Analyst: iPhone secure against competitors, AT&T not so much

August 31, 2009 | Anthony Ha | Comments | |

apple_crown2As Palm, Google, and others roll out their smartphone platforms, you might think Apple should be worried about keeping the momentum going on its iPhone. Not so, says Piper Jaffray analyst Gene Munster in a note sent out earlier today — the competition just drives more people to Apple.

Noting strong sales of the Apple’s latest model, the iPhone 3G S, Munster writes:

The smart phone industry has effectively crowned the iPhone and its App Store the gold standard among touchscreen mobile experiences, and competitors are trying to copy the device and its software. In doing so, the iPhone’s competitors are actually promoting the iPhone …

He then goes on to compare the dynamic between the iPhone and its competitors to that between the iPod and competing music players in 2004. In other words, the iPhone is the touchscreen smartphone at the top of public awareness (even if its actual marketshare isn’t quite so impressive), so as tech companies bring more and more attention to the smartphone market, Apple benefits. The comparison would have been even more perfect if Microsoft had actually released the rumored Zune phone ….

Of course, analysts have whiffed on Apple before, particularly when it comes to guessing what the company will do next (remember when everyone was predicting the launch of an iPhone nano?). The market prediction may be relatively solid, since it’s based on existing trends, but Munster is probably getting more speculative when he talks about Apple’s deal where all iPhone users in the United States must sign up with AT&T:

We believe Apple is slowly transitioning each country into which they sell the iPhone to a multi-carrier model. In other words, we expect Apple to add new iPhone carriers in the U.S. within the next year (likely with a new product launch next summer).

After all, Munster adds, Apple has already moved to a multi-carrier model in France. Plus, there’s no denying growing anti-AT&T sentiment, which was palpable at Apple’s last Worldwide Developers Conference in June. In fact, the Wall Street Journal just published an article wondering if the strain that the iPhone has put on AT&T’s network has done more damage to the carrier’s reputation than the iPhone exclusive was worth.

All I can say is that the timing would work out pretty well for me, since my AT&T contract ends next summer, and I’d be awfully tempted to switch to Verizon …

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About the Author, Anthony Ha

Anthony is VentureBeat's assistant editor, as well as its reporter on enterprise technology, cloud computing, and tech policy. Before joining VentureBeat in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. You can also follow Anthony on Twitter.

  • do you think sprint would get the iphone ?
  • GuestComment
    Don't underestimate Android. Fact is, Apple overcharges. Expect pushback.
  • Jon
    While I agree they overcharge on their computer offerings, I belive their phones have been reasonably priced (compare to the $600 nokia N97).
  • dilipramachandran
    Gene Munster is an AAPL analyst. I think he is biased as he spends most of the time with them. The iPhone is doing very well in the US smartphone market but there is a world outside the US where it is in the shadow of other products.

    There are some really great pieces of equipment out there. For the moment let's put aside a detailed tech comparison and just look at price. It is a matter of time until other manufacturers get subsidies from operators as you can see with the Pre, Touch Pro 2, Magic, Hero etc..
    I don't disagree that is is a very easy and well designed product.

    32GB iPhone 3G|S = $299 w/ 24 month contract
    32 GB Nokia N97 = $599 unlocked

    You need to include the cost of the contract to really gauge the difference in price especially as it is on the AT&T network. With AT&T, with the congestion of 3G, 2G is as good as 3G. With the iPhone you're forced to get a data plan that for me sets me $15 more per month, and that for 24 months is $360. And I'm not even accounting the flexibility of switching carriers whenever I want or even use the phone outside the US without worrying about trying to unlock it.

    So if you do the math, the iPhone is not really cheaper. Like the computer offerings, once you buy into Apple, you get locked in and get charged for lot more than you thought.
  • Personally I hope the IPhone moves to the competition just to shut up all the AT&T haters. Yes AT&T has its share of problems, but a Verizon, Sprint, or T-Mobile IPhone is not the promised land everyone thinks it will be.
  • Randy
    I have the Iphone 3g and live in Oakland CA. The Iphone is great, and other companies know this and seek to copy everything about it. Unfortunatly ATand T is not so good. Often the 3g has signal but does not work. Especially in big city or crowded areas, AT and T simply doesnt care to provide enough service for the demand. There was a Telecommunication confrence, one where cell phone companies advertise, and people could not make a call on their AT and T phones. Talk about embarassment. The last couple days of the show they scrambled to add new service to the area. Typical AT and T. I hope apple signs with Verizon, they know how to provide service.
  • cartoonasaur
    I've used 'em all - they all drop calls, they all have areas with little or no coverage, and especially, they all lie right to your face and have horrific customer service.... They are all the devil. But one thing about the devil - there's no escaping him! LOL
  • Mike Mike
    Gene Munster is a complete douche...I have gotten so sick of the hype bastard, I just can't deal anymore. This is the guy that tells you a tablet is coming out really soon on Verizon...this is the guy that tells you that Apple will have AppleTV with a 50 inch scree and its own apps, not television stations as its backbone. This dude is paid by Piper Jaffray to make money for Piper Jaffray, never mind the facts, let him suggest anything he wants. I doubt this guy owns any AT&T stock, due to his love affair for Verizon, but bias on Wall Street will live far longer than I will, so I'm probably best served saying this: Someday, I guarantee it, the iPhone will be on another carrier...impressive, aren't I?

    MM
  • ATT has only one problem regarding the iPhone and that being it hasn't turned on MMS. I have friends on other carriers, like Verizon and Sprint, that are seriously debating changing to ATT for better service. Whenever a big product becomes popular everyone wants it on their carrier. Verizon and Sprint fail to ATT, I live in NYC and get service in buildings that people with other carriers can't.
  • Mike Mike
    I hope apple signs with Verizon, they know how to provide service.

    Ha Ha!

    Look, they have a decent calling network (as long as you don't ever talk at the same time, but come on, their data network (3G, for a long time now) sucks. Their speeds are not good, not consistent, their devices are crippled, they allow for zero outside influence, Verizon has serious issue in letting anyone have any control of their control. Apple will want this, Apple will not play with Verizon without a huge check up front, believe it or not, Apple doesn't need Verizon.

    Look, Apple has less than 15% of the computer market, you know, what they are known for along with iPod and now the iPhone, but Apple has done really well at not being in first place. The people that are clamoring for this device, the iPhone that is, are the same people that can cross the street and get one now at their local AT&T store...it's the same thing if the LG Chocolate was the "mind bending experience" and people from AT&T wanted it, but Verizon owned the exclusivity agreement. Look, if you want it, cross the street and get it. AT&T in San Francisco and New York is where the majority of the criticism comes from, look, Verizon is huge in these areas, so be it...Verizon turned down a winner due to not wanting to give any control to Apple, do not be surprised if they turn it down again if the money ain't right and the terms aren't right.

    Verizon is as bad at customer relations as Sprint, but the problem is people don't get bumped from the network every five seconds like Sprint...but Verizon first instituted these lovely practices that all our lovely telecom companies follow now:
    1. If you have a data device, you must have a data plan (around November 2008)
    2. 5GB cap on data cards (around January 2008)
    3. Making you sign a contract even if you bring in your own device (just happened to an acquaintence, again even though they told us they wouldn't be doing this as of Jaunary 2008)

    Look, I don't know why people love Verizon, but they do...it has something to do with pride and little to do with Verizon's service (customer service that is)
  • nmtechs
    I have been with Verizon for over 3 years now. Their customer service has been a headache at times (like when I purchased a Wifi card and was assured that it would "work all-over Manhattan", and then got resistance when I tried to return it within the allotted time, but I have stuck with them.

    However, a few months ago I was almost tempted to change to AT&T when I tried out the new 3G. If Verizon gets rights to the 4G I will definitely be one of the ones waiting on the long lines when they arrive!
  • Personally I hope the IPhone moves to the competition just to shut up all the AT&T haters. Apple have reliable technology then others. I love apple.