AT&T/T-Mobile: What does it mean for the smartphone OS landscape?

Ramon Llamas is a senior research analyst with IDC's Mobile Devices Technology and Trends team. The United States mobile phone market is still abuzz over AT&T announcing its intentions to acquire T-Mobile USA. While it is still at least a year away until this acquisition becomes finalized, it's not too early to start thinking about what this could mean later on for smartphone vendors and operating systems involved with the two companies. Handset redundancy is to be expected and some vendors may end up experiencing smaller shipment volumes than before. But will it be that way for everyone?

AT&T has enjoyed a long history with smartphones, being one of the first carriers to offer such a device in the United States. It has enjoyed terrific success with the Apple iPhone since 2007, has had exclusive rights to multiple smartphone models, and has offered smartphones running on each of the major operating systems. Moreover, AT&T has a strong presence among enterprise customers in addition to its large consumer base. T-Mobile's list of accomplishments in the smartphone space is equally impressive: it was the first carrier worldwide to offer an Android-powered smartphone (the T-Mobile G1 in 2008), has a strong history with Android smartphones, and has likewise had exclusive rights to multiple smartphone models.  

Let's take a look at how this acquisition can affect their smartphone offerings one operating system at a time.

Android

AT&T only recently launched its Android campaign, but has since become a major proponent with high-end devices (Samsung Captivate), enterprise devices (Motorola Atrix 4G), and mass-market (HTC Inspire 4G and multiple Motorola models). By the same token, T-Mobile has a deep portfolio from many of the same vendors. Offering all these Android-powered smartphones from the same vendors if and when the acquisition goes through will not be sustainable, and any redundancies will most likely be eliminated. Samsung (with two Galaxy S smartphones at T-Mobile and one at AT&T) and Motorola (with the Charm, CLIQ, CLIQ 2, and DEFY at T-Mobile and the Atrix 4G, Bravo, Flipside, and Flipout at AT&T) could potentially shed some models in the process. In addition, T-Mobile's self-branded smartphones will be phased out, most likely in favor of HTC's own brand.

T-Mobile's long history with Android smartphones can play a strong role in the new company when mapping out an Android strategy. Android has largely been the cornerstone of its own smartphone strategy, and in addition to working with many of the same vendors as AT&T, T-Mobile also brings experience with other vendors, namely Huawei and LG Electronics. Furthermore, T-Mobile's experience with Huawei should bear close observation as the Chinese vendor has set its sights on the United States smartphone market.

Finally, both companies have experience bringing Android smartphones to the mass market, an area that IDC expects to help fuel growth for Android and the smartphone market in general. As vendors become more active in this segment, the new company will be well-heeled to meet the coming demand. 

BlackBerry

In the past, AT&T and T-Mobile offered many of the same models, including the BlackBerry Curve 3G 9300 and the BlackBerry Curve 8520 today. AT&T has offered more models, spanning the mid-tier and high-end while T-Mobile has been more selective. Post-acquisition, any redundancies would likely be eliminated, and potentially dampen overall volumes for Research In Motion. But what could help BlackBerry is AT&T's experience among enterprise customers that could be leveraged towards T-Mobile's enterprise customers. BlackBerry remains the leading enterprise smartphone in the United States, and would be a likely solution in its strategy. As a result, BlackBerry stands to gain from this new relationship.

Apple

Ever since the introduction of the Apple iPhone at AT&T in 2007, fanboys and fangirls have jailbroken iPhones to run on competing networks. In the United States, that has meant running the Apple iPhone on T-Mobile's network, to take advantage of lower prices and available network capacity. The acquisition will make jailbreaking a thing of the past, and the Apple iPhone would be available officially to T-Mobile customers. This opens up a new audience for Apple to court and capture.

Symbian

Symbian has enjoyed a presence at both carriers, but not a very broad or deep one. By the time the acquisition gets approved in 2012 at the earliest, it is unlikely Symbian will have much of a presence or impact in the United States.

Windows Phone

Windows Phone just got started towards the end of last year in the United States. Both carriers were among the first worldwide to offer Windows Phone devices, have no duplicate models between them, and more are on the way. Where it gets interesting is when Nokia offers its own Windows Phone devices, most likely starting in 2012. The company has had a relationship at both carriers with its smartphones, but not a very deep one. As Nokia CEO Stephen Elop has made smartphones and the United States market top priorities, Windows Phone could get a boost. But, it will depend on how well Nokia can sell its new devices to the new AT&T.

webOS

T-Mobile was the only major carrier in the United States not to offer a webOS device. AT&T, meanwhile, has offered the Pixi Plus and the Pre Plus. Assuming that AT&T will once again carry webOS-powered smartphones (the specs for the forthcoming HP Veer indicate HSDPA/HSUPA connectivity; nothing listed as of yet for the Pre3), the company will likewise offer webOS-powered smartphones to more customers at T-Mobile. What remains to be seen is how webOS will be promoted against an increasingly crowded market.

For every merger and acquisition, there are inevitable changes to be expected and redundancies to be eliminated. If this acquisition goes through, the resulting company will become a telecommunications powerhouse in terms of subscribers and coverage. At the same time, many of the same opportunities and challenges will still apply. Smartphones still present the top priority and opportunity for all carriers, so it will be interesting how the new company will position its portfolio, its services, its pricing, and a myriad of other concerns around them.

Ramon Llamas is a senior research analyst with IDC's Mobile Devices Technology and Trends team. In his role, Llamas tracks the quarterly results of the leading and emerging mobile device vendors, and uses the data to forecast the short-term and long-term direction of the mobile device market, and how it affects handset vendors, carriers and customers. He recently released his worldwide mobile phone and smartphone 2010 - 2014 forecasts, as well as a worldwide forecast of the mobile phone touchscreen market. In addition to being featured in FierceWireless, Llamas has been featured on Bloomberg Radio, National Public Radio, and quoted in Investor's Business Daily, the New York Times, and the Wall Street Journal. Llamas can be reached at [email protected].

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