There are many things driving the popularity and growth of the Apple's iPhone, but as we enter 2010, one analyst believes the addition of Verizon will be the iPhone's big new feature.
(Credit:
Apple)
Gene Munster, senior research analyst for investment bank Piper Jaffray, said in a research note to clients 0Wednesday that he believes there is a 70 percent chance that Apple will launch a new iPhone with Verizon in 2010. Munster puts the timing of such a move around the middle of the year.
That makes sense, since Apple has used June and July to launch all three of its iPhone models. The company also used the summer months to debut the App Store in 2008. It seems reasonable to speculate that Apple would continue with its schedule of introducing a new iPhone in mid-2010.
Munster said a move to Verizon would more than double Apple's current potential market by 89 million subscribers, adding to the already 82 million available on AT&T.
Of course, at this point the big problem is Apple's arrangement with AT&T as its exclusive carrier in the U.S. That deal is widely thought to end in 2010, although talks between the two companies are said to be ongoing, according to The Wall Street Journal.
The analyst's report also cites the iPhone's apps as playing a major role in the future growth of the device.
"We have seen a shift in the reason why consumers buy an iPhone. Initially, it was the touch screen and easy access to the Internet" said Munster. "Today, apps are cited as one of the top three reasons consumers buy an iPhone."
Would you like to let AT&T know when your iPhone has dropped a call? Well, now there is an app for that.
AT&T on Monday released a new application called "Mark the Spot," which lets iPhone users submit complaints about dropped calls, poor service coverage, and less-than-perfect voice quality.
The application is free and available in the iTunes App Store. It uses GPS technology in the iPhone 3G and the iPhone 3GS to pin point where the user is when experiencing the problems. For first generation iPhones, it uses cell tower-triangulation to get a fix on problem areas.
Once the application is launched, users have several complaint options. They will see a screen that has buttons that let them report a dropped call, poor voice quality, or poor service coverage.
AT&T spokesman Mark Siegel said AT&T plans to use the data collected to identify trends and prioritize the company's network investments.
"We think this is a great way to get customer feedback to improve our network," Siegel said. "We are always looking for ways to make it easy for customers to share their experiences. And this app lets customers report issues. It logs the time and location and automatically forwards the information to our network planning team."
iPhone owners have been complaining about AT&T's network since the Apple iPhone went on sale in the summer of 2007. Complaints mounted after the 3G version of the phone was released a year later in 2008. And as more iPhone users come onto the network, more people, particularly in densely populated urban areas, such as New York City and San Francisco, have experienced problems with dropped calls and congested data networks.
AT&T executives have not admitted that AT&T has a problem with its network. But executives, such as AT&T Chief Technology Officer John Donovan, have said that the company has seen a surge in data traffic attributed to iPhone users, who typically consume more wireless bandwidth than other AT&T wireless customers.
AT&T has been upgrading its network to keep up with demand. But problems persist. And AT&T's network recently got a poor ranking in terms of customer satisfaction in a Consumer Reports survey.
Verizon Wireless, AT&T's chief rival, has taken advantage of AT&T's struggles with a series of advertisements that point out AT&T's lack of 3G network coverage in certain parts of the country. Verizon is running advertisements that mock the Apple "There's an app for that," catch phrase with one that says, "There's a map for that."
AT&T fired back with a lawsuit and an advertisements of its own featuring actor Luke Wilson, who points out AT&T's strengths while taking a few shots at Verizon Wireless.
AT&T recently dropped its lawsuit against Verizon. And Verizon, which had been suing AT&T over claims that it has the fastest 3G wireless network, also dropped its lawsuit against AT&T.
Siegel said that the new "Mark the Spot" application was not prompted by the bad publicity around its network issues nor was it prompted by the current ad wars going on between AT&T and Verizon. Instead, he said that the application was simply a part of AT&T's ongoing commitment to listening to customers.
"We are always looking at ways to get customer feedback in as timely a manner as possible," he said. "That's why we pay attention to Twitter, Facebook and blog. One of the great values of these social networking tools is that it's a great way to get instant feedback. And it helps us identify problems."
The "Mark the Spot" application can be downloaded onto all iPhones running version 3.0 or later of Apple's operating system or it can be access using iTunes and synchronized to the iPhone via a PC or Mac.
Siegel said that AT&T is testing the "Mark the Spot" app for other devices. And he said AT&T hopes to offer applications on other smartphones in the future. No date has been announced yet. And Siegel didn't specify which devices might get the new application, but considering that AT&T sells a lot of Research in Motion's BlackBerry devices, it's likely it will create an application for that device. The app could be offered through AT&T's own application storefront or through RIM's BlackBerry App World.
Refurbished iPhone 3GS as low as $49
(Credit: AT&T)AT&T is selling a refurbished iPhone 3GS for as low as $49 with free shipping and no activation fees when purchased with a $30 per month data service, 2 year contract, and new activation.
The phones are available in either 16GB ($49) or 32GB ($149) capacities and available at these prices while supplies last when ordered from AT&T's Web site.
AT&T will probably run out of these pretty quickly, since these prices are going to be hard to pass up for most people.
Rumors about me are just rumors.
(Credit: Corinne Schulze/CNET)Almost as soon as the iPhone debuted on AT&T back in 2007, rumors started swirling that the popular touch-screen handset would head to Verizon Wireless as soon as AT&T's exclusivity ended. And since then, as AT&T's network has struggled to keep up with the demands of iPhone users, the rumor has only intensified. Indeed, every day I hear it repeated somewhere, whether it's from a tech/gadget site, a random Facebook friend, or a stranger I meet on the street.
Analysts have also dished the rumor on occasion, and just last week Brian Marshall, an Apple analyst with Broadpoint AmTech in San Francisco, mentioned it in an interview with Bloomberg News. Marshall suggested that Apple pursue Verizon Wireless as a possible carrier after AT&T's exclusivity contract ends next year.
The problem with Marshall's argument, and the rumor itself, is that it relies on a "fact" that has yet to be proven. To date, neither Apple nor AT&T have publicly said when the exclusivity contract will end. Though the summer 2010 is the most common time frame given--it would mark the third anniversary of the original iPhone--the details of the contract have yet to be released. We know that AT&T's exclusivity will end at some point, but we don't know exactly when that will be. Perhaps Marshall was told something in confidence, but I can promise you that I haven't heard anything of the sort.
Like I said back in August, I think that a Verizon iPhone is still possible (remember that Verizon's misfit toy ad is slamming AT&T's network and not the iPhone). Yet, I don't think it will happen until Apple produces a hybrid GSM/CDMA phone or adopts LTE technology (Canada's Telus did something similar with an HSPA device). Otherwise, I think it's unlikely that Apple would produce a CDMA-only version, even for America's largest carrier. I could be wrong, but I'm not going to believe any rumors about a Verizon iPhone until I hear something from Apple and Verizon. And similarly, I'm not going to believe anything about AT&T's exclusivity until I hear it from AT&T.
Until that time I can speak only to the rumor as I've always done. No matter what you heard through the grapevine or from a customer service rep in a Verizon store, we still don't know when, or even if, the iPhone will come to Verizon. Until that changes, I wouldn't take the rumor--and that's exactly what is it--seriously.
AT&T's bet on the iPhone continues to work well. The company reported Thursday a better-than-expected third quarter with 3.2 million iPhone activations--the largest quarterly activation total to date.
The telecom giant had net income of $3.2 billion, or 54 cents a share. Revenue came in at $30.9 billion, down from $31.3 billion a year ago. Wall Street was expecting earnings of 50 cents a share.
If you're an AT&T customer, you may be more interested in the update on its infrastructure improvements. The company said dropped calls in September declined by 12 percent, compared with a year ago.
Total churn for the quarter was 1.43 percent, down from 1.69 percent a year ago.
As usual, AT&T was powered by its wireless unit, which represents 44 percent of total sales. Wireless data revenue was $3.6 billion, up 33.6 percent from a year ago.
Read more of "AT&T cuts churn rate; Activates 3.2 million iPhones; Touts network upgrades" at ZDNet's Between the Lines.
With its large subsidies to Apple, AT&T doesn't break even on iPhone accounts with high data-usage until the 17th month of a 24-month contract, according to a new report from Yankee Group.
The report, titled "The Golden Subsidy Egg's Goose is Cooked: Welcome to the Brave New Subsidy-Free World," looks at the downside of subsidies paid to manufacturers by cell phone carriers. The report cites AT&T's iPhone contract with Apple as a prime example.
Subsidies have typically helped mobile carriers offer customers free or low-cost devices in order to lure them into buying long-term service contracts. Smartphone owners are happy because they're getting the latest devices at rock-bottom prices. But the surge in data use and the rising cost of grabbing new customers are cutting profit margins for providers, says Yankee Group.
With the mid-2008 launch of the iPhone 3G, AT&T struck a subsidy deal with Apple that slashed the price to consumers to $199 for the low-end version but forced the carrier to bear the upfont costs of each unit. Several published reports have estimated that AT&T's subsidy is at least $300 per phone. (Neither AT&T nor Apple responded to requests for confirmation.)
At the time, AT&T acknowledged that the new deal would impact profit margins and dilute earnings. The company's second-quarter results did show a dip in both revenue and earnings.
AT&T went along with the subsidy because it felt that lower iPhone prices would bring in more customers. But in a catch-22, more customers have also put a strain on the carrier's network, both for voice and data. Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, said in August that AT&T's wireless data usage jumped almost 5,000 percent from 2006 to 2009.
That strain has made for some unhappy iPhone users and has forced AT&T to scramble in order to beef up its wireless infrastructure.
Removing the subsidy for AT&T would win the company a total return of 33 percent over a two-year contract and reduce the break-even point to eight months, Yankee Group said.
Moreover, unless mobile carriers in general can cut their reliance on subsidies, Yankee Group noted, they may see profit margins fall even further.
"Until now, North American operators have been kings of the devices market, controlling distribution and bearing many of the risks," Andy Castonguay, Yankee Group director and author of the report, said Thursday in a statement. "Rising customer acquisition costs, exclusivity fees and flat-rate pricing are squeezing margins for coveted smartphone users. To reverse this trend, operators must spread the control and risks across OEMs and retailers to offer more affordable options and establish greater levels of clarity and trust with consumers."
Below is a graphic from Yankee Group's report:
AT&T on Tuesday said it has made the necessary changes to enable voice over IP iPhone apps to run on its wireless network.
Before Tuesday, VoIP apps would only work over a Wi-Fi network. In other words, if you wanted to use Skype to call a friend, you had to be connected to a regular Internet wireless network. Once you were out of range of that network, the call would end.
AT&T said it informed Apple and the Federal Communications Commission of its decision Tuesday afternoon. For its part, Apple was quick to react and make its own changes.
"We are very happy that AT&T is now supporting VoIP applications," Apple spokesperson Natalie Kerris said. "We will be amending our developer agreements to get VoIP apps on the App Store and in customers' hands as soon as possible."
There are already quite a few VoIP apps available in the App Store, like Skype, Vonage, and Truphone, but they only work over Wi-Fi. Developers will need to enable the apps to work over AT&T's wireless network and then re-submit them to the App Store.
Of course, the application that everyone will be wondering about is Google Voice. Tuesday's decision may not have much of an effect on that situation because Google Voice isn't really a VoIP application. Google's app still uses your wireless network minutes, but the service does offer other benefits like receiving calls to a single number in multiple places.
As promised, AT&T's iPhone finally has the capability to send multimedia messages to another phone number. Whatever AT&T had to do to gets its act together, the carrier did it.
The update went live just a moment ago, and I've successfully sent my first MMS on CNET's iPhone 3G. I was able to exchange photos both with another iPhone and a Samsung SPH-M330 on Sprint.
You'll need to connect to iTunes to receive the update, which should download in seconds. We were able to send an update immediately, but you may have to restart your iPhone first.
To confirm that your device is ready, go to Settings > General > About. Your carrier version should be "AT&T 5.5," and you'll need the latest iPhone 3.1 software update. Also, remember that owners of the original iPhone will miss out on the fun.
For more information, check out Apple's links for updating and enabling carrier settings. And if you're having problems, see Apple's troubleshooting tips or the MMS send failure fix from iPhone Atlas.
Welcome, AT&T iPhone, to 2003. Now we just need that tethering.
It's already known that AT&T is activating MMS for the iPhone on Friday, but the company has now narrowed the time frame to within a few hours.
(Credit:
Apple)
As reported by AppleInsider, AT&T's official Facebook page said the service will be activated late morning Pacific time Friday. That's not exactly definitive, but at least no one will need to sit around all morning wondering if it's on yet.
The iPhone's multimedia messaging service will allow the transmission of photos, contacts, audio files, and locations with the Messages app, according to Apple.
In order to get the service, you will need to download a "new carrier settings update enabling MMS," according to AT&T. The update will be available through iTunes, the company said.
It seems odd that an update is needed when some users have been reporting for the last 10 days that MMS has been activated on their iPhones.
Despite AT&T bringing one of the most requested services to the iPhone, comments on AT&T's Facebook page could be described as sarcastic at best.
"Welcome to 2003 AT&T!" one comment read.
"I hope it crashes badly....this will make them spend all that money they charged us for something that we could not even use for months!" wrote another.
While some people scorned AT&T's delay in delivering MMS, others echoed the recent sentiments of CNET News' Elinor Mills and suggested the company improve its network.
"I rarely use the network at all. I pay...every month for a handheld mac. I only get enough service at my home to text, we don't have 3G anyway so I use my own wi fi...I am paying twice for the Internet. I could care less about MMS because I'd rather get signal and make calls (than) send picture messages," one person commented on AT&T's Facebook page.
AT&T charges an iPhone user with a service that's not available on the iPhone.
(Credit: Screenshot by Dong Ngo/CNET)I've been a customer of AT&T ever since 2003, when I got myself my first cell phone ever, and I've been a very good one. The proof: I set my bill to autopay from day one and even convinced a few friends to move to AT&T (mostly so that we don't have to use the minutes to talk to each other.)
I found out Thursday that AT&T hasn't been very nice to me.
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