AT&T says they sold 200,000 iPhone in 12 hours

Professor

AT&T says they sold 200,000 iPhone in 12 hours

http://www.msnbc.msn.com/id/44824945/ns/technology_and_science-wireless/#.TpA-s0-RDoA

 

I'm a little surprised considering they didn't allow early upgrades as in the past, so fewer people were eligible for the lowest price.

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Teacher

Re: AT&T says they sold 200,000 iPhone in 12 hours

 That it a pretty impressive number for just 12 hours of work but I really don't see a lot more people jumping on the band wagon that already have the iphone 4. If your not eligible for an upgrade would buying a beefed up iphone 4 worth the money?

 I've looked over at the Sprint website to see what their customers are saying about the iphone and their a lot of unhappy people over there who say Sprint is doing them wrong on the pricing and not letting anyone upgrade early as they use too. Sounds like At&t and Verizon are going to be getting some more customers.Smiley Happy

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Teacher

Re: AT&T says they sold 200,000 iPhone in 12 hours


21stNow wrote:

But, 200,000 isn't a lot out of 94 million customers or 18 million current iPhone users.  That's 1% of current iPhone users that pre-ordered.


I agree that it is not a lot. I remember reading after pre-ordering the IP4 that in just one day 600,000 IP4 phones were ordered.

 

That stiff non negotiable $250 fee may have something to do with it.

 

 

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


hpsb wrote:
I agree that it is not a lot. I remember reading after pre-ordering the IP4 that in just one day 600,000 IP4 phones were ordered.

 

That stiff non negotiable $250 fee may have something to do with it.

 

 


As you would expect. The IP4 preorders were jammed with people who essentially got let out of their existing contracts for free with regard to the remaining term. AT&T lost the remaining recoupment on every early IP4 adopter's contract it allowed to upgrade.

 

It did that at the time because it made a business decision that writing off all that money on those contracts was worth what it got in return: all those folks were then locked into new two year contracts, with newly reset upgrade periods and ETF's, which served as a nice incentive for them not to jump ship for Verizon when it launched its iPhone. Had AT&T not allowed the early upgrades, those folks would have largely been completing their existing contracts around the same time that Verizon offered them an alternative.

 

It made sense for AT&T to do it then. It doesn't make sense for AT&T to do it again. It was a one-time thing that folks, for reasons passing understanding beyond greed, now believe themselves to be entitled to in perpetuity. Good luck with that one.

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Teacher

Re: AT&T says they sold 200,000 iPhone in 12 hours


dww0311 wrote
It did that at the time because it made a business decision that writing off all that money on those contracts was worth what it got in return: all those folks were then locked into new two year contracts, with newly reset upgrade periods and ETF's, which served as a nice incentive for them not to jump ship for Verizon when it launched its iPhone.

Great reasoning! This reason absolutely does not apply this time. Right ....

 

Smiley Happy

 

Message 19 of 43 (279 Views)
Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


hpsb wrote:

dww0311 wrote
It did that at the time because it made a business decision that writing off all that money on those contracts was worth what it got in return: all those folks were then locked into new two year contracts, with newly reset upgrade periods and ETF's, which served as a nice incentive for them not to jump ship for Verizon when it launched its iPhone.

Great reasoning! This reason absolutely does not apply this time. Right ....

 

Smiley Happy

 


You're correct. It doesn't apply this time. What those folks will experience with Verizon, and what their contracts terms will look like, is a known entity now. Verizon no longer offers unlimited data for new subscribers. There are no surprises. What would have been an emotional decision back then is a business decision now.

 

Essentially, AT&T has bent over backwards for several years and treated its iPhone customers differently (i.e. better) than it treats its other customers and better than the other carriers treat theirs.

 

It no longer has a reason to do that, and you're essentially whining that you want to continue being special. Welcome to reality.

Message 20 of 43 (273 Views)
Professor

Re: AT&T says they sold 200,000 iPhone in 12 hours

While I don't agree with most of the reasoning as to why AT&T did it in the past and not now, I do think that AT&T wanted to start as many smartphone contracts as they could last year.  I think that the higher ETFs went into effect in 2010, the $325 for a smartphone.  So if you had a 2009 contract, your ETF was only $175 (?).  If AT&T could get you to restart your contract for an iPhone 4, they could get you for the higher ETF.

 

Eh, now that I think about it, I don't think that that makes much sense, either.  I don't think that ETFs are budgeted to be a significant amount of revenue, so it wouldn't drive business decisions in that way.  I give up on trying to figure out AT&T's reasoning!

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


21stNow wrote:

While I don't agree with most of the reasoning as to why AT&T did it in the past and not now, I do think that AT&T wanted to start as many smartphone contracts as they could last year.  I think that the higher ETFs went into effect in 2010, the $325 for a smartphone.  So if you had a 2009 contract, your ETF was only $175 (?).  If AT&T could get you to restart your contract for an iPhone 4, they could get you for the higher ETF.

 

Eh, now that I think about it, I don't think that that makes much sense, either.  I don't think that ETFs are budgeted to be a significant amount of revenue, so it wouldn't drive business decisions in that way.  I give up on trying to figure out AT&T's reasoning!


 

 

It realistically boils down to (IMO):

 

AT&T knows ahead of time that Verizon is getting iPhone, and probably knows (or can pretty accurately estimate) about when that will be launched.

 

AT&T also knows that its then current 3GS customers largely have contracts that will expire around or shortly (a few months) before that launch.

 

AT&T sees potential to lose many of those customers, as they will no longer be locked into contracts and can leave or stay at their leisure. AT&T wonders how to mitigate this risk.

 

AT&T decides that allowing those folks to upgrade to iPhone 4's early, thereby locking them into new contracts , is worth the cost of writing off the unrecouped subsidies it gave them to facilitate the purchase of their 3GS'es. It ups the ETF for good measure just to make sure that customers stay instead of leaving. Bear in mind that the ETF is prorated as well. The longer you stay, the lower it goes. 

 

Honestly, the early upgrades for the 4, IMO, were intended to deny customers to Verizon. The folks that accepted them didn't think ahead about the ramifications of accepting an upgrade halfway through the product's life cycle (specifically, where they would be in their contracts and upgrade periods when the next shiny new iPhone came out.)

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Professor

Re: AT&T says they sold 200,000 iPhone in 12 hours

[ Edited ]

But, what you are saying is why it doesn't make as much sense to me.  If AT&T were that concerned over customers leaving to go to VZW for the iPhone when that iPhone didn't exist at that time, why wouldn't they be concerned now that the iPhone on VZW exists?  It also exists on Sprint, which people think of as having lower prices for monthly service. 

 

I don't get why AT&T would take these actions for a possible competitior's iPhone, when they won't take the actions for a real competitor's iPhone.  Since AT&T had also done this in the past years, I don't think that AT&T was trying to stop people from defecting those years, too.

 

It may be that allowing early full upgrades could be seen as "anti-competitive" by the DOJ, [Per Guidelines:  Keep it Relevant and Appropriate].  This is one other major difference between this year and previous years.  AT&T brought themselves in line with what the other competitors are doing so that it doesn't seem like they are the bully of the cellular industry.  However, that could be interpreted as oligopolistic behavior, and that wouldn't be good, either.  Like I said, I will give up on trying to figure out AT&T's reasoning.

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours

[ Edited ]

21stNow wrote:

But, what you are saying is why it doesn't make as much sense to me.  If AT&T were that concerned over customers leaving to go to VZW for the iPhone when that iPhone didn't exist at that time, why wouldn't they be concerned now that the iPhone on VZW exists?  It also exists on Sprint, which people think of as having lower prices for monthly service. 

 

I don't get why AT&T would take these actions for a possible competitior's iPhone, when they won't take the actions for a real competitor's iPhone.  Since AT&T had also done this in the past years, I don't think that AT&T was trying to stop people from defecting those years, too.

 

It may be that allowing early full upgrades could be seen as "anti-competitive" by the DOJ, [Per Guidelines:  Keep it Relevant and Appropriate].  This is one other major difference between this year and previous years.  AT&T brought themselves in line with what the other competitors are doing so that it doesn't seem like they are the bully of the cellular industry.  However, that could be interpreted as oligopolistic behavior, and that wouldn't be good, either.  Like I said, I will give up on trying to figure out AT&T's reasoning.


We're talking about the iPhone 4, not the 4S. When it was launched in June, 2010, AT&T knew that its exclusivity clause was set to expire at the end of 2010. It also knew that there was no way that Apple was going to continue to sell the device to only one carrier when it had a wide open untapped market for the phones on other carriers. AT&T attempted to convince Apple to agree to extend the exclusivity period through 2011, and Apple refused, so AT&T then had a reasonable, indeed an overwhelming, basis for expecting that Apple would release a competing iPhone on another carrier, most likely Verizon, shortly after AT&T's exclusivity deal expired. It also knew beyond a shadow of a doubt that this knowledge would become public at some point long before the launch actually took place.

 

Faced with this knowledge, AT&T assessed strategies for mitigating the risk that its current 3GS customers, who largely had contracts which expired between June and December of 2011 and ETF's that began at $175 and were prorating downward with every month that passed, would choose to jump ship. Remember at that time that AT&T was experiencing horrible network problems, from dropped calls to slow data response, etc., so those customers, when they became aware that there was going to be an alternative, would wonder whether switching to Verizon was in their best interest.

 

The option they came up with was letting 3GS folks upgrade early. What AT&T got in return was new contracts with stiff ETF fees that would serve to convince those customers that switching to Verizon didn't make economic sense for them.

 

And it largely worked, IMO. Verizon's iPhone launch was, by contemporary standards, a flop, precisely because the rich well of AT&T iPhone customers that might otherwise have jumped ship were constrained by new contracts which made it too expensive for them.

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Professor

Re: AT&T says they sold 200,000 iPhone in 12 hours


dww0311 wrote:

21stNow wrote:

But, what you are saying is why it doesn't make as much sense to me.  If AT&T were that concerned over customers leaving to go to VZW for the iPhone when that iPhone didn't exist at that time, why wouldn't they be concerned now that the iPhone on VZW exists?  It also exists on Sprint, which people think of as having lower prices for monthly service. 

 

I don't get why AT&T would take these actions for a possible competitior's iPhone, when they won't take the actions for a real competitor's iPhone.  Since AT&T had also done this in the past years, I don't think that AT&T was trying to stop people from defecting those years, too.

 

It may be that allowing early full upgrades could be seen as "anti-competitive" by the DOJ, [Per Guidelines:  Keep it Relevant and Appropriate].  This is one other major difference between this year and previous years.  AT&T brought themselves in line with what the other competitors are doing so that it doesn't seem like they are the bully of the cellular industry.  However, that could be interpreted as oligopolistic behavior, and that wouldn't be good, either.  Like I said, I will give up on trying to figure out AT&T's reasoning.


We're talking about the iPhone 4, not the 4S. When it was launched in June, 2010, AT&T knew that its exclusivity clause was set to expire at the end of 2010. It also knew that there was no way that Apple was going to continue to sell the device to only one carrier when it had a wide open untapped market for the phones on other carriers. AT&T attempted to convince Apple to agree to extend the exclusivity period through 2011, and Apple refused, so AT&T then had a reasonable, indeed an overwhelming, basis for expecting that Apple would release a competing iPhone on another carrier, most likely Verizon, shortly after AT&T's exclusivity deal expired. It also knew beyond a shadow of a doubt that this knowledge would become public at some point long before the launch actually took place.

 

Faced with this knowledge, AT&T assessed strategies for mitigating the risk that its current 3GS customers, who largely had contracts which expired between June and December of 2011 and ETF's that began at $175 and were prorating downward with every month that passed, would choose to jump ship. Remember at that time that AT&T was experiencing horrible network problems, from dropped calls to slow data response, etc., so those customers, when they became aware that there was going to be an alternative, would wonder whether switching to Verizon was in their best interest.

 

The option they came up with was letting 3GS folks upgrade early. What AT&T got in return was new contracts with stiff ETF fees that would serve to convince those customers that switching to Verizon didn't make economic sense for them.

 

And it largely worked, IMO. Verizon's iPhone launch was, by contemporary standards, a flop, precisely because the rich well of AT&T iPhone customers that might otherwise have jumped ship were constrained by new contracts which made it too expensive for them.


Dww0311 is absolutely right, this is just what happened... All the while att had the sole contract for Iphones, the Iphone customers were their primary concern, leaving most of the other customers as lower priority when it came to bad service as described in dww0311's post.  OF course, the dropped calls, etc also effected these iphone users too, but, att was frantically working to appease the apple arena first... (almost as if they were restructuring the network around the iphone).

 

Then when, like dww0311 said, apple discontinued the sole carrier contract and opened up to verizon,.. ahead of release, ATT started makeing sweet deals, working on network issues and so on to make it more feasible for customes to stay on. 

 

I can see the trend again, when theres no 'competition' , theres no need to "hear" the customers or do things to make the customer feel appreciated in a sense.   Only when there is a threat of losing customes does some ramp-ups occur.

 

I am not complaining about my services or device, but its not hard to see how things been functioning over the years.

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


dww0311 wrote:

Faced with this knowledge, AT&T assessed strategies for mitigating the risk that its current 3GS customers, who largely had contracts which expired between June and December of 2011 and ETF's that began at $175 and were prorating downward with every month that passed, would choose to jump ship.


Exactly. Besides, the iPhone most likely receives higher subsidy than the original $175 ETF.

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


hnzw_rui wrote:

dww0311 wrote:

Faced with this knowledge, AT&T assessed strategies for mitigating the risk that its current 3GS customers, who largely had contracts which expired between June and December of 2011 and ETF's that began at $175 and were prorating downward with every month that passed, would choose to jump ship.


Exactly. Besides, the iPhone most likely receives higher subsidy than the original $175 ETF.


They did. AT&T could realistically set the ETF lower on those accounts back in the day because it was the only vendor on the block at the time that had iPhones. It knew that the emotional draw of having the phone would be a much more powerful incentive to remain with AT&T than the threat of having to pay an exorbitant fee to leave would be.

 

Now that exclusivity is gone, AT&T is setting the ETF at a price which does serve to motivate people to remain.

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Professor

Re: AT&T says they sold 200,000 iPhone in 12 hours


dww0311 wrote:

21stNow wrote:

But, what you are saying is why it doesn't make as much sense to me.  If AT&T were that concerned over customers leaving to go to VZW for the iPhone when that iPhone didn't exist at that time, why wouldn't they be concerned now that the iPhone on VZW exists?  It also exists on Sprint, which people think of as having lower prices for monthly service. 

 

I don't get why AT&T would take these actions for a possible competitior's iPhone, when they won't take the actions for a real competitor's iPhone.  Since AT&T had also done this in the past years, I don't think that AT&T was trying to stop people from defecting those years, too.

 

It may be that allowing early full upgrades could be seen as "anti-competitive" by the DOJ, [Per Guidelines:  Keep it Relevant and Appropriate].  This is one other major difference between this year and previous years.  AT&T brought themselves in line with what the other competitors are doing so that it doesn't seem like they are the bully of the cellular industry.  However, that could be interpreted as oligopolistic behavior, and that wouldn't be good, either.  Like I said, I will give up on trying to figure out AT&T's reasoning.


We're talking about the iPhone 4, not the 4S. When it was launched in June, 2010, AT&T knew that its exclusivity clause was set to expire at the end of 2010. It also knew that there was no way that Apple was going to continue to sell the device to only one carrier when it had a wide open untapped market for the phones on other carriers. AT&T attempted to convince Apple to agree to extend the exclusivity period through 2011, and Apple refused, so AT&T then had a reasonable, indeed an overwhelming, basis for expecting that Apple would release a competing iPhone on another carrier, most likely Verizon, shortly after AT&T's exclusivity deal expired. It also knew beyond a shadow of a doubt that this knowledge would become public at some point long before the launch actually took place.

 

Faced with this knowledge, AT&T assessed strategies for mitigating the risk that its current 3GS customers, who largely had contracts which expired between June and December of 2011 and ETF's that began at $175 and were prorating downward with every month that passed, would choose to jump ship. Remember at that time that AT&T was experiencing horrible network problems, from dropped calls to slow data response, etc., so those customers, when they became aware that there was going to be an alternative, would wonder whether switching to Verizon was in their best interest.

 

The option they came up with was letting 3GS folks upgrade early. What AT&T got in return was new contracts with stiff ETF fees that would serve to convince those customers that switching to Verizon didn't make economic sense for them.

 

And it largely worked, IMO. Verizon's iPhone launch was, by contemporary standards, a flop, precisely because the rich well of AT&T iPhone customers that might otherwise have jumped ship were constrained by new contracts which made it too expensive for them.


I was referring to the launch of the iPhone 4, as well.

 

Now, iPhone 4 contracts will expire and AT&T didn't allow for the mass early full upgrades, so contracts will not be "extended" today.  When the iPhone 4 users' contracts expire, those users now have a choice of two carriers to jump to.  I don't see how it makes sense for AT&T to not want to hold these people longer, if that were their reasoning in the past.  Don't get me wrong; I'm not saying that AT&T should have allowed for early full upgrades.  I'm just saying that I don't understand their reasoning now, versus the past.

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Scholar

Re: AT&T says they sold 200,000 iPhone in 12 hours


RicoLX wrote:

Then when, like dww0311 said, apple discontinued the sole carrier contract and opened up to verizon,.. ahead of release, ATT started makeing sweet deals, working on network issues and so on to make it more feasible for customes to stay on. 

 

I can see the trend again, when theres no 'competition' , theres no need to "hear" the customers or do things to make the customer feel appreciated in a sense.   Only when there is a threat of losing customes does some ramp-ups occur.

 

I am not complaining about my services or device, but its not hard to see how things been functioning over the years.


Alas, that's true in practically every business. Monopolies rarely benefit the consumer. Phone exclusivity deals suck. I'd be much happier if they spent the money on improving service (better coverage, faster speed, lower rates) than with phone subsidies.

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Teacher

Re: AT&T says they sold 200,000 iPhone in 12 hours


dww0311 wrote:

hpsb wrote:

dww0311 wrote
It did that at the time because it made a business decision that writing off all that money on those contracts was worth what it got in return: all those folks were then locked into new two year contracts, with newly reset upgrade periods and ETF's, which served as a nice incentive for them not to jump ship for Verizon when it launched its iPhone.

Great reasoning! This reason absolutely does not apply this time. Right ....

 

Smiley Happy

 


You're correct. It doesn't apply this time. What those folks will experience with Verizon, and what their contracts terms will look like, is a known entity now. Verizon no longer offers unlimited data for new subscribers. There are no surprises. What would have been an emotional decision back then is a business decision now.

 

Essentially, AT&T has bent over backwards for several years and treated its iPhone customers differently (i.e. better) than it treats its other customers and better than the other carriers treat theirs.

 

It no longer has a reason to do that, and you're essentially whining that you want to continue being special. Welcome to reality.


Yep - bend the argument every way when it suits your point of view.

 

VZ contracts have always been known and so are ATTs and so are Sprints. ATT and VZ - tgether - removed unlimited plans. No surprises there either. Sure some may stick it out with ATT due to grandfathered plans - but it is not a show stopper.

 

As for whining - why are you whining FOR ATT ???

 

ATT will lose big time on this one IMO - welcome to that reality - and stop defending this losing position.

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