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Summary:

Of those people that purchased the new Apple 3G iPhone this summer, some 30 percent of them defected to AT&T from other networks, according to a report out today from analysis firm The NPD Group.

Of those people that purchased the new Apple 3G iPhone this summer, some 30 percent of them defected to AT&T from other networks, according to a report out today from analysis firm The NPD Group. With about 23 percent of people switching carriers between June and August, that’s a lot of churn, but since two-thirds of the AT&T iPhone newcomers came from Verizon (47 percent) or Sprint (19 percent), both of whom have good 3G networks, my guess is defectors were seduced by getting comparable speeds on a hot phone now available at a reasonable price.

When the iPhone launched on the pokey EDGE network last year, the Apple faithful flocked to the device, but the slow network triggered a flood of complaints. The newer version launched in June (and went on sale in July) with a lower price tag and faster speeds. I imagine a mix of the two is what tempted those on the fence, and made the iPhone 3G the top-selling smartphone during the summer months, according to NPD. It was followed by the BlackBerry Curve, BlackBerry Pearl and the Palm Centro.

That is mostly good news for consumers, who are making clear to carriers that network quality and ability to get online are important to them. Now that carriers recognize how much consumers value the 3G experience, expect to see more phones optimized for web surfing — and more network upgrades.  However, the price sensitivity means that carriers aren’t likely to abandon the subsidized handset model anytime soon, which gives rise to evils like two-year contracts and high termination fees. This might feel bitterly ironic to those consumers who held off on the iPhone for a year because they were waiting for a better network. So far, many find the actual AT&T network and iPhone experience disappointing.

  1. You hit the nail on the head with your points in this post Stacey.

    Long live fast, reliable networks!

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  2. The big surprise to me was the large number of VZW customers moving to ATT. I was sure the Sprint number would have been the bigger of the two since we are always reading about the large subscriber losses each quarter @ Sprint. But Sprint is THE low cost data provider even if their customer service stinks!

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  3. [...] Om Malik, Tuesday, October 7, 2008 at 9:44 PM PT Comments (0) Verizon Wireless and its partner Vodafone Group are will soon start selling BlackBerry Storm, a touch screen smart phone to customers in the U.S., Europe, India, Australia and New Zealand, the companies announced today. While the companies didn’t announce a specific date and talked about making it available in “fall,” it shouldn’t come as a surprise if the device hits the market real soon. Verizon is getting clobbered by iPhone, according to some estimates.  [...]

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  4. [...] reached 2.4 million during the third quarter, and 40 percent of those iPhones were sold to new subscribers who activated on the AT&T network. And despite what analysts say, AT&T also seems on track to reach 1 million U-verse subscribers [...]

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  5. [...] reached 2.4 million during the third quarter, and 40 percent of those iPhones were sold to new subscribers who activated on the AT&T network. And despite what analysts say, AT&T also seems on track to reach 1 million U-verse subscribers [...]

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  6. [...] debt gives Sprint some breathing room while it tries to stem the loss of its customers. Of those that left the carrier in the most recent quarter, 1.1 million were high-value, post-paid customers. the Sprint also said it expected more customers [...]

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  7. [...] AT&T’s gains that came via its exclusive deal for the iPhone, it looks like folks weren’t willing to switch carriers in order to be the first to get their [...]

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