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AT&T: The U.S. Smartphone Carrier?

Posted by: Olga Kharif on May 15, 2009

Carrier AT&T announced today that it has twice as many smartphone users as any other U.S. mobile services provider. Nearly 32% of its postpaid subscribers now use an integrated device. AT&T, of course, is the exclusive service provider for the Apple iPhone in the U.S.

This is big news. Clearly, AT&T is doing a much better job of attracting high-end, most profitable users than Verizon Wireless and other competitors. Part of it is the iPhone factor. The device has led many subscribers to switch to AT&T. But AT&T may also be doing a better job marketing smartphone devices and related plans.

Already, there’s talk that, unless other service providers start catching up, AT&T could emerge as the go-to smartphone carrier, especially if it rolls out more new devices from Apple, as expected, later this year. “These devices are going to give AT&T the bulk of smartphone users,” says Richard Doherty, director at consultant Envisioneering Group.

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Reader Comments

Dan Hays (PRTM)

May 18, 2009 10:36 PM

AT&T has benefitted from a very smart device portfolio strategy and solid execution in its distribution channels. They figured out a few things very early on and capitalized on them well:

1) The selection of devices for GSM carriers is generally much better and a bit ahead of CDMA in timing of availability
2) Customer who purchase high-end, "halo" devices are typically willing to pay more for them, both in device cost and recurring monthly charges
3) Customers who purchase full-featured devices are more likely to actually use the features and generate incremental ARPU
4) A large carrier with solid distribution can effectively lock up availability of "halo" devices and, by marketing them smartly, can steal market share from weaker, floundering competitors

Ironically, AT&T was later to the smartphone party than many of its competitors. But, with a strong device portfolio and solid marketing strategy, they have reaped more benefits than all of their competition combined. It will be interesting to see how they apply this to their "Emerging Devices" efforts focused on embedded laptops, netbooks, cameras, and other data-only devices.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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