More evidence that Apple (AAPL) and AT&T (T) should think about cutting iPhone prices to $99 after subsidy: When they cut prices to $199 from $399, sales more than doubled.
AT&T said today it activated 1.9 million iPhone 3Gs in Q4. That’s down 21% from Q3, when the iPhone 3G first launched. But it’s up more than 100% from Q4 2007, when AT&T activated less than 900,000 iPhones.
Why does AT&T want to maximise its iPhone subscriber base? The carrier says iPhone subscribers spend 1.6x the average customer’s monthly service fee, partially because they are forced to buy a $30/month mobile Internet subscription.
iPhone subscribers also have significantly lower churn, AT&T says — meaning they’re less likely than average AT&T customers to bolt for a rival carrier like Verizon (VZ).
Meanwhile, AT&T says about 40% of iPhone customers during Q4 came from rival carriers. That’s about the same number AT&T has reported in the past — and it reflects how hard it is for carriers to sign up customers from competitors. Even with an exclusive deal to sell what’s arguably the best phone on the market, the majority of iPhone buyers are still existing AT&T customers. This despite the fact that the majority of Americans — say, 70% of wireless subscribers — are not AT&T customers.
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