A lot of us iPhone fans have been complaining about the high monthly cost of at&t’s wireless service for iPhone. The device may have been heavily subsidized, but you still end up paying a lot of money for the wireless service (over 24 months). Many industry insiders are now reporting that at&t may be ready to drop its wireless prices by $10 to appeal to recession-wary segment of the market. at&t has come under severe pressure from Apple to step up its game and fight off Verizon. We have been hearing all kinds of rumors about a possible partnership between Apple and Verizon. at&t has the exclusive rights to iPhone. But, nothing is for certain, which could be the top reason behind at&t cutting its margins by about 15%.
Apple is planning big things for iPhone. It has already seen Blackberry outsell iPhone, which is a strong indication that Apple needs to reach out to other wireless carriers to increase its reach in the smart-phone market. By reducing its wireless monthly fees, at&t is banking on two things. For starters, it’s hoping to get more people to sign up for an iPhone contract. At the same time, the more at&t brings to the table, the better chance it may have of keeping iPhone exclusivity for another year (which at&t has been holding out for all along).
The problem is, there are many folks who just don’t trust at&t’s wireless service. You can’t get these people to adopt the iPhone as long as the device is not available on other networks. Apple will inevitably be forced to get other network carriers on board if it wants to grow the iPhone market. Many have argued that it should create a different iPhone line to keep at&t happy as well. I am not sure that will work for at&t. At the same time, I am not sure at&t has enough bargaining power to keep Apple from trying other network carriers. The iPhone is expanding fast, and there is a limit to how many new customers at&t can sign up by dropping its wireless prices. But you won’t hear me complaining about future wireless fee drops. Now if at&t would just reduce the contract length by 50%…
Your take: does at&t have a chance to keep Apple from trying other carriers?