Charles Edison

"Economics, politics, and personalities are often inseparable." - Charles Edison

Wednesday, January 12, 2011

Verizon and The Iphone

On february 10, 2011 the Apple Iphone will be available for Verizon customers. This is huge in the cellular industry because previously the Iphone was only available on the AT&T network. This will change the amount of profit AT&T will recieve. They wont be recieving as many customers from other cellular network companies since they aren't the only company to be offering the Iphone.
Verizon signed the contract with Apple January 11, 2011. This could dramatically increase profit because the Iphone is such a popular phone. It was also a smart descion made by Apple to offer a contract with Verizon. Now Apple has the possiblity of drastically improving sales. This is possible because they arent' limited to just one network company anymore. They have opened another door that was previously closed in the Iphone section of Apple.


James said...

I'm not familiar with the details of the contract that AT&T and Apple had to be the exclusive company for the iphone. Could Apple actually lose money by including Verizon as an iphone carrier? Certainly AT&T will not pay Apple as much money now that Verizon is also authorized as an iphone carrier. Will the additional customers added through Verizon make up for this potential difference in revenue?

Matthew said...

This is a huge benefit to the consumer, now there is a choice. This choice does not just mean you can pick Verizon or AT&T, this choice means there is now competition for the IPhone and its contracts. This competition will cause the prices of these service plans to go down, have special sales and could even effect the cost of the phone itself. With Apple opening the IPhone up to Verizon without terminating the AT&T contract it is a win, win, win, loss for the world. A win for the consumer because they have a choice, a win for Verizon because their companies profit will rise, and Apple because more people will buy the popular IPhone. Lastly you have the loss for AT&T, but loosing exclusive rights to legal IPhone contracts they will suffer a loss in profits on new contracts, yet it will not be an instant crash. With people currently in two year or longer contracts with AT&T the chances that they will spend that cancelation fee to end the contract just to get the same service with a different company is unlikely. The major thing this move to having two carriers for the IPhone will do is split the new customers and slowly over the long term split the existing. For now I see not a drop in profits for AT&T but them leveling out.

taylor said...

Iphones are everyone, atleast at the Oakridge school, but were considered a scarce resource because they could only be sold to AT&T owners. I know many people that have switched to AT&T just to have an Iphone so this company has already increased their revenue. As for Apple, they will increase their revenue as well as Verizon. I do not see AT&T obtaining a large decrease in their revenue because they're constantly coming out with new phones that appeal to the people's eye. I believe people will not go back to Verizon once they have already switched to AT&T, therefore, AT&T will only lose the business they could have recieved from the people switching from Verizon or other businesses.

Alison said...

I think initially Verizon will see an increase in revenue because of the iPhone. AT&T may have the iPhone, but its reputation has degenerated a bit since it became the phone's exclusive carrier. The huge influx of iPhone users has slowed down AT&T's network significantly and more people are complaining of no signal, bad connection, dropped calls, etc. (This is more people with iPhones. Those who don't have them don't have as many problems.) People will be looking for someone with the phone but without those problems, and they may choose Verizon for that reason. Some may not consider, however, that Verizon's network may not be prepared for the upcoming increase of data usage and may suffer the same problems as AT&T.
Verizon's acquisition of the iPhone will definitely dramatically increase competition between Verizon and AT&T. Verizon has the Droid and a lot of the 'better' Blackberries, so AT&T is going to have to promote more phones instead of just relying on the iPhone. Also, because the two carriers have two different types of networks, customers will develop a preference in that area as well. So I think Verizon will probably see an initial increase in profit, but the two will probably level out as time goes on.

Easton said...

I myself recently bought a new phone on the Verizon network and I love it. The phone is a droid x that is only offered by Verizon. It is one of a line up of phones that are part of the android family, which is a direct competitor to the iPhone. It has the same capabilities as the iPhone but with a different operating system. It includes support for the flash media player that the iPhone does not. My question is if the iPhone will sell itself based on its name, or if it will have competition within the Verizon family of phones. In other words, will the iPhone still sell on Verizon?