Friday, May 02, 2008


Note: There is a correction to Verizon's 2007 satisfaction score, which is 71, not 61.
In 375 (ADEP), we discussed the Apple iPhone & AT&T exclusivity deal. I was out of the country when it launched (it still isn't available in Canada), so I missed the huge buzz and only read about the hype on tech blogs and Wired. Well, typically all phones make it to all 4 major carriers, but this exclusive lock-in with AT&T creates a tremendous amount of value for that carrier, which (ideally) fosters a huge commitment to the alliance. At the time of the deal, AT&T was the market share leader: AT&T 27.1%, Verizon 26.3%, Sprint Nextel 23.6%, Others 11.9%, & T-Mobile 11.1%, so Apple was going with the largest base. In terms of 2007 customer satisfaction numbers (a key marketing metric), wireless telephone carriers are in the high 60s and low 70s on a 100-point index. AT&T is up from being in the low-60s, but is still a lackluster 68. Verizon is a 71. The worst of the majors is Sprint Nextel at 61. All others are 68 and T-Mobile is 70. Strategically, what would you do? You would probably want to know which carrier has the best customers, in terms of "technographics" (technology usage & demographics).


Dan Loghry said...

Who did the artwork of the apple? Thats awesome! From what POV are you asking the question? From the business side or the consumer side?

Kmk said...

Yeah, I should have been clearer. I've been thinking about whether or not AT&T was the best alliance partner. One of the issues is how much a partner's marketing mix affects your own, as well as revenues and profits. There are some that say AT&T has a strong infrastructure, good coverage, and is good for data. The customer satisfaction numbers make you wonder if a 5 year deal was a good idea.

The graphic is a cropped version of 11 year old cover art for Wired magazine: 5.06

nick said...

i think verizon would have been better. Not just because i have that service, but because i feel it is viewed as "the" brand with the biggest network most people ect. When i think of cell phones first i think verizon then at&t. I think maybe 2 year exclusive deal... but they shot them selves in the leg! i want the i phone and would help me alot... im sure many others are the same way... the sales of iphones would sky rocket if they changed to verizon. As of data packages... well whatever edge network and others stil suck... and untill tech gets better it will still be slow..