No matter how you look at it or who you ask, when the sweet deal that AT&T currently has on the iPhone runs its course, as it inevitably will, the wireless provider is going to take a very big hit.

The recent statements by Pali Research are typical of the general belief, though considerably more professionally phrased. Pali believes that when the end comes, it could be devastating for AT&T, leading to a sudden stop of growth and perhaps even some shrinkage in clientele. The research company concludes that at the end of the monopoly that they have held on the iPhone, customers will immediately head for greener pastures, and the greenest pasture of all is Verizon, according an LA Times story.

Walter Piecyk, head researcher at Pali, said, “A basic premise of our recently initiated buy rating on Verizon and sell rating on AT&T is our belief that as the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network. We expect AT&T Wireless net subscriber additions to fall to less than 1 million in 2010 from more than 4 million in 2008.”

That is, of course, a tremendous drop in sales. As evidence, Piecyk submits the recent poll by Wired magazine in which they asked their readers to do a speed test with their phones and to report that speed along with which network they were using. How did AT&T fare in this performance test? Well, they did not win; Verizon won, with an average download speed of 1,940 kbps. Nor were they second or third, the spots occupied by T-Mobile and Sprint. AT&T came in fourth with an average download speed of 900 kbps. That is pretty dismal performance.

There have even been reports that the sparse nature of AT&T’s infrastructure is a leading cause of fast battery drain for iPhone users. The wireless carrier has admitted that this is likely, but still has not done a lot to make its network denser and more reliable. The world seems to agree; AT&T should not have an iPhone monopoly. Nor should they let the door hit them in the tukis on their way out the door.

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Entry was posted on Friday, July 17th, 2009 at 3:14 pm under Internet, Opinion, iPhone.  Print This Post

Read more entries by Michael W. Jones.
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