In just a few days, the iPhone will arrive, for the first time, on Verizon and will mark an end to a three and a half year exclusivity agreement between Apple and AT&T. During that time, AT&T experienced a number of well-publicized growing pains as the company struggled to keep up with the voracious appetite of iPhone users for data. Over time, AT&T did make marked improvements to its network, but with Verizon largely considered to have the best network in the US, some are expecting a mass of users to defect from AT&T to Verizon.
But just how significant is the potential for a mass migration from AT&T?
Well, not as significant as you might think.
Ahead of the iPhone 4 launch this Summer, AT&T began offering iPhone users accelerated upgrade eligibility wherein any iPhone owner eligible for an upgrade at any point in 2010 was allowed to purchase the iPhone 4 at subsidized prices. In doing so, AT&T was able to lock in these early upgraders into brand new 2-year contracts thus mitigating the chance that they’d jump ship for Verizon months down the road.
Further, AT&T confirmed to John Paczkowski of All Things D that 90% of AT&T iPhone users are still under contract. That being the case, Susquehanna analyst Jeffrey Fidacaro anticipates that Verizon, at the most, will steal away 2 million AT&T customers.
But some statistical data tells a different story.
A recent Changewave survey found that 15% of AT&T customers indicated that they were likely to switch carriers within a 90 day period.
Even more worrisome for AT&T is that the percentage of their user-base planning to switch to another carrier within a 90-day period continues to rise and has more than doubled since June of 2010. When specifically asked why they wanted to leave AT&T, 42% of respondents cited poor reception as the impetus for their decision while 27% cited dropped calls. As such, the lure of Verizon for some users may simply outweigh anything AT&T can do to entice them to stay. Moreover, cities with some of the worst coverage like San Francisco have laws that make erecting new towers a cumbersome process than can often take years to actualize.
Lastly, and getting right to the point, Changewave asked respondent currently signed with AT&T if they’d move to Verizon if a CDMA iPhone were to be announced (this was conducted prior to the Verizon iPhone announcement). 16% of those polled indicated that they would switch over to Verizon while 23% said that they weren’t sure.
This of course doesn’t bode well for AT&T and we’ll find out soon enough just how many iPhone users on AT&T take the Verizon plunge.
February 1st, 2011 at 11:23 am
Unless AT&T massively pisses me off, I won’t be moving to Verizon. When I found out that I can’t talk on the phone, and use data service, that was the deal breaker for me. I have ran into a lot of people who want to switch to Verizon, but most of them are totally unaware of this limitation. When they find out, they start rethinking the idea of switching.
February 1st, 2011 at 11:59 am
Well, this is interesting, but mainly to ATT & Verizon…
Less to:
The casual iPhone user
(unless switching from ATT to Verizon, then back to ATT, then to…)
Apple: they sell you happily iPhones, whatever baseband is involved
iOS Developers: they sell apps to whoever wants them
Android world: why should they care about ‘intra-iOS’ movements?
What could somewhat more interesting to all of the above could be:
How many non-iOS Verizon users (new/old) will be getting an iPhone?
-AAB