No. But the WSJ feels otherwise.  Their arguments:

  • The iPhone used to generate 40% new users for AT&T in 2007.  Now that has dropped "all the way down" to 35%.  No other Smartphone brings over a third of their customers from another network or anything close to that.  What is a good number for the WSJ?  90%?
  • The iPhone generates about $2000 in revenue per customer over the two years of the contract if you deduct the estimated $400 subsidy.  There are 9 million iPhones on AT&T’s network.  That is $18 Billion in revenue.  Not too shabby.
  • The heavy iPhone network usage has caused harm to AT&T’s reputation.  It has and rightly so.  Perhaps if AT&T used some of that revenue above to build out its network in a timely manner (it has been two years), iPhone users wouldn’t feel so short – changed.  For $100/month you should be able to make a 5 minute call without getting dropped.
  • When Verizon gets the iPhone, a lot of customers will defect – therefore Apple is the only beneficiary.  True, but AT&T has had every opportunity to keep their customers.  They have done a poor job.

The facts that the Journal give as rationale for the iPhone being a bad deal for AT&T could easily be made into a good deal proposition for AT&T.  Do you think any other carrier would like a chance to carry the iPhone?


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