Resellers absent from iPhone equation?
I've been writing and reporting on the wireless industry for nearly 15 years. During that time, I've weathered lots of hyped handset launches--the Motorola ROKR and the Nokia N-Gage--to name a few. But nothing even remotely compares to the buzz the iPhone has generated over the past six months.
There's one aspect of this story that I've heard very little about though--perhaps because wireless resellers are an often overlooked but critical part of the industry. How will the iPhone impact the thousands of AT&T resellers that sell AT&T service plans and phones in brick-and-mortar stores and online? Initially only company-owned AT&T stores and Apple stores will be selling the iPhone and it's not clear if resellers will ever have access to the hyped device.
Perhaps resellers don't want to sell the iPhone, but I find that hard to believe since an iPhone purchase requires a two-year contract with AT&T and resellers make money based upon the number of contracts that they sign up. Also, as we learned earlier this week, the iPhone rate plans will range in price from $59.99 to $219.99 and come with an unlimited data package. These are aggressively priced packages that will likely be appealing to consumers, and iPhone buyers are expected to be high-ARPU customers--which is very appealing to resellers and AT&T.
Instead, customers that walk into an AT&T reseller-owned store (which to the consumer are indistinguishable from the corporate-owned stores) are going to be disappointed to find that they can't buy an iPhone. This doesn't sound like a great strategy. If I were a reseller, I would probably quickly tire of trying to convince iPhone-hungry consumers to instead purchase another (and possibly inferior) AT&T music phone.
I'm not convinced the iPhone will be wildly successful--at least not right away. I think it may take a couple more generations of devices for Apple to smooth out any glitches--such as getting the device equipped with HSDPA instead of EDGE so it can actually handle the data-intensive features that Apple has been highlighting in its advertising.
But I do believe the iPhone will challenge the wireless business model. AT&T is clearly sacrificing subscriber control to Apple, a strategy that so far is unheard of in the U.S. wireless market. Does this lack of subscriber control and the inability of the AT&T resellers to be a viable part of this iPhone phenomenon equate to a major shift in the wireless business model? I suspect it does. -Sue
P.S. For all the latest iPhone live coverage, including up-to-the-minute reports and pictures from AT&T retail stores, check out the FierceWireless website beginning at 2 p.m. EST today and continuing with updates throughout the weekend. And if you have any iPhone anecdotes or opinions of your own to share, please write!