Why AT&T Is Spending More on Lumia Launch Than It Did on iPhone
Windows Phone Will get $150 Million as Carrier Seeks to Fill the Void Created After Rivals Got Their Hands on Apple's Still-Hot Handset — Get ready for another big smartphone campaign. For AT&T, it'll be even bigger than the one for iPhone.
Context & Ripple Effects
The Lumia 900 push is the payoff of a bet that started well before this week: Microsoft paid more than half a billion dollars in 2010 to jump-start Windows Phone, and Nokia followed on April 2 with a US advertising campaign explicitly taking on the iPhone. What has changed is the carrier's role — back in 2009 AT&T's leadership was still fighting to keep the iPhone exclusive, and now the same company is putting $150 million behind Microsoft and Nokia instead.
First-order effects
- AT&T confirms the Lumia 900 launch is its biggest product introduction ever, exceeding even its own iPhone campaigns — an unprecedented level of carrier marketing muscle for a third-platform handset.
- Nokia's launch week is undercut by execution problems: despite the $150M push, the Lumia 900 was reported hard to buy in New York on release day, so demand generated by advertising risks meeting empty shelves.
Second-order effects
- With Verizon and Sprint now selling the iPhone, AT&T can no longer differentiate on Apple exclusivity — spending big on Windows Phone is its answer, and if the Lumia sells, rival carriers face pressure to match the investment rather than cede the third slot.
- Microsoft and Nokia get a template for future launches: vendor money (Microsoft's 2010 fund) plus carrier money (AT&T's campaign) stacked together becomes the required price of entry against iOS and Android scale.
Third-order effects
- If carrier-scale marketing can genuinely seed a third ecosystem, US smartphone retail shifts from a two-platform contest decided by handset makers toward one where carriers pick which platform gets shelf space and ad dollars.
- A rumored analyst downgrade citing the prospect of a carrier revolt against iPhone subsidies points to the underlying tension: as subsidies strain carrier margins, carriers have both motive and now demonstrated means to promote alternatives to Apple.
The trend: As iPhone exclusivity ends, US carriers are deploying their own marketing budgets to cultivate a third smartphone ecosystem alongside iOS and Android.