Printed from http://www.electronista.com

AT&T: iPhone greases branding wheel

updated 04:30 pm EDT, Mon May 7, 2007

ATT on iPhone Branding

AT&T is banking on the iPhone as the ticket to saving its rocky switch from Cingular to AT&T, according to observers of the provider's latest investment gathering. Analysts from UBS Investment Research have noted that AT&T blames at least some of its poor results for the opening quarter of 2007 on the awkwardness of the change in name, which has many users still assuming the Cingular title. The Apple device is seen by AT&T as a "branding event" that will cement the name in people's minds, says UBS.

Contributing to the issue has been a reluctance to brand phones with the new label. The carrier has so far continued to label even higher-profile phones with its new name, showing some phones such as the LG CU500v with AT&T branding while releasing them as Cingular devices.

Also gleaned from the meeting is the belief that initial announcements by Apple and AT&T on the lack of subsidies are correct: the iPhone isn't likely to be discounted by AT&T and may even turn a small profit for the company at retail, the report notes. Apple's portion of the sale, however, might actually hurt AT&T with existing subscribers since most of the profit would only come from service plans for new users.

Though full details of the contract between AT&T and Apple remain a secret, UBS believes such terms could create a genuine problem for the former unless the profit-taking changes for customers trading up versus new subscribers. The deal might also have some built-in flexibility that could alter profit based on the split between new and old subscribers. [via GigaOM]



By Electronista Staff
Post tools:

TAGS :

toggle

Comments

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    0

    ah.

    "The Apple device is seen by AT&T as a "branding event" that will cement the name in people's minds"

    And that's why they launched the first batch of iPhone-related material with "Cingular" all over the screenshots etc.? :-)

  1. Hobeaux

    Junior Member

    Joined: Mar 2002

    0

    yes, as a matter of fact

    the AT&T and Cingular merger hadn't been announced at the time the images were created. with the shipping of the iPhone exclusively on AT&T it will solidify the new brand by associating the new name with the high-profile phone.

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    0

    No, as a matter of *true*

    Hobeaux, your facts are wrong. The AT&T and Cingular has been announced a year and a half (!) ago.

    On 11/20/2005, USA Today reports that "SBC, which closed its merger with AT&T on Friday, plans to sell Cingular Wireless under the fabled AT&T name".

    Source: http://www.usatoday.com/tech/news/techpolicy/business/2005-11-20-cingular-att_x.htm

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    0

    sorry

    Couple of words are missing from my previous post. Subject should have been "no, as a matter of *true* fact", but in my excitement I overlooked the 25-char-limit. Then, it should have said "The AT&T and Cingular merger has been announced...". But I guess you figured that already. :)

  1. MacScientist

    Junior Member

    Joined: Feb 2000

    0

    re: No, as a matter ...

    Hobeaux, your facts are wrong. The AT&T and Cingular has been announced a year and a half (!) ago. ...

    It is more complicated than that. Cingular bought AT&T Wireless several years ago. However, Cingular was a partnership between SBC and BellSouth, of which SBC owned 60%.

    After SBC bought the old AT&T (aka AT&T Long Lines), it changed its name to AT&T and became "new AT&T." This was the case when AT&T announced that it would market all of its services including wireless under the AT&T banner. However, Cingular still existed as Cingular because AT&T owned only 60% of it. Cingular would still operate as Cingular in many locations outside AT&T's local service area.

    This all changed when [the new] AT&T bought BellSouth. With this purchase, AT&T acquired the remaining 40% of Cingular. As soon as the BellSouth buyout was approved, AT&T moved to change the names of Cingular and BellSouth to AT&T. However, this process had only just begun when Apple introduced the iPhone.

  1. bfalchuk

    Fresh-Faced Recruit

    Joined: Jul 2003

    0

    Terribly written

    So much in this article makes no sense. "AT&T and may even turn a small profit for the company at retail, the report notes. Apple's portion of the sale, however, might actually hurt AT&T with existing subscribers since most of the profit would only come from service plans for new users"

    OK, so if AT&T makes a profit on the device sale, and up-sells existing users, hence earning even more, how exactly does it hurt them?

    There are too many examples of this in the above article. Really bad reporting job.

  1. lujo

    Fresh-Faced Recruit

    Joined: Dec 2001

    0

    AT&T needs to communicate

    AT&T's"rocky switch" is purely the result of bad management. As a subscriber of Cingular and a frequent news reader, I didn't realize the change until all the iPhone news. AT&T/Cingular has done a TERRIBLE job of communcating the change--to customers or the media. I had a bank that was bought out by Wachovia, and Wachovia did a very good job of letting its customers know all about the change. Covering bad management with a good product is a risky way to do business, and frankly, shows SBC may be good at mergers and acquisitions but is terrible at marketing and customer service.

  1. UberFu

    Fresh-Faced Recruit

    Joined: Oct 2002

    0

    stupid article

    I am a Cingular Customer_

    Yeah - I can see the confusion_ When I turn on my TV and see a Cingular Commercial_

    When in the last Apple Keynote - Steve is introducing the President of Cingular_ And they talk about how Apple and Cingular are conducting business_

    When I goto www.cingular.com to handle something with my account_

    When I receive my Mobile Phone Bill and the return Address says Cingular_

    Yeah - if I squint my eyes real tight and tilt my head slightly and turn the lighting down real low and maybe I were a little drunk - I might be able see that Cingular is now AT&T_ Or not_

  1. himself

    Mac Elite

    Joined: Jan 2002

    0

    The Cingular Brand

    ...is probably the strongest and most well executed and integrated brand in the cellular industry, at least in the US. It makes sense for AT&T to try and consolidate all of its services under on name, but it is taking a big risk in dropping the Cingular name. It could very well backfire, and it looks like it may. I don't expect the iPhone to be able to bail out AT&A née Cingular if the transition doesn't goe well.

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

toggle

Most Popular

Sponsor

Recent Reviews

Kenu Airframe Plus

Simple, stylish and effective, the Kenu Airframe + portable car mount is the latest addition to Kenu's lineup. Released earlier this y ...

Plantronics Rig Surround 7.1 headset

Trying to capture the true soundscape of video games can be a daunting task. Looking to surround-sound home theater options, users hav ...

Adesso Compagno X Bluetooth keyboard

The shift from typing on physical keyboards to digital versions on smartphones and tablets hasn't been an easy for many consumers. Fro ...

Sponsor

toggle

Most Commented

 
toggle

Popular News