05/07/2007, 4:30pm, EDT
Monday, May 7thAT&T: iPhone greases branding wheel
AT&T is banking on the iPhone as the ticket to saving its rocky switch from Cingular to AT&T, according to observers of the provider's latest investment gathering. Analysts from UBS Investment Research have noted that AT&T blames at least some of its poor results for the opening quarter of 2007 on the awkwardness of the change in name, which has many users still assuming the Cingular title. The Apple device is seen by AT&T as a "branding event" that will cement the name in people's minds, says UBS.
Contributing to the issue has been a reluctance to brand phones with the new label. The carrier has so far continued to label even higher-profile phones with its new name, showing some phones such as the LG CU500v with AT&T branding while releasing them as Cingular devices.
Also gleaned from the meeting is the belief that initial announcements by Apple and AT&T on the lack of subsidies are correct: the iPhone isn't likely to be discounted by AT&T and may even turn a small profit for the company at retail, the report notes. Apple's portion of the sale, however, might actually hurt AT&T with existing subscribers since most of the profit would only come from service plans for new users.
Though full details of the contract between AT&T and Apple remain a secret, UBS believes such terms could create a genuine problem for the former unless the profit-taking changes for customers trading up versus new subscribers. The deal might also have some built-in flexibility that could alter profit based on the split between new and old subscribers. [via GigaOM]
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And that's why they launched the first batch of iPhone-related material with "Cingular" all over the screenshots etc.? :-)
On 11/20/2005, USA Today reports that "SBC, which closed its merger with AT&T on Friday, plans to sell Cingular Wireless under the fabled AT&T name".
Source: http://www.usatoday.com/tech/news/techpolicy/business/2005-11-20-cingular-att_x.htm
It is more complicated than that. Cingular bought AT&T Wireless several years ago. However, Cingular was a partnership between SBC and BellSouth, of which SBC owned 60%.
After SBC bought the old AT&T (aka AT&T Long Lines), it changed its name to AT&T and became "new AT&T." This was the case when AT&T announced that it would market all of its services including wireless under the AT&T banner. However, Cingular still existed as Cingular because AT&T owned only 60% of it. Cingular would still operate as Cingular in many locations outside AT&T's local service area.
This all changed when [the new] AT&T bought BellSouth. With this purchase, AT&T acquired the remaining 40% of Cingular. As soon as the BellSouth buyout was approved, AT&T moved to change the names of Cingular and BellSouth to AT&T. However, this process had only just begun when Apple introduced the iPhone.
OK, so if AT&T makes a profit on the device sale, and up-sells existing users, hence earning even more, how exactly does it hurt them?
There are too many examples of this in the above article. Really bad reporting job.
Yeah - I can see the confusion_ When I turn on my TV and see a Cingular Commercial_
When in the last Apple Keynote - Steve is introducing the President of Cingular_ And they talk about how Apple and Cingular are conducting business_
When I goto www.cingular.com to handle something with my account_
When I receive my Mobile Phone Bill and the return Address says Cingular_
Yeah - if I squint my eyes real tight and tilt my head slightly and turn the lighting down real low and maybe I were a little drunk - I might be able see that Cingular is now AT&T_ Or not_