Now that Verizon has the iPhone(s aapl), will I switch? No, for the simple reason that AT&T (s t) has done a good job of making sure that switching would be detrimental to a number of my relationships: with AT&T itself, with other iPhone users, and with business contacts.
Early Termination Fee (ETF)
The whole purpose of the ETF is to keep you as a customer, because the carrier is paying a portion of the phone in order to get your business for two years. $325 for each iPhone pro-rated at $10 each month is a hefty fee to pay just to switch networks. Having been on most networks at one time or another, the differences just don’t seem that great to me where I use my phone, and certainly don’t justify a $325 cancellation fee plus another $200 or more for a new phone. Since I’m not eligible for any of the ETF workarounds, I’d rather wait out my contract and reevaluate at that time.
The exception would be if AT&T is particularly weak and you have directly confirmed that Verizon’s coverage is particularly strong in areas where you use your phone the most. This is the case in a few large cities with high population density, but not in my region of the country.
Relationship With AT&T
Currently, most of my communication services are handled by AT&T through its U-Verse service. This allows me integrated voicemail for both mine and my wife’s accounts, and gives me leverage when I have a problem.
Overall, I’ve actually had very few problems over the years with AT&T, and when I have, it’s generally been resolved pretty well, though more than once I had to tweet to @ATTcustomercare to get things fixed. Relationships with service providers are often prioritized for long-term customers, and the longer I stay with AT&T and the more services I have, the better customer service I’ll get (at least in theory).
It’s all about who you call. In spite of my iPhone usage growing each month, the minutes I use actually go down. Why? So many of my friends, family and business contacts now have iPhones. When I purchased my iPhone 4, I looked at my calling plan and noticed that over half my minutes were used for calling AT&T customers. Logically, then, a switch would incur additional costs for those minutes, though some might be offset by comparable Verizon programs.
AT&T wasn’t dumb about this. The company’s head start on the iPhone party means a huge installed base of AT&T iPhone users. Unless large groups of friends and family switch en masse, isolated Verizon defectors will cost everyone money.
Internet and Voice at the Same Time
Who would want to “surf” and “talk” at the same time? Me! I use my phone for business and I don’t see the point of having a smartphone if it turns dumb whenever you make a call. In particular, when I’m on a long conference call or talking with my mother-in-law, time tends to drag. I’m not as much interested in finding out sports scores as I am in reading the emails, Twitter DMs, and MobileMe updates I’m missing. I also often need to look up something pertinent to the call I’m on while I’m on it, and would dearly miss this ability. Having to repeatedly jump off and call someone back just doesn’t cut it in the business world.
For the casual user, this limitation might be more of an annoyance than anything else (but could take a considerable toll if you and five friends are browsing using the personal hotspot feature when a call comes in). Apple and AT&T’s commercials about being able to order flowers while on the phone are cute, but not compelling. However, as a serious business user who relies on their smartphone, I can’t imagine losing this critical feature.
Who Will Bite?
The big winners today are existing Verizon customers. Those who’ve lusted after an iPhone since day one but settled for something else and now get to join the party. Until now, customers who wanted both iPhones and to stick with Verizon had to settle for something else. Now they have a real choice. I’d love to see the stats about how many existing Verizon customers switch from Android(s goog), Blackberry (s rimm) and Windows-based (s msft) phones. But claims of an impending mass exodus are premature at best, in my opinion.
Related content from GigaOM Pro (sub req’d):