Yesterday Kaufman Brothers’ Shaw Wu wrote a note to investors informing them he had the inside word that AT&T is losing its iPhone exclusivity in the first half of next year and T-Mobile will likely reap the benefits.
Wha? Where’s the excitement?
Well first, I’ve heard this story before from another set of “analysts.” Back in January analysts were shouting about Apple’s exclusivity contract being up in June. TheStreet.com reported then that Apple had selected Qualcomm to manufacture CDMA chips for Verizon and Sprint iPhones.
Lo and behold, it’s June: Steve Jobs introduced the new iPhone and it’s still on AT&T. Just AT&T. Search for Qualcomm and Apple (and variations with CDMA) and you won’t find anything about a Verizon or Sprint iPhone — both companies said screw it. Now Sprint is banking on the HTC EVO, which had impressive day-of-launch sales (though a third of what the carrier first reported), and Verizon is drumming up excitement for Droid 2 — leaked photos, oh boy!
In other words, they believe we’re getting close to the point — if we haven’t actually hit it — where Android truly rivals iPhone. Damn, that was quick, considering Android really didn’t hit its stride until the release of Droid in November. Mike Steib, director of emerging platforms for Google, gave some interesting stats at the Mobile Marketing Forum on Tuesday to back up Android’s reputation as a contender, including 100,000 new Android device activations per day.
The Wall Street Journal’s tech bloggers are asking “Is iPhone Losing Its ‘Wow’ Factor?” Jason Kincaid of TechCrunch actually had the nerve to write that the new iPhone seems to be playing catchup to Android (Although there’s breaking news on TechCrunch that “Arrington buying an iPhone 4!” Next up on TechCrunch: “Arrington eating turkey sandwich for lunch!”).
Unlike Sprint and Verizon, which use CDMA chips in their phones, T-Mobile’s tech is similar to AT&T, which would make for a smooth transition. But why would T-Mobile go along with Apple’s “Draconian” terms? Well, the company’s desperate: it’s been bleeding customers or a while — down 77,000 subscribers in the first quarter — and it’s trailing in the 4G race.
Although T-Mobile ended up being the sole carrier, the allure of Google’s Nexus One has not been strong enough to flip the company’s fortunes — the device was warmly received, but sales have been lacking. The move into the T-Mobile retail stores for some reason caused Nexus’ price to skyrocket $170 ($120 after mail-in rebate) from the price on Google’s now shuttered online store.
In addition, beleagured CEO Robert Dotson is stepping down at the beginning of next year, to be replaced by Deutsche Telekom (T-Mobile’s parent company) exec Philipp Humm. New management is always a good thing, right? It made me change my mind about that KFC down the street (they finally got some new bulletproof glass!). Well, Humm’s got kind of a black spot on his record — he gave up the DT managing director slot when 17 million customer records were stolen back in 2008.
So the carrier doesn’t have much going for it — but would an iPhone turn things around? Maybe…
Somebody important in the mobile world (wouldn’t you like to know?) asked me the other day if I thought the whole Apple/Gizmodo blow-up, complete with the police breaking down blogger doors, wasn’t actually the result of a plant. What if Apple had purposefully leaked the device to build up hype and controversy?
It’s an interesting theory, especially considering that the whole incident generated a helluva lot of media coverage, even if there was some negative sentiment toward Apple. And think about it — after you rile up the masses with the launch of your “game-changing” tablet device, how do you get them interested again a few months later when you release the new version of your old toy? Even if that toy is completely redesigned and has some neat new features…
Alas, the whole debacle seemed to take some of the air out of the actual introduction of the iPhone 4. And the launch wasn’t helped by a wireless fail during the presentation (though CEO Steve Jobs gets bonus points for keeping his cool).
So maybe those WSJ guys have a point — even with two cameras and multitasking, the iPhone 4 doesn’t really get my “WOW!” going. The possibility of the iPhone coming to T-Mobile makes me shrug.
I wouldn’t call it “jumping the shark” — the iPhone 4 is still going to sell like hotcakes and Apple mobile devices will likely continue to dominate the mobile web. But for how much longer? Apple doesn’t appear to be light years ahead of the competition anymore — as Kincaid noted, certain features are leveling the playing field with Android.
So why is this important to advertisers? I’m so glad you asked! Because of iAds. Yes, they’re cool-looking, but they only run on one platform (guess which), require at least $1 million in spend, have $10 CPMs — oh, and Apple wants a hand in the creative process. I’m counting more red flags than green lights.
Since iAds were introduced, many in the mobile advertising space wondered whether a single-platform solution was a really a viable one — $60 million in promised spend so far would seem to answer that in the affirmative. Yes, Apple’s is the most popular platform, but with Android’s growing prominence (and hey, plenty of people still love their Blackberrys), is it worth it to shell out for a single-platform solution and have the ad network mingle with your creative and restrict what software you use in building it?
The indie networks can offer you multi-platform solutions — Jumptap’s got the holistic thing going, Greystripe has Flash-translating tech, Millennial’s got a wealth of ad sizes and styles — while keeping their hands to themselves.
The iAd looks like a luxury item — and last time I checked, we’re still in economic recovery mode. Why buy the Porsche when the Ford Focus will get you to the office? It was one thing when no other device could touch the iPhone, but with Android-enabled devices appearing in a flurry, Apple’s spot on top of the mountain seems a lot more precarious.