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AT&T Reshapes Itself As a Smartphone Carrier

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ref_iphone3g_pairAT&T (s T), the Dallas-based wireless carrier, on Friday began an image makeover, repositioning itself as the leading U.S. smartphone provider and preparing an ad campaign sans its most iconic handset, the iPhone.

“We’ve taken integrated devices mainstream,” AT&T chief marketing officer David Christopher said in a statement, adding that nearly a third of the carrier’s postpaid customers use one. In March, AT&T led its rivals with 11.8 million smartphone users, or 47 percent of all U.S. smartphone customers, the Wall Street Journal reported, citing data from M:Metrics, the mobile research division of analytics firm comScore. That compared to 5.1 million smartphone subscribers for Verizon Wireless (s VZ), 4 million for Sprint (s s) and 3.7 million for T-Mobile.

Along with its Wi-Fi hotspot network and growing number of “quick-messaging” devices, however, AT&T in the release omitted Apple’s (s AAPL) iPhone among a list of smartphones (such as the BlackBerry Bold and Nokia E71x) it offers. The iPhone, which accounted for 73 percent of new subscribers, is also clearly absent from AT&T’s new smartphone ad blitz. Nokia’s E71x (s nok) replaces the Apple handset in the starring role.

Christopher pointed to several reasons for the upsurge in data usage by subscribers. Its smartphone lead could grow even further following Monday’s $2.35 billion purchase of Verizon’s rural wireless spectrum. We asked at the time whether the move was simply a blocking tactic by AT&T to keep rivals at bay.

Although AT&T is touting its lead in postpaid smartphone subscribers, the carrier is just now taking steps to gain a better foothold in the prepaid market, an area where rivals have a head start. A week ago, the carrier announced a $3-per-day plan for those customers not inclined to contracts.

While AT&T understands its exclusive iPhone deal may expire in 2011, it’s not giving up on plans to build a faster network – something Apple appears to want. AT&T is moving forward on an HSPA upgrade, diverging from an LTE network Verizon and others are exploring.iphone

7 Responses to “AT&T Reshapes Itself As a Smartphone Carrier”

  1. AT&T didn’t sesem so reticent about the iPhone when it was earnings announcement time. About half of AT&Ts smartphone numbers are iPhone activations just from the last 3 quarters (2.4 + 1.9 = 1.6).

    In reality, iPhone customers are really Apple’s and have no loyalty to AT&T. It is interesting that when AT&T and Apple wanted to move inventory in advance of the new model, they started offering the iPhone 3G for a $400 premium without an AT&T contract. Typically, in that scenario, the carriers cut the price of the phone to move the inventory. That says alot about how iPhone customers view relative value. If you are interested in more detail, you read here

  2. I’m with Jesse.

    After being a Bellsouth/Cingular/AT&T customer for over 5 years (2 out of contract), I dumped their lousy service for Verizon. Should have jumped ship a long time ago.

  3. Wouldn’t say AT&T is diverging from others with their plans for deploying HSPA. HSPA is a simple upgrade on the radio side where as LTE is a much more extensive change to radio, core (all VoIP) and handsets. AT&T will evolve to LTE but they have more time to move there vs a CDMA carrier who does not have as much steam left with EVDO rev X.

    • Jesse Kopelman

      Hope springs eternal, I suppose. AT&T/Cingular has made its network quality the focus of its marketing since the AT&T Wireless Acquisition in 2004, yet in these past 5 years the actual network quality has continued to lag Verizon. AT&T invests a lot of money on its Network Operations, but has yet extract the same value from this investment as other carriers.