Tuesday, December 15, 2015

AT&T Scrambles to React to Apple Leasing Program

AT&T continues to take one step forward, three leaps back. After mounting an unpopular and misguided effort to get rid of subsidized phones (particularly those pesky and expensive iPhones), AT&T is now forced to offer extra perks to get and keep customers, like it's recent 2 for 1 deal (which they only reluctantly admit includes iPhones). Why is AT&T scrambling, other than its lack of subsidized phones gives customers little reason to stay with them? They're scrambling because Apple's own iPhone leasing/upgrade program is a huge success:

This has some pretty huge long term effects, because all of Apple's leased phones are unlocked, meaning customers can ditch AT&T anytime they want, if they even bother to sign up with them in the first place. Customers buying iPhones online and in Apple stores means they're more likely to go with the carrier that offers the cheapest data rates, something AT&T never does.

You see, those rocket scientists at AT&T forgot the whole reason they were subsidizing iPhones was to keep people locked in. Once they took away the incentives, why wouldn't people flock to Apple, who they trust a lot more than AT&? If this becomes a trend, AT&T can not only expect less iPhone subscribers, but also less foot traffic in their stores. A really bad combination.

But don't worry, AT&T bought into the satellite TV business!  Just in time for everyone to cut the cord on expensive TV subscription packages.

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