Much has been made of Sprint’s big bet on Apple’s iPhone, but recent research suggests the carrier made the right move.
According to Yankee Group, U.S. mobile operators that offer Apple’s iPhone uniformly report hits to their profit margins due to the device, but data reveals a significant silver lining.
According to the report “iPhone Conundrum: Profit Drag or Halo Effect?,” carrying the iPhone immensely improves customers’ overall impression of the operator brand, especially among Apple users.
Other OS or device brands, such as Android or Samsung, fail to show a similar impact, the report found.
“From a financial perspective, the device – or, more precisely, the relationship with Apple that goes with it – carries significant challenges,” said Rich Karpinski, Yankee Group senior analyst and author of the report. “But it also brings subscribers in droves as well as significant improvements in how those users view operator brands.”
Apple’s iPhone has become notorious for the high financial cost to carriers that want to offer the device. Unconfirmed reports have surfaced recently that AT&T is heavily promoting Windows-based Nokia’s Lumia line of smartphones because they carry lower subsidies than the iPhone.
Karpinski contends that with the latest iPad focused strongly on 4G and an LTE iPhone likely to appear later this year, U.S. operators that find ways to successfully manage the “i-challenge” will win.
According to the report, AT&T boasts the largest iPhone halo effect. Among Apple users, AT&T ranks No. 7 out of 20 top mobile brands. Among all users, it ranks No. 14.
Sprint registered immediate gains. While the impact on AT&T’s brand grew over time, Sprint’s impression scores nearly doubled just in its first quarter of selling the device.
Verizon was the odd one out with regard to the “halo effect” but for all the right reasons. The report found that Verizon does not see a corresponding boost in its brand among core Apple users. Overall, customers seem to value Verizon’s brand highly, regardless of the device they use.