 Re: Why did Apple choose GSM for the iPhone?
Traveling Man wrote:
> On Thu, 21 Feb 2008 16:30:15 GMT, John Navas wrote:
>
>>> True, I originally thought that the iPhone would enable AT&T to overtake
>>> Verizon in new retail additions, but in fact Verizon continues to widen
>>> its lead. ...
>> There is no such "lead" without cooking the books. AT&T is the largest
>> carrier in the USA.
>
> Maybe by numbers of subscribers, but VZW has the best network coverage
> nationwide.
I was referring to retail subscribers, not prepaid and MVNO subscribers.
Verizon has a significant lead in retail subscribers, and continues to
widen that lead every quarter. At the end of 2007 AT&T wireless had 55
million retail post paid customers, while Verizon had 61 million.
Analysts consider retail net additions one of the key metrics of a
carrier because of the higher ARPU, and the fact that generally the
subscriber is locked into a 2 year contract. It's not just the 6 million
more customers that Verizon has, it's the fact that they continue to add
more retail postpaid customers every quarter than any of the other carriers.
"The biggest difference between the two companies is that Verizon caters
to more retail customers directly than AT&T and its subscribers are more
loyal. That explains why Verizon generates higher sales from its mobile
division ($11.3 billion) than AT&T ($10.9 billion) even though AT&T has
more customers. AT&T holds a 2-million advantage, 65.7 million to 63.7
million.
Almost all of Verizon's customers belong in the so-called postpaid
category. That is, customers who sign up for annual plans and pay at the
end of each month. They are the most profitable and most valuable in the
industry."
From:
"http://www.marketwatch.com/news/story/verizon-att-neck-neck-mobile/story.aspx?guid=%7B28A282C2-B420-482A-8FB9-14D6DA57DF67%7D"
The most probable reason why Apple first went to Verizon to try to get
them to take the iPhone is because Verizon adds a lot more retail
customers each quarter, as well as having a larger retail base of
customers. The iPhone isn't sold to prepaid customer or MVNO customers,
which make up a much larger percentage of AT&T's net additions each
quarter, compared to Verizon. Apple has followed the same model in other
countries as well, first approaching the carrier with the greatest sales
potential, then moving down the line if their first choice isn't
interested in their revenue sharing model. I think that if Apple had
just decided to do hardware-only, without the revenue sharing, then they
wouldn't have went to Verizon first since an unlocked GSM iPhone would
have sold far more units than a CDMA iPhone. But Apple's revenue model
was based on monthly revenue per subscriber, which made Verizon a more
attractive choice.
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