Last year around this time Apple Inc.’s iPhone had yet to be unleashed on the public. AT&T Mobility, which was set to be the exclusive carrier for the device, was cautiously optimistic that the iPhone would be a home run for the carrier, while the competition was silently hoping for a rotten apple.
We all know how that story ended.
Following the iPhone’s strong launch, many of AT&T Mobility’s competitors quickly came to market with so-called “iPhone killers” that included many of the appealing features of the iPhone – the most appealing of which was the touchscreen – but few managed to capture the viral essence of Apple’s device. Verizon Wireless unveiled the LG Electronics Co. Ltd. Voyager, which included both a touchscreen and a real keyboard, Sprint Nextel Corp. tapped HTC Corp. for its Touch, which eschewed the real keyboard for HTC’s TouchFLO interface and Microsoft Corp.’s Windows Mobile operating system, and T-Mobile USA Inc. bolstered its own line of Windows Mobile-powered devices as well as continued to hype its exclusive Sidekick lineup.
With Apple expected to announce a 3G version of the iPhone next week, once again competing operators are lining up their responses.
Competing on instinct
The most aggressive appears to be Sprint Nextel, which most analysts have noted has felt the biggest brunt of iPhone-mania witnessed by an increase in customer defections over the past year. The industry’s No. 3 carrier took the wraps off of its Samsung Instinct at the recent CTIA show in Las Vegas and more recently announced plans to launch the device on June 20.
In an attempt to generate hype for the device, the carrier has been running a series of online videos comparing the Instinct to the current iPhone – with the Instinct coming out on top – and last week unveiled an online trailer for the device complete with explosions.
Iain Gillott, president of iGR Inc. and acknowledged iPhone fan, has so far been unimpressed with Sprint Nextel’s efforts, noting many of the superior features the carrier is touting for its Instinct in comparison to the current iPhone are expected to be addressed by the next-gen version of Apple’s device. Some online pundits also noted that the comparison could backfire for Sprint Nextel as the Instinct clearly has a smaller screen than the iPhone, which has been one of the main selling points of the device.
So does the Samsung Instinct stand a chance? Well, according to Gillott, iPhone fanatics will not stray. Indicated by the long lines for last year’s iPhone, there is a core “cult” as Gillott calls them, of people who are waiting for this device and it is no small group. And for these people, Gillott said, it’s impossible to go buy something else.
“You’re never going to get those people,” Gillott said. “I am one of them and I don’t want a Windows Mobile machine.”
Gillott said however, if other carriers are going to lure anyone in, it will be within the middle mass market. For those who like the idea of the iPhone and are intrigued by the touch screen, yet don’t like the iPhone price or even AT&T Mobility for that matter, Sprint Nextel and Verizon Wireless may have found bait in those people.
The touch screen is probably the most notable and most luring feature of the iPhone and its competitors, but Gillott said that isn’t even the best part. His appreciation of the iPhone lies in its upgradeable capabilities. Similar to updating your PC, the iPhone can implement new applications and functions without purchasing a new handset, common of most phones.
Ride out the storm
Verizon Wireless recently added to its touchscreen arsenal with the launch of Samsung’s Glyde. Roger Entner, SVP of the Communication Sector at Nielsen IAG, anticipates Verizon Wireless will come out with another touch screen phone this summer. However, Entner thinks the biggest obstacle for other carriers is not nabbing subscribers, but trying to do so at the same time as AT&T Mobility.
“They’re at significant odds.” Entner said. “I would advise the others to hunker down and let the iPhone run its course.”
His main point is money spent. Entner believes the fight is not worth the blood loss. Competing carriers must spend a lot and even after spending a lot, Entner said, it won’t be worth it.
“In wireless competitions, it’s jujitsu.” he said. “You don’t match strength for strength because you’ll get overwhelmed.”
Many handsets will be released and initiatives will be taken to win the iPhone battle, but the one thing AT&T Mobility at least has on its side right now is silence. They have kept quiet and therefore, kept anxious iPhone-ers wondering how great their new toy will be, while other carriers just try to gain earshot to tell everyone how great their products ARE. The difference this year is that the carriers are prepared. Last year, the buzz of the iPhone left carriers stunned and they didn’t quite know what to expect. This year they are reading, fists up. And they’re making sure we all know about it.
The other quiet player in this match is T-Mobile USA Inc. Avi Greengart, Research Director of Mobile Devices for Current Analysis, said T-Mobile USA is backing off and has surrendered to the will of the iPhone, agreeing that data-oriented customers should look to Apple and AT&T Mobility. Greengart said the carrier is instead focusing on budget-minded consumers, offering 2G music phones such as Nokia’s 5310 Xpress Music, a $49 handset with one gigabyte of storage.
