The iPhone: A Blessing and a Curse?
Consultant Forrester Research came out with some really interesting data today: Apparently, consumers that switch wireless service providers for hot new devices such as the iPhone come with a risk to carriers. More than 20% end up being likely to switch plans again in the next six months.
The data, based of a survey of about 4,000 Americans, is troubling to say the least. Over the past year, the U.S. wireless market began to be driven in large part by hot new devices. AT&T comes out with a new 3G iPhone? So Sprint Nextel rolls out the Samsung Instinct or Palm Pre. T-Mobile introduces the T-Mobile G1, while Verizon introduces a slew of new touch-screen LG phones. Just look at TV cell-phone service advertising today: It’s all about the phone, and to a much lesser extent about the network.
If Forrester is right, consumers attracted by this advertising may not be the sort that the carriers want. Think about it: A carrier typically spends some $400 spent on marketing to get that subscriber, and it needs at least two years to recoup that cost and to make a profit. If subscribers churn more frequently than that, that cuts into profits. So maybe the subscriber who came to AT&T to buy the iPhone isn’t going to benefit AT&T as much in the long term as previously thought.