Recently Merrill Lynch published a white paper on how much the iPhone means to AT&T and the potential effect of AT&T losing their monopoly (maybe as early as mid-2010). A lot depends, of course, if there is going to be a CDMA version of the iPhone.
Here is a summary of their analysis and comments.
approximately 11.5 million iPhone subscribers in the USA (3Q09)
iPhone subscribers comprise 18% of AT&T’s postpaid subscribers
the iPhone has driven an 8% uplift in gross add share for AT&T
the iPhone has taken market share away form AT&T’s base but at much higher ARPU
because there is little churn associated with the iPhone, the overall churn numbers for AT&T have decreased.
the iPhone has been the primary driver of data ARPU growth for AT&T.
The M/L’s analysis treats the iPhone as the only game in town, but with the success of Android-based phones (G1, G2 and ‘Droid) finally giving Apple a run for its money, this is not the case. While these phones have approximately 15-20% of the market share of the iPhone, they do have momentum and a catalog of applications that is beginning to rival Apple’s if not in quantity at least in quality.
Came across a comprehensive presentation by Morgan Stanley on Economy & Internet Trends given at the Web 2.0 summit in San Francisco. To give credit where it is due, I came across the presentation through my participation in the TelcoSphere group on LinkedIn.
The presentation is in two parts, the state of the economy (improving but not out of the woods yet) and a section on Internet Trends.
Mobile Internet Usage Is and Will Be Bigger than Most Think.
Apple Mobile Share Should Surprise on Upside Near-Term.
Next Generation Platforms (Social Networking + Mobile) Driving Unprecedented Change in Communications + Commerce.
Mobile in Japan + Desktop Internet Provide Roadmaps for Mobile Growth + Monetization.
3G Adoption / Trends Vary By Geography.
Carriers in USA / Western Europe Face Surging Network Demand But Uncertain Economics.
Regulators Can Help Advance / Slow Mobile Internet Evolution.
Mobile-Related Share Shifts Will Create / Destroy Material Shareholder Wealth.
There are several excellent graphs that support Morgan Stanley’s position such as this on devices participating in the mobile internet.
Couple of points that I picked up from the presentation.
The collapse of carrier portals (example used is the UK where the percentage of subscribers accessing a carrier portal went from 57% in 2007 to 22% in 2008). page 46 It is critical that mobile carriers address this otherwise they will become dumb pipes.
Japan represents the future of mobile commerce. The world today (excluding Japan) looks very similar to Japan in 2000. Since then eCommerce, paid applications and advertising have grown from 14% to 33% of a much larger revenue pie. page 49 I am not so sure about this as I think culture is a big factor in adoption not just technology.
Users have a significantly greater propensity to pay when using mobile access compared to desktop (broadband). pages 51-52 True, but there a lot of free applications and more each day.
Due in great part to the iPhone AT&T has seen an almost 5,000% rise in data traffic in the three years up to 2nd Qtr 2009. Yet 42% of iPhone usage happens on Wi-Fi networks. Wi-Fi may turn out to be the answer for the carrier’s capacity issues. pages 57-58 This was quite surprising to me, I expected some Wi-Fi usage but 42% is significant.