iPhone network provider?
Cellphones are a cultural phenomenon in the developed world. Scarcely are there people without them, and as we progress further in time, even the youngest of us have them. By subscribing to this phenomenon, we are all involved in an intricate game.
This article is from earlier in the year, addressing competition between AT&T and Verizon Wireless:
In the summer of 2010, I worked as a Sales Associate in a Best Buy Mobile retail store in one of the largest malls in America. Unlike traditional Best Buy stores, we were a stand-alone branch that only catered to mobile device, accessories, and network needs. Unlike typical cellphone retailers, we carried three of the top four network providers, rather than only one. Apparently, the industry was being “reimagined” again, as Apple released its latest installment in the iPhone collection, the iPhone 4. Traditionally, users are allowed to “upgrade” or renew their contracts with their providers and receive a phone at a discounted price every two years, however, this summer, I noticed that AT&T customers were being allowed to upgrade early, those with iPhones, even earlier than those without.
It was a well circulated rumor, and now statement of fact, that at the time, Verizon Wireless would be signing on to carry the iPhone 4. As a result, it appears that AT&T took little chance in losing customers to a top competitor and locked existing customers into renewed two year contracts much before they would traditionally be eligible. In essence, AT&T recognized that it might lose its US monopoly on the iPhone and rather had two options: waiting to see if the rumors were true or taking precautionary measures. Their actions would have depended strongly on how they thought the consumer would behave, perhaps having referenced datasets of iPhone customer loyalty, trends in early upgrades, anticipated upgrades in their infrastructure, etc.
Similarly, we as consumers are all players in the cell phone game, weighing our options of network providers’ devices, rate plans, features, family packages, etc. If we consider the isolated case of one consumer choosing between a new iPhone from AT&T or Verizon, many factors are at play. If an existing iPhone user with AT&T, our consumer might have the added benefit of an unlimited data plan being grandfathered in; if not an existing customer, the limited data usage on the AT&T network may be less appealing than the unlimited data at a premium price on the Verizon network. Say our consumer uses very little internet and likes the novelty of an iPhone, perhaps the dominant strategy is a 200MB data plan with an iPhone from AT&T at the low added price of $15 a month rather than $25 – $30 for unlimited from Verizon.
What if there is no dominant strategy for our consumer? A new customer to either company, each company having virtually the same prices, what does it come down to? Brand recognition? How well the consumer identifies with the name? Ultimately, it will be a factor of the network providers’ interconnectedness to the consumer, based on which network the dominant number of his or her friends uses. We can reason that given limitless in-network talk-time minutes, a customer will opt for the network provider their friends and family use.
In essence, the only winner in the game is Apple. There are no clear cut marketing strategies for either Verizon or AT&T and the choices the consumer makes are in a grey area.