iPhone exclusivity may come to an end – AT&T executives

Created by hasan.kamal under iPhone

AT&T Mobility CEO Ralph de la Vega released a rather controversial yet understandable statement regarding the exclusivity of the iPhone to AT&T’s network. He mentioned that the portfolio of phones and services extend beyond Apple’s iPhone. Surprisingly, it makes sense. Apple is still a very new entrant into the cellphone market in comparison to industry giants such as Nokia, Samsung, LG, Sony-Ericsson, and other Taiwanese competitors. Apple’s cult-like following and design elements are what have been the primary success factors for the phone itself.

Ralph’s statements are not necessarily shocking when placed in light of the new phones that have been developed to compete with the iPhone. The Palm Pre and HTC’s offerings alone offer technologies that are similar to the iPhone at price points that are extremely competitive. Apple has yet to develop a product that will overshadow the success of the iPhone. Firmware upgrades and improved wireless connectivity will only go so far in dealing with the competition that the iPhone faces. In addition to this, the exclusivity of the iPhone can only extend till the network supports the technology requirements of the existing AT&T network. With networks moving towards 5G capabilities, AT&T clearly needs to diversify to support the new phones that are being offered by competitors. As open technology standards move towards a standardized set of features on phones, Apple needs to remain ahead of the curve through it research and development.

Apple’s fortunes have been primarily focused on a cult-like fan following along with a matchless integration of the App Store and iTunes. Google’s recent capital expenditure on specialized technology firms which include SEO and social marketing specialists is indicative of revamping the Android Marketplace. With such firms onboard to revamp and develop new technologies, it seems that the Android Marketplace will soon be able to compete more efficiently and effectively in comparison to the App Store. This is a serious factor for AT&T to consider when the iPhone begins to saturate the smartphone market. By remaining excessively exclusive to Apple, AT&T may narrow its market unnecessarily missing out on opportunities to challenge other service providers in the United States. Resultantly, AT&T should begin revamping its product lines to address customers that require needs that are unable to be fulfilled by the iPhone.

Apple’s primary focus has always been a premium product priced at a hefty premium. Considering that smartphones now have become a necessity for most consumers, many consumers are still looking for bargains online for phones and services. The pricing strategy of AT&T and Apple may force potentially lucrative consumers away from their product lines and move towards other service providers. AT&T should look to address problem by maintaining a fairly diverse product line that covers the new and growing OS platforms.

The Google-Verizon alliance is a living example of how companies can easily challenge established giants. With a network capability that is significantly stronger than AT&T and a loyal customer base, it seems that Verizon and Google are more than poised to take over the smartphone market. Coupled with significant capital expenditure that Google has done in the recent weeks along with the Sprint-Palm collaboration, Apple’s days are numbered. Unless rapid product development and successful leverage of the existing brand image are the only ways that Apple can maintain its leadership in the smartphone arena. AT&T also needs to capitalize on this leverage and build on the impetus to promote its brand amongst consumers and handset manufacturers. By tapping into new markets, both Apple and AT&T can easily capture new market segments and remain competitive amongst other service providers.

Do you think that AT&T should start looking at other manufacturers and platforms now or should they wait till the iPhone reaches market saturation? Is AT&T in a strong enough position to attract handset manufacturers or should it wait to see the impact of the Google-Verizon alliance on its’ product lines? Leave your comments or thoughts below.