Friday, January 14, 2011

AT&T Losing iPhone Customers to Verizon

According to data that was released Thursday, January 13 by ChangeWave, approximately 26 percent of current Apple iPhone users that are on AT&T’s plan are planning to switch to Verizon’s iPhone when it is made available in February.

ChangeWave polled 4,050 people a few days before the big announcement that Verizon Wireless made on Tuesday, January 11. They asked those polled that if Verizon were to announce that an iPhone would be made available on their network, would they be switching providers in the next 90 days? Ten percent said that they were planning on switching within 90 days. About 16 percent said that they would be purchasing a Verizon iPhone but not necessarily right away. Among the AT&T users polled, 26 percent said that they would be ditching the AT&T version of the iPhone for the Verizon iPhone.

About 41 percent of those polled, who said that they would be switching from AT&T’s iPhone to Verizon’s, said that they would be making the switch sometime within the next three months. Another 31 percent said that they would be making the switch within the next year.

AT&T users aren’t the only customers that plan on switching service providers though. About 15 percent of T-Mobile users said that they will switch to Verizon for the iPhone, 10 percent of Sprint’s customers also plan on doing this as well, and 4 percent of the existing customers at Verizon said that they will be switching from their current device to the iPhone.

ChangeWave reported that this is the biggest churn rate that has ever been recorded for AT&T. The most prominent reason for AT&T’s customers leaving and choosing the Verizon iPhone is due to poor reception or coverage. A whole 42 percent claimed that this was their reasoning. Another 27 percent said it was because of dropped calls, while 17 percent said their decision was due to the cost.

ChangeWave did report though that AT&T has made improvements in its dropped call history.
"While AT&T continues to struggle in this very important area and trails Verizon by a wide margin, it has made significant advances since our previous survey –improving from its all-time worst 6.0 percent rating last September to 4.7 percent in the current survey," ChangeWave said. "The findings suggest AT&T is now taking concrete steps to try to improve long-standing service issues. But can it do so quickly enough to forestall large-scale defections to Verizon?"

Who knows if consumers are really going to dump AT&T and jump on the Verizon bandwagon, but as data that was released by comScore on Thursday, January 13 suggested, the Verizon iPhone is really a big turning point in the smartphone market.

"The iPhone Verizon deal will no doubt bring even greater competition to the smartphone arena throughout the coming year as Android, iPhone and RIM jockey for the leadership position," Sarah Radwanick, comScore's marketing communications manager, wrote in a blog post.

Radwanick also pointed out Verizon’s smartphone market share that grew from four percent in the last year to 27 percent. Obviously, that’s less than AT&T’s 38 percent market share, but AT&T did drop 7 percent last year due to the abundance of different smartphones that were made available in the last year. Verizon’s numbers really rose mostly because of the strong Android-based devices that the company added to their lineup of smartphones.

In just overall mobile device market share, Verizon has 31 percent, while AT&T has 27 percent.

ComScore also suggested that the iPhone customers that Verizon does end up nabbing will most likely be in customer segments that are attractive to mobile providers. This basically means younger users that come from higher income brackets. Also important to note, iPhone users seem to remain loyal to the iconic Apple smartphone. More than half have subscribed via AT&T for more than three years now, while another 28 percent have had subscriptions for one to three years.

"Although it's too early to tell exactly how consumers will react to the Verizon iPhone announcement, it is fair to say that this deal represents a potentially significant turning point in the ascendance of the smartphone market," Radwanick concluded. "Only time will tell which carriers and platforms will emerge as the market leaders, but it's clear that right now the consumers are winners as they gain yet another option when making their smartphone choice." is news of, for and by SMBs! The Small & Medium Business Magazine!

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