17 Percent of Verizon Customers Would Upgrade to iPhone
AT&T's (T) iPhone exclusivity deal hasn't yet expired, nor has Apple (AAPL) announced plans to sell the device through a second U.S. carrier, but that's not stopping analysts from speculating about what might happen when it does.
Context & Ripple Effects
Verizon had already been preparing for a possible iPhone arrival, and an earlier survey had documented Verizon customers’ interest in the device. The 17 percent figure gives that demand a more concrete scale while AT&T’s exclusive U.S. distribution agreement remains in force.
First-order effects
- Verizon gains a quantified indication of pent-up demand among its own subscribers, useful for planning around any future iPhone distribution opportunity.
- AT&T keeps the immediate commercial benefit of exclusivity, since the survey does not alter its existing agreement with Apple.
Second-order effects
- The stated interest raises the value of an additional U.S. carrier channel to Apple while increasing the pressure on AT&T to defend the customer advantage attached to the iPhone.
- Verizon’s handset strategy becomes more exposed to comparison with the iPhone, because a measurable share of its customers says it would upgrade if given access.
Third-order effects
- If carrier-specific iPhone demand continues to register in surveys, handset exclusivity becomes a bargaining lever between Apple and U.S. carriers rather than simply a distribution arrangement.
- The episode points toward competition among carriers being shaped increasingly by access to marquee devices and the subscriber demand those devices can mobilize.
The trend: Pent-up demand for the iPhone is making device exclusivity a central source of bargaining power in U.S. carrier competition.