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The iPhone is helping AT&T while hurting the phone company's competition

Even though the iPhone does not launch for 11 days, the hype surrounding the latest Apple gadget continues to explode.  More than 64 percent of American users and 56 percent of British mobile phone users have at least heard of the iPhone. 

While the iPhone will be an expensive product -- priced at $499 and $599 for the 4GB and 8GB model respectively-- and users will have to sign an exclusive contract with AT&T, many consumers seem unfazed.  According to a study done by M:Metrics, almost 1 in 10 mobile phone users in the United States have "a strong interest" in purchasing an iPhone.  Of the 11,064 people polled for the study, 67 percent are subscribers of a service besides AT&T. 

Further research suggests that as many as 19 million Americans are interested in purchasing an iPhone.

"This is an early indication that AT&T's strategy to use the device to lure customers from competitors could play off," said Mark Donovan, M:Metrics senior analyst.

Analysts also expect AT&T iPhone users will spend an additional $20 per month on data service charges that average AT&T subscribers do not use.

Apple and AT&T have an exclusive agreement for at five years, meaning people wanting the iPhone will be forced to use AT&T.  Analysts expect T-Mobile and Sprint Nextel to be hurt most by the deal.

Apple plans to have up to 3 million iPhones for the scheduled launch on June 29.

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RE: This is "paid by Apple "research .
By audiophi1e on 6/18/2007 1:06:50 PM , Rating: 2
So true on your first statement.
There is no evidence it will truly hurt the competitors. Will the iPhone become the 'killer app' that draws millions from other companies to AT&T? Unlikely. It's just too expensive. But will it change AT&T's brand image? Possibly.

If the pricepoint were in the $200-$300 range, then it would likely be the killer app that will command the market. In a silly but true comparison, it's like how Street Fighter II for the SNES was the 'killer app' for the SNES that was the ultimate reason why the SNES beat out the Genesis in the console wars back then. By the time Genesis had it's version of SFII, it was too late. Too many people had purchased the SNES already.

IMHO, it is likely in the next 12 months we will see a direct albeit cheaper competitor to the iPhone. Of course it is unlikely for it to be as polished as a product, but I think such a phone will be made. It could be SanDisk or Creative (or even MS??) pairing up with Verizon or whatnot. It could even be made straight-up from Motorola or Nokia, etc... but the iPhone will not be alone for very long.

If SanDisk/Creative/MS were smart, they would have began working all the way back when the iPhone was first announced last year...and they'd release a worthy competitor within 12months that could fleece Apple Corp.

By michael2k on 6/18/2007 2:20:08 PM , Rating: 2
Everything you said has been true about the iPod now... for the last 5 years. A year later (a year too late!) Sandisk or Creative or Sony has come out with a competitive model... based on the previous model.

By which time Apple will have:
1) Added new high end features to boost the high end model
2) Reduced the price of the high end model
3) Introduced a low end model
4) Refine the product to be even better

If the same thing happens now that has happened in the past five years... no one else will catch up to the iPhone.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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