Who has really been Behind the iPhone success?


Apple sold more than 1.7 million iPhone 4 devices in the first three days of availability  in the U.S., U.K., France, Germany and Japan.  According to Piper Jaffray and  one survey, more than 77%  of  the iPhone 4 were sold in the U.S., were upgrades and thus would not bolster the carrier’s net customer addition results.

It is even more impressive when you consider the initial pre-order system failures, the device shortages, and the fact that half of the family isn’t even available yet. And most impressive may be that those who bought it in the U.S. were willing to sell their souls to AT&T for another two years.

In support of the new iPhone’s flooding its network, AT&T Mobility claims they have  increased capacity of its 3G network in the New York City area. The updates included the addition of new carriers to “nearly all cell sites in Manhattan and in other areas as needed throughout the Bronx, Queens and Brooklyn,” as well as adding a “layer” of precious 850 MHz spectrum to support increased coverage. The carrier has been transitioning portions of its 850 MHz spectrum from its legacy 2G network to its 3G service over the past several years in an attempt to bolster the 3G network’s coverage and capacity. The 3G network originally launched using the carrier’s 1.9 GHz spectrum band.

The New York area along with San Francisco are areas where the carrier has acknowledged its 3G network has suffered in the wake of increased consumer demand for mobile data services.

AT&T Mobility recently launched a pilot Wi-Fi project in Times Square designed to alleviate network capacity issues on its 3G network.

Who should get the credit for the 1.7 m subscribers?

Included in the 1.7 m, there are four other countries  – U.K., France, Germany and Japan, not tied to AT&T that saw the iPhone 4 launch on the same day as the U.S. who took 77% of them.

Given such a stat, if Apple were not tied to At&t,  it is fair to say Apple would have doubled that sales figure.  So, it looks to me , the biggest inhibitor of iPhone growth in the U.S. is AT&T.

I am sure Apple is fully aware of this. Their deal with At&t makes the iPhone their largest source of revenue. If they have to give up those exclusive terms, the subsequent deals with other carriers would likely be less sweet — particularly a Verizon deal, as they have some leverage being the largest carrier in the U.S. and one closely aligning itself with the competing Android platform.

In conclusion, as much as we hate AT&T today, it has been Apple’s savior past 4 years or so. I would go almost as far to say if it wasn’t for AT&T, we might not have had the iPhone we have today, or no iPhone at all.

Apple works on it’s own schedule. It will move beyond AT&T when it thinks it’s ready. It’s frustrating for those on other networks and for those w/ AT&T who want to see the iPhone prosper even more. But modern day Apple has *NEVER* been about marketshare. They’ll brag when they have it, but profit share has been it’s primary thinking.

I don’t doubt Android phones will outnumber iPhones someday, especially when I see those “buy one, get one free” deals on TV every other day. But if my only criteria for picking a product it how popular it is, then I wouldn’t be owning a PowerBook right now. 🙂

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About Elias Shams
I have been a serial entrepreneur in telecom and social media space for past 12 years or so. I hold a M.S. degree in Telecommunication Engineering from the George Washington University and a B.S. degree in Electrical Engineering from the University of Maryland. I’ve lived and worked in many countries and cities including London England, Tehran Iran, Bonn Germany, Paris France, Alicante Spain, Delhi India, and my favorite of all Washington, DC of great US of A. Two of the greatest Washington, DC based companies I worked for and very proud of are Yurie Systems which was sold to Lucent in 1998 for $1.23 B and telezoo.com that I founded in 1999. I am currently the founder and awesomizer @ awesomize.me

11 Responses to Who has really been Behind the iPhone success?

  1. Andy Styler says:

    If anything AT&T hampers its success in the US!

  2. Tony Evers says:

    I bought the first iPhone in France – paid extra to unlock it and used it all over Europe and Russia never with AT&T as provider. Moving to states, had to buy a US iPhone. Service coverage here with AT&T makes the iPhone not very dependable.

  3. whats the website called which allowed you to make this website

  4. Guys you’ve got to think outside of the US borders, the iphone’s success has nothing to do with AT&T. Watch the US sales boom further once it goes beyond AT&T. Tony E, Why did you have to buy another iPhone for the states? Won’t they sell just the plan?

  5. it is neither involved in success…!!

  6. Tony Evers says:

    was told the hardware was not compatible with the service

  7. As I walk around the streets and ride public transport in Australia, most of the phones I see are iPhones (the others tend to stay in pockets / purses). I don’t think AT&T has too much to do with that.

  8. I think iPhone would not reach that success if no operators plans supporting it. Usually the cheapest phone in the mobile shops find his way to the top of the sales bar charts. Selling this device for $99 at some time and the high usability and how simple the interface is, both are strong reasons behind the wide distribution of this linux machine.

    In my countery there are no real plan supporting it. Shops sell it for $1000; I do not think it will reach how is it now on markets selling if for $99.

    Much more features are available into the other OSs. Not the features that support its distribution. And this is one reason to distribute too. It dose not have much features that create allot of question marks over the user head making him as other devices do.

    In conclusion; I see that the high usability, and the operators plans (ATnT and others) are the real reason behind the high distribution of iPhone.

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