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Posted by Site Administrator on July 22, 2008
I first blogged about the Apple iPhone and the new approach they were taking with AT&T last year. There wasn't much more than a small AT&T logo at the top of the screen to indicate the network. Apple owned the experience and the customer. Customers were paying for the phones in addition to about $20 per month in data access and a voice plan. Things seemed to be working well.
I walked by the Apple store in SF a day before the new 3G version went on sale. There was only one person lined up. When I walked by the SF store on day #4, however, there were probably 50 or 60 people in line - and this was AFTER Apple and AT&T announced they had already sold one million. I walked by the Apple Store near Central Park on day #10 and there were still police gates to contain what seemed to be more than 100 people still in line. I walked by the same store on day #12, and there was a sign posted out front that said "3G iPhones are not available. Please check online for store availability." So, the line I saw a couple of days before wasn't just Europeans taking advantage of the strong Euro to buy iPods. The device seems to be gaining in popularity as more people get it.
I knew the $199 price tag was attractive, but I thought the $30 per month in data charges alone would slow down registrations. At Jupiter, we've always maintained that consumers will pay for good experiences and that consumers don't simply expect everything for free.
Just off the AT&T earnings call. They announced that 18 percent of their customers have "integrated devices." They have 72.9 million subscribers as of the end of Q2 2008. (so new 3G iPhone customers don't count) They stated that those customers with integrated devices have an average ARPU that is double their average customer's ARPU. They also commented that 40 percent of 3G iPhone customers were new to AT&T. AT&T had approximately 5 million gross add's in Q2 - they've made a good start on topping this number in Q3.
AT&T isn't even benefiting from the application sales directly. As is typical of new phone owners, I loaded up my iPhone with about a dozen new applications the first weekend. I spent more on games for my cell phone in one weekend than I have in the previous five years combined.
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