Apple’s expected unveiling of its latest iPhone iteration tomorrow is set to not only throw a new, shiny weapon into the white-hot smartphone wars, but also impact how domestic wireless carriers are positioned heading into the all-important holiday shopping season.
Most analysts expect the new device to hit the street later this month, which will provide wireless carriers with a couple of months of prime shopping season in which to hold onto current customers or, better yet, steal some subscribers from rivals.
Recent reports suggest that Verizon Wireless has the most to gain from the latest iPhone launch, especially if the device includes support for LTE networks. Analysts have noted that the carrier’s coverage leadership in terms of LTE support provides Verizon Wireless with a strong marketing advantage in both retaining current customers and attracting new subscribers.
Looking to close that coverage gap, both AT&T Mobility and Sprint Nextel recently announced expansion plans for their current LTE networks.
The most likely to see a negative impact from a new iPhone launch could be T-Mobile USA should the operator again fail to garner a distribution agreement for the device. T-Mobile USA this week launched a campaign to attract current AT&T Mobility customers with iPhones, noting that beginning Sept. 12 it would begin supplying its retail stores with unlocked iPhones running T-Mobile USA SIM cards. The move could indicate that the carrier is either ramping up for its own iPhone launch by priming the retail pump, or that it will not be getting the new device and thus is looking for any way possible to link itself to the expected iPhone hype.
The biggest challenge for T-Mobile USA’s ability to eventually sell the iPhone will be in its current network re-alignment plan that will see the carrier migrate its current HSPA+-based services from its 1.7/2.1 GHz spectrum bands to its 1.9 GHz spectrum, thus freeing up the 1.7/2.1 GHz band for LTE. Once completed, that move will align the carrier’s LTE offering with expected network enhancements from Verizon Wireless and AT&T Mobility that are looking to eventually bolster their current 700 MHz-based LTE networks with their 1.7/2.1 GHz spectrum holdings. However, T-Mobile USA’s plans are still in their infancy, though the carrier has said it expects to begin rolling out LTE services next year.
Sprint Nextel’s own unique LTE network plans, which currently rely on its 1.9 GHz spectrum, could be a positive turn for T-Mobile USA as an LTE device made specifically for Sprint Nextel’s network could indicate a willingness by Apple to fine tune its device for specific carrier needs.
While carriers will of course be very receptive to a new iPhone, there are some that are also bolstering their offerings in order to counter the high costs associated with subsidizing the device. Verizon Wieless last week partnered with Motorola and Google for an event in New York City to tout three Android-powered smartphones that indicates the carrier is looking to keep its smartphone offerings diversified. Verizon Wireless has seen strong success in the Android space with the current Motorola Razr lineup, which typically require a lower subsidy from the carrier than the iPhone models.
That diversification was also evident this week as Amazon.com got in on the alternative channel hype this week announcing it would be offering Samsung’s strong selling Galaxy S3 device from Verizon Wireless, AT&T Mobility and Sprint Nextel for $99, or roughly half of its regular selling price. That price would also seem to be about half of what the latest iPhone is expected to sell for, or could be in line with expected new pricing for the current iPhone 4S model once the new iteration launches.
One uncertainty in the iPhone space is how smaller operators will be included in the announcement. A number of regional carriers came online this year to offer the iPhone 4S model, many at a lower price point than their larger rivals. Also, some prepaid operators also began offering the iPhone 4S at or near full retail price points. If those carriers are prevented from having immediate access to the latest iPhone model in time for the holiday shopping season, the customer stabilization they witnessed from being able to offer the 4S model could deteriorate through the end of the year.
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