As growth in the cell phone industry begins to cool off, though, network operators will have to steal customers from one another. Market saturation has already reached about 78%. AT&T wasn't shy about its plans to steal other customers. At the press conference held at CES in January, the AT&T (then Cingular) spokesperson quite candidly said AT&T expects people to abandon their current carriers and join AT&T so they can get the iPhone.
Adding hot new products like the iPhone to its roster of devices is one way to attract customers for the short term. Keeping customers for the long term is a matter of providing good, consistent service once they're signed up. The major network operators have been poking at one another for the better part of a year, each claiming theirs is the best, the biggest, the baddest, No. 1, and so on.
Whatever the quality of their networks, Verizon, Sprint, and T-Mobile have to respond to the iPhone with something, anything, because none of them will have the chance to sell the iPhone until 2012.
Yep, that's right. According to USA Today, the iPhone will only be available from AT&T for the next five years. That's a heck of contract. In fact, Apple is not even allowed to develop a CDMA version of the iPhone during that five-year period. That's intense. No other phone has had such a lengthy distribution contract.
Strigl told USA Today that Verizon's answer to the iPhone is on its way. He said, "We do have a very good response in the mill. You'll see that from us in the late summer." Interestingly, LG is set to announce its new flagship device for Verizon later this summer. Coincidence? You decide.
Having the iPhone (which, by the way, is an unproven product) in its portfolio will likely be a good thing for AT&T in the short run. I wouldn't be surprised if 1 million people buy the thing before the end of the year. How many of them will stay with AT&T after their lengthy contracts are up, though, is another question.
In the meantime, the other three major network operators will have to employ a strong set of tactical maneuvers to fend off the iPhone. They will have to release devices that are exciting enough to convince people to upgrade, rather than cancel contracts and defect. What cell phone manufacturers are going to step up to the plate and deliver?