Verizon Wireless' Strigl Rattles Saber, Says iPhone Killer In The Wings - InformationWeek

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5/23/2007
10:11 AM
Eric Ogren
Eric Ogren
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Verizon Wireless' Strigl Rattles Saber, Says iPhone Killer In The Wings

No, Denny Strigl wasn't talking about T-Mobile's new smartphone. Verizon Wireless' COO recently said in an interview that Verizon is preparing to battle the iPhone with a product it will release later this summer. He even went so far as to take a potshot at AT&T's network, saying, "The is

No, Denny Strigl wasn't talking about T-Mobile's new smartphone. Verizon Wireless' COO recently said in an interview that Verizon is preparing to battle the iPhone with a product it will release later this summer. He even went so far as to take a potshot at AT&T's network, saying, "The issue is not the Apple-ness of the iPhone itself, but with the cellular network that it is running on." Will the war for new customers and growth in the cell phone industry be waged -- and won -- by providing the best devices, or the best service?I am sure each wireless network operator would argue that the answer is a combination of both. Provide compelling devices on a great network, and customers will come in droves. And they'll stay. But if there's one thing consistent about Verizon Wireless' advertising campaigns, it's that the network and service matter most. The billboards splattered all over the metropolitan NYC area stating such are unavoidable. I stared at "the Verizon Guy" every day on my bus ride into the city. What words were next to him? "Most Reliable Network."

As growth in the cell phone industry begins to cool off, though, network operators will have to steal customers from one another. Market saturation has already reached about 78%. AT&T wasn't shy about its plans to steal other customers. At the press conference held at CES in January, the AT&T (then Cingular) spokesperson quite candidly said AT&T expects people to abandon their current carriers and join AT&T so they can get the iPhone.

Adding hot new products like the iPhone to its roster of devices is one way to attract customers for the short term. Keeping customers for the long term is a matter of providing good, consistent service once they're signed up. The major network operators have been poking at one another for the better part of a year, each claiming theirs is the best, the biggest, the baddest, No. 1, and so on.

Whatever the quality of their networks, Verizon, Sprint, and T-Mobile have to respond to the iPhone with something, anything, because none of them will have the chance to sell the iPhone until 2012.

Yep, that's right. According to USA Today, the iPhone will only be available from AT&T for the next five years. That's a heck of contract. In fact, Apple is not even allowed to develop a CDMA version of the iPhone during that five-year period. That's intense. No other phone has had such a lengthy distribution contract.

Strigl told USA Today that Verizon's answer to the iPhone is on its way. He said, "We do have a very good response in the mill. You'll see that from us in the late summer." Interestingly, LG is set to announce its new flagship device for Verizon later this summer. Coincidence? You decide.

Having the iPhone (which, by the way, is an unproven product) in its portfolio will likely be a good thing for AT&T in the short run. I wouldn't be surprised if 1 million people buy the thing before the end of the year. How many of them will stay with AT&T after their lengthy contracts are up, though, is another question.

In the meantime, the other three major network operators will have to employ a strong set of tactical maneuvers to fend off the iPhone. They will have to release devices that are exciting enough to convince people to upgrade, rather than cancel contracts and defect. What cell phone manufacturers are going to step up to the plate and deliver?

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