Description: Google Inc. may lose business as Verizon Wireless starts selling Apple Inc.’s iPhone, giving the carrier’s customers a new alternative to smartphones running the Android operating system.
Source: CNN.com & Businessweek.com
Date: Jan 11 , 2011
Verizon said today it will offer Apple’s iPhone 4 as of Feb. 10, and begin taking orders a week earlier. The Verizon iPhone may cannibalize about 2 million Android shipments a year, said Dan Hays, partner at consulting firm PRTM. Gartner Inc. said 20.5 million Android phones were sold in the third quarter.
“A lot of people who bought Android phones were buying it in lieu of an iPhone because they couldn’t get one on the Verizon network,” said Charlie Wolf, a Needham & Co. analyst in New York. Read rest of story
Questions for discussion:
- Who are the winners and losers in iphones move to another supplier?
- Should AT&T be worried about losing thier monopoly on the iphone in the U.S.?
- Do you see the smart phone industry expanding or contracting in the future as far as the number of players that compete in this industry? Why?
Bretton MacDonald
I think the smartphone industry will most likely stay at a stand still, or slightly contract in the future. I know most people probably believe that the ever popular smartphone industry will expand but I believe that the iPhone, Blackberry and android have such marketpower that any other competition coming into the industry will just become extinct. Its like in the mp3 world, Ipods have almost complete market power so therefore very few companies dont even bother to put in their own product. The top three smartphones mentioned above all have their unique features that consumers love about them so in order for more companies to throw their phone into the ring then they would have to come up with something that will blow away consumers. For example, the blackberry has its BBM which appeals to many people, the Android has super fast internet browsing and its a great touch screen texting features and the iPhone has a big advantage with all the applications that are accessible.
Russ Sommerfeldt
As Verizon adopts the iPhone into their smartphone arsenal there will be some noticeable changes to the mobile phone market in the U.S i believe. Not only has this day been a long time coming for Verizon customers, I also believe many customers currently serviced by AT&T will switch to Verizon. If you have ever lived in the United States you may know that everyone knows about AT&T, but not a lot of customers are happy with their services. I think this will affect AT&T in a big way, especially if Verizon offers to pay out existing AT&T customer contracts to steal away a larger customer base.
I think that AT&T should be very worried about their current monopoly and plan to target consumers in other ways. The article did mention that Motorola will be showcasing their new gadget through AT&T so that may help. There always seems to be a craze for the latest smart-phones so that may help AT&T’s deteriorating monopoly.
I am no expert as far as the smart phone industry is concerned, but I can only imagine it to grow. Remember the brick phones about 15 years ago now look where we are. In another 15 who knows where we will be? However, I will say that a smartphone can only be so big or so small before they lose their practicality in my opinion. The expansion in this industry will be driven by competition. Every company will want to out perform the next company, and by this time there will be too many phones to choose from, and everyone will start buying bag phones again!
Dustin
One of the winners would be the public. If they are with Verizon they will have the i-phone now as a possible option for a sell phone. The i-phone is very popular and in great demand. In the article they say that perhaps some poeple still in a contract with a differnt phone will pay the rest of the contract out and then switch over to the i-phone as soon as the chance is available. another is Verizon. Howe says it would be great if their costomers would switch over to the new smart phones becuase the smart phone users pay alot more.
A possible loser is AT&T. They have been cutting the cost of the i-phone to keep people from switching over to Verizon. which i think is funny that they are just cutting the price down now that there is competion. but before they were taking advantage of thier customers. If i was a customer I wouldn’t be happy about that, and as a result might switch for the reason alone. AT&T should be very worried about losing their monopoly. They will have to make their phone plans a lot more enticing for people to stay with them, or make some other changes to keep their customers.
I see the smart phone industry expanding. There is so much interest and demand for them. People will be chomping at the bit to get them if they dont already have them. If you dont have one your missing out.
Jatinder Aulakh
I-phones moving to another supplier will make consumers the winner. Because I-phones are so popular at the moment and people wait hours in lines to get the new updated version of the i-phone. AT&T should be worried about losing monopoly on the i-phone in the U.S., because their is a high demand for i-phones and consumers will switch to Verizon to get what they want. Consumers always go for the better and cheaper deals they can find when it comes to saving money, especially students.
I think that the smart phone industry is going to expand greatly in the future. Smart phones keep upgrading and coming up with better ideas on what the new generation would prefer. Smart phones are in high demand and I believe they will always be in high demand, because its a technology that will not fail instead just keep improving.
Landon
I do not think that AT&T should be worried about losing the monopoly on the IPhone’s. They held a competitive advantage by having a monopoly, but as we all know, it is only a matter of time before another competitor will catch up. AT&T should be worrying about what it is going to do next, and by increasing the Android promotions they are trying to shift the loss of the IPhone monopoly with an increase in Android sales. I think this is a good strategy, since Motorola is coming out with a new dual core processor phone running the Android OS, Kuittinen said that this will make up for any decreased IPhone sales. AT&T can also focus within its own network, to try and increase the number of smartphone users, up from 38%. It is all in how and what they market that matters now, there are other options which they can pursue despite the fact they lost the IPhone monopoly. In the end it is up to the customer, it is their choice of which carrier they want, and what kind of phone they want.
Will the smartphone industry expand or contract in regard to the number of players competing? In regards to the OS players, I would say the number of players will not expand or contract at the time. The big four OS, Blackberry, IPhone, Android, Windows, have such great market share that this area will be difficult to penetrate for a new up-and-comer. It is not impossible by any means, but currently I can’t think of any company’s out there that are big enough who have the resources necessary to compete with these four. Also, we have the smartphone manufacturers as players, the number of players in this category I can see expanding. Since smartphone’s are so popular, any manufacturer who does not already have a smartphone will likely come out with one, or other electronic device manufacturer’s may decide to try and break into the smartphone market. Technology is always improving, and so too will the company’s who make use of the technology. Another player in the smartphone industry are the carrier’s, the number of players in this category I think has the potential to expand and most likely will. We never used to have carrier’s such as Fido, Virgin Mobile, and Wind Mobile. So yes, the number of carriers out there will I think expand.
selenanova759
Well it is a similiar story as when the Iphone opened up to the Telus market after previously being an option only to Rogers users in Canada. Apple likes to do this at first and maybe it is just to create a stronger desire in those you cant have it (assuming they are more loyal to their carrier than their device). To be completely honest, I could have cared less about smartphones… until Telus got a hold of Apple. And it didnt take much to convince me once this did happen. However I dont think AT&T should be too worried. For the most part, people ARE more loyal to their carrier than they are to their device, and are only more likely to switch devices when their carrier gets the device, which nearly always happens because competition is just too great. Monopolies never last too long in a capitalist econommy.
This applies to the future variety in smartphones as well. Where there are customer’s who are not completely satisfied, their is room for a better device. I know very few users who are totally satisfied with their blackberry, iphone, or android, and different types of customers like different types of characteristics adapted to their business or personal use. Additonally, with new smartphones, technologies as well as older technologies becoming more widely available, it opens up the market for lower cost carriers to get into the smartphone game too. It’s just business.
Ifeoma Moseri
The consumers have to be the winners. Plus I think Apple really screwed up in enclosing themselves to AT&T for so long. It allowed Android to gain a foothold it may not have done to anywhere near the extent if the iPhone had been multi-carrier right from the start. Android has gathered enough ground and made enough improvements that this news will have less of an impact than it might have done a year or two ago. Android can no longer be considered just a cheap rip-off off, and I can’t see the Verizon iPhone deal having a massive impact on Google’s Android. Verizon has been big backers of Android historically and it’s only normal to think that in the near future they will back Android 100%. I also believe if someone had their heart set on an iPhone in the US previously, they either needed to “settle” for Android or “settle” for AT&T. I’d wager that most people would “settle” for AT&T given that choice, though I could be wrong
Android is doing okay in other developed nations, but it’s the US where they’ve got by far the biggest foothold. Technology is shifting and people are moving along that trend. Android has gained a lot of ground and with heavyweight mobile manufacturers churning out appealing, heavyweight phones (such as the LG Optimus X2, Play station Phone et al) aimed at a variety of price points and target audiences means there’ll continue to be a large market for Android phones.
It’ll be interesting to watch how this unfolds, and it’ll certainly have some impact, but I’d wager that it will have more impact on RIM and others than Android. Android is becoming the order of the day.
I see the smart phone industry expanding as personally I believe when it comes to technology, telephone technology is one area that keeps improving and yields lots of profit. Like Wind Mobile did new players need to enter the market with low prices.
Clayton Varjassy
As iphones move to another supplier I think almost everybody except for AT&T are the winners. I know of a number of people in the States that don’t even use their iphone as their main phone, they consider it their ultra-portable computer, but because AT&T is the only provider for iphones in the states, and iphones have such a big market share, their network is unable to handle the volume and dropped calls/no bars are beyond frequent occurrences. Having more than one provider for the iphone, especially one as big as verizon, will be a huge improvement for many Americans. However, because contracts in the states are only for 2 years, whereas here in Canada they are typically for three years, AT&T may take a huge hit once the bulk of the current generation of iphone4 users contracts run out. So between now and June 2012, I’m sure AT&T will be frantically trying to improve their network so as to keep as many of their current customers as possible. I don’t think they need to focus on promoting a different phone OS to maintain their market share, the majority of smart phone users, be it blackberry, iphone, or android, know what they want. What they need to do is improve their network or users will simply go elsewhere, especially now that they no longer hold the iphone as their wild card.
Ashleigh
The consumers will be the winner in this as Verizon gets the Iphone. They have been waiting for a long time to be able to get this phone with this provider and now that they have the opportunity too, they will probably purchase it and switch companies. AT&T should be worried about losing their monopoly to the US because before it was available consumers were just going for the next best thing waiting for this to happen. Those who are innovators and always want the newest thing will be out there first to get it. There is a very high demand for this product and a lot of consumers will do anything to get their hands on it. Once the Iphone hits Verizon, their consumer base will most likely increase and AT&T will probably decrease as consumers move towards the new and improved product. I think the smartphone will increase in the future because they are always improving and attracting consumers attention on why they are better. At the rate consumers are purchasing them, a lot more companies will begin to offer them to be competitive in the market again
Chelsa
The customers are the winners! Many of Verizon’s customers purchased the Android because they wanted an iphone but could not get one becasue their cellphone provider did not offer that particular product. The losers will be any other telecommunications company who is also selling the iphone. AT&T should be worried about losing their monopoly on the iphone because if another provider is selling the iphone customers who decided to sign a contract with AT&T solely to get an iphone may choose to switch to a different provider. Having more than one provider that sells the iphone is good for consumers. It gives them the ability to choose between different providers. I see the smart phone industry contracting in the future. I think that there will be fewer players because as the technology becomes more advanced and the customer becomes to expect a certain quality of product and service there will be great difficulty trying to get into and stay in this market.
prab22
Iphones moving to another supplier such as Verizon will make this a consumers market for the customers in the United States. AT&T should be worried about losing their monopoly. Now they can’t charge what they want due to high demand they had the customers wallets right in there hand. Now that Verizon is in the game with the Iphone there will still be a great demand for these phones because they are so popular and everyone needs a Smartphone these days but they don’t have to pay premium prices now that there is some competition. Still it will be expensive but not as much when AT&T was the only carrier. I only could see the Smartphone industry expanding these days. Its new technology that just came out last year new phones are being made and I could even see another carrier come out in the States that will follow what Verizon did and start selling the Iphone also. In conclusion there could also be a brand new company such as Microsoft that has a new device that can make the Iphone or even blackberry another victim of the ever changing world of mobile technology.
Brenda Bicharr
In as much as the smart phones are now the most popular things in the world of technology, co9mpanies should not forget that the buyer power is still high, they still have a choice and some kind of preference. The concept of first entry in the business world still applies. This article has a lot of predictions which seem to take about custo9mers as thought the market is controlling them. Let’s say android has exhausted its chances of clients at verison wireless, the clients who will come there for the iphone right now will only be clients who were patient enough to wait for the iphone to come top their service provider because they wanted it that badly. The only thing which is correctly able to happen in this article is that the verison company user who are not yet using Smartphone might and will def trade in for apple…which is quite understandable. But i say again that the knowledge that a consumer will follow the provider is wrong..People have a preference and the sale of smart phone is subject to that preference too.,