger in the alliance is that Apple has a pattern of ending partnerships painfully for the other parties.
Apple's first venture into mobile telephones with Motorola's ROKR model and service by Cingular, which was recently taken over by AT&T, was abandoned by Apple almost as soon as it was unveiled.
"Apple has a history of leaving its partners bleeding or bloody in the dust," analyst Rob Enderle told AFP.
"You have the most power brand with the most powerful carrier. If it works out, you have a powerful partnership. But, this has all the earmarks of a really expensive divorce that will be historically memorable."
Pressure is on AT&T to offer iPhone service plans as innovative as the touch-screen operated device, said analyst Michael McGuire of Gartner Research.
AT&T's chief executive has promised as much, but Siegel declined to provide details on Wednesday.
"It will be interesting to see if the old telephone company can learn new tricks," McGuire told AFP.
"If AT&T and Apple create an experience that is markedly different, entertaining to consumers, resistance to the price and carrier exclusivity could melt away quickly. But that is a big 'If'."
Working with AT&T lets Apple tailor iPhones to the GSM mobile network that is common outside the United States, Strother said. The iPhone is to debut in Europe by the end of this year and in Asia in 2008.
The terms of its alliance with AT&T bar Apple from developing iPhones compatible with the CDMA wireless networks used by telecom competitors Sprint and Verizon Wireless.
"It lets Apple work with one carrier, find out what works and what doesn't and go from there," Strother said. "Apple doesn't have much experience in mobile phones. In some ways, Apple is out of its league."
Apple had a choice of venturing into the smart phone market or having its iPod players inevitably marginalized by more sophisticated mobile devices, according to Strother.
"There are a lot of non-iPod users out there today, but the vast majority of people have mobile telephones," Strother said. "Apple has to be wondering how to drive into the bigger market before its lunch gets eaten."
"AT&T is going to get a marketing bump, if not to die for, a very good one," Strother said. "It is a really cool experiment at its worst for AT&T."
AT&T, which stands to benefit either way, will measure the success of the Apple union by how many subscribers it gains due to iPhones. Fighting for customers is cutthroat in the mobile telephone arena.
Adding features is central to the competition and Apple's iPhone is billed as a smart phone holy grail.
AT&T boasts slightly more than 62 million mobile service subscribers, giving it slim leads over rivals Verizon and Sprint.
Verizon and Apple negotiated over an iPhone alliance but Apple reportedly wanted more control over pricing, distribution and other aspects than the carrier would yield.
Verizon claims to be readying a challenge the iPhone and contends triumph in the marketplace will hinge on the quality of the carriers not the devices.
Source: http://www.theage.com.au/
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