Everyone who's still using the cell phone they bought five years ago, please raise your hand. Any takers? The odds are good that not many hands are in the air right now. According to a recent J.D. Power and Associates report, the average replacement cycle for a mobile phone is just under 18 months.
The terms of AT&T's corporate relationship with iPhone manufacturer Apple are slowly emerging, and fickle consumers notwithstanding, AT&T has reportedly inked a deal with Apple that gives the company the exclusive distribution rights to the red-hot handset for the next five years.
The distribution details were revealed in a USA Today article on Monday by Leslie Cauley, who also said that under the agreement, Apple is prohibited from developing a version of the iPhone that can work on CDMA wireless networks. Unlike Verizon and Sprint, which use CDMA networks, AT&T uses GSM wireless technology, which is incompatible with CDMA. In short, no GSM, no iPhone for at least five years.
AT&T Now Rebranding
On Monday, AT&T began a rapid rebranding campaign aimed at replacing the Cingular brand with AT&T (the two companies merged on December 29, 2006). In a press release, AT&T said that the company's brand recognition as a wireless carrier now matches that of Cingular when the two companies came together.
Randall Stephenson, AT&T's Chief Operating Officer, said that the transition was going well. "Our branding campaign is performing at and above projected levels and customer response has been very positive," he said. "We are excited to move into the next phase of transforming AT&T into the only communications provider our customers will ever want."
The transition of brand identity from Cingular to AT&T is a complicated process, one that covers everything from the logos found on billing statements to sponsorship deals with NASCAR and American Idol. The company described its retail store makeovers as "critical to prepare for the late-June launch of the Apple iPhone."
Fiercely Competitive Market
With the U.S. cellular market approaching saturation in terms of the number of customers, cellular companies are now focusing their efforts on pirating customers from their competitors. AT&T's multiyear exclusivity arrangement with Apple is an indication that AT&T believes the iPhone is sufficiently compelling technology to motivate people to change carriers. (continued...)