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iPhone will test loyalty of cellular customers

Posted on April 25th, 2007 at 5:50 by John Sinteur in category: Apple -- Write a comment

[Quote:]

Sprint Nextel recently lowered online music prices and introduced a feature-rich but low-priced music phone. Verizon Wireless is allowing potential subscribers to try its network for free for 30 days. Phone vendors are announcing a steady stream of flashy music phones such as the Samsung Ultra Smart F700 and LG’s Prada.

Many believe there’s one reason for this burst of activity: the iPhone. Few have seen Apple’s forthcoming phone/media player, which AT&T/Cingular says it will release in June, but it has been the topic of frantic, sometimes fanatical online discussion. And other cellular operators appear to be busily preparing themselves for its release.

Another word, loyalty, sums up the reasons for the strong response from AT&T’s competitors. Some analysts say that AT&T is attempting to use iPhone to radically change the loyalties of cellular subscribers. These analysts note that, while most subscribers aren’t very loyal to their cellular operator, many people are fiercely loyal to Apple and its iPod media players.

“We did a survey and we found … carrier loyalty wasn’t a big issue. People aren’t that loyal,” said Miro Kazakoff, director of the wireless practice for market research firm Compete. “So [AT&T] is trying to transfer loyalty to the device, not the carrier.”

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