This week, Apple and AT&T each released results for Q1 2009. Naturally enough, both were keen to talk up the continued vigorous growth in sales of iPhones. AT&T has the exclusive rights to sell the iPhone in the US and sold more than 1.6 million units to customers during Q1. Overall, Apple shipped nearly 3.8 million units over the same period.
Reportedly AT&T, buoyed by the continued high levels of demand for the high-end device and the additional consumption of data-centric value-added services, is seeking to extend the term of its exclusivity agreement beyond 2010. With effectively three quarters of all new AT&T contract customers added in Q109 taking an iPhone, you can see why AT&T is keen to keep control of this much-desired device.
Apparently, it will even go so low as to advising its staff about the shortcomings of the new Palm Pre, which is expected to be launched commercially in the US very soon, and before a new iteration of the iPhone hits the stores. A Pre-centric website has leaked details of an internal memo from AT&T that seemingly brands the Pre as a non-starter and serves as a primer for retailers to emphasise the iPhone over the Pre.
If it’s true, this will only serve to reinforce my feelings that the current exclusivity model is, ultimately, not in the best interests of Apple or AT&T. Even if it’s not true, potential customers may be disturbed by AT&T’s seemingly clumsy attempts to downplay a rival that has yet to materialise.
More worryingly, though, is that AT&T could be in danger of relying too heavily on a single device instead of promoting other products in an attempt to broaden its appeal in the high-end phone market. If Apple decides not to renew its exclusive licence with AT&T, the operator would have to look for another keynote product. And if it is seen to be doing so grudgingly, that again does not bode well for its public image.
From Apple’s perspective, perhaps the iPhone is now sufficiently well-established to allow the vendor to foresake the exclusivity model. Reaching out to other operators gives it greater opportunity to raise sales of the iPhone, particularly if a new model is in the offing. Although overall iPhone sales were up by 123% year-on-year in Q109, there was a q-o-q fall of 13% in shipments, caused in part by the recession but also, perhaps, by the shrinking pool of potential new customers at AT&T.
T-Mobile USA claims to have sold more than one million HTC-made G1 Android phones in the last six months, which is small compared to the sales of ‘converged devices’ reported by AT&T and Verizon Wireless over this time.
But, with established US brands like BlackBerry maintaining growth momentum, old hands such as Nokia seeking to aggressively pursue growth, and the threat of increased penetration by rapidly-growing brands in the US such as LGE and Samsung, perhaps a change in approach is to be encouraged?
Tags: Android, Apple, AT&T, BlackBerry, converged devices, Google, handsets, high-end devices, HTC, iPhone, LGE, mobile data, mobile phones, Nokia, Palm, Pre, quarterly results, Research In Motion, RIM, Samsung, smartphones, T-1, T-Mobile USA, Verizon Wireless