Telecoms Shore Up Defenses for iPhone Invasion

Companies Say They Welcome Apple's Game Changer, but That Sure Isn't Stopping Them From Fighting It Off

By Published on .

SAN FRANCISCO (AdAge.com) -- The telecom industry gives good chat on welcoming the iPhone -- coming late this month -- as the means to evolve consumer perception of the mobile phone. Not only will it convince consumers to view the mobile phone as a multipurpose device, the thinking goes, it will also help service providers break the free-phone syndrome.

At the same time, however, every phone manufacturer and telecom is fortifying for one of the industry's most hyped launches. John Hodulik, UBS Securities telecommunications analyst, headlined a recent report "Competitive Pressure on the Rise with the iPhone Launch."

Why? The iPhone is a marketing game changer. Today the vast majority of America's 230 million mobile-phone users select their phones based on carrier service, and marketing centers on price, area coverage and plans. Apple is trying to make more consumers pick a carrier based on a device.

Here's how the products and their marketing strategies stack up.


THE BET: IPHONE
THE PLAYERS: Apple, AT&T
THE DRAW: The iPhone's interface will access the full internet, iPod music collections, videos and e-mail with a tap on the screen.
MARKETING STRATEGY: Steve Jobs' marketing magic is under wraps while Mac devotees and the media whip themselves into a near frenzy. The initial TV spot, created in the tight-security Media Arts Lab of TBWA's Los Angeles office, was seeded with a friendly "Hello " commercial shown during the Academy Awards that featured a gaggle of film stars old and young, real and animated, answering old-fashioned phones.
THE ODDS: Everyone wants an iPhone, but some analysts wonder whether, at $500, it's too pricy for the youth market, and without a qwerty keyboard, it may not lure the BlackBerry/Treo crowd. The masses may simply wait for a bug-free 2.0 version.
THE BET: MEDIAFLOTV PHONE
THE PLAYERS: Verizon Wireless, LG
THE DRAW: The phone picks up a broadcast signal, allowing users to see live TV.
MARKETING STRATEGY: Verizon is pushing its TV phone and beefing up its music offerings with products that allow the phone to identify a song on the radio, search for it, buy it and load it.
THE ODDS: Verizon executives have said they passed over the iPhone deal because of Apple's restrictions. They say they have a response. Time will tell.
THE BET: UPSTAGE
THE PLAYERS: Sprint Nextel, Samsung
THE DRAW: A dual-face phone that looks like a phone on one side and a music player on the other.
MARKETING STRATEGY: Cut prices on over-the-air music downloads to 99 cents and offer a dozen music phones, most under $100 with a two-year service agreement.
THE ODDS: Good reviews and a low price, but it's no iPhone, especially as far as the user interface goes.
THE BET: RAZR2
THE PLAYER: Motorola, undisclosed carrier(s)
THE DRAW: The revised Razr has a music player, e-mail, and improved reception.
MARKETING STRATEGY: Razr2 was touted with fanfare at a media event and scheduled for a third-quarter launch. Marketing is in development.
THE ODDS: Razr2 is a retrofit response, taking on each iPhone feature on a case-by-case basis. The Rokr will have a Bluetooth stereo headset, but maybe the iPhone will too. Hard to tell, but whichever way it goes, so goes CEO Ed Zander.
THE BET: OCEAN
THE PLAYER: Helio
THE DRAW: Two sliding sides, one a keyboard and one a phone pad, as well as MySpace, messaging, searches and stereo Bluetooth headphones.
MARKETING STRATEGY: It's a hit with critics, and the buzz is supplemented with a radio and print campaign from Deutsch and an in-house TV spot.
THE ODDS: At $295, it's not as pricy as the iPhone, but it's up there. And Helio has limited distribution channels. Still, Helio might be able to hang on to its base.
THE BET: AMP'D
THE PLAYERS: Amp'd Mobile, Motorola
THE DRAW: An entertainment phone with the functionality of a personal digital assistant from the long-on-the-market Q brand.
MARKETING STRATEGY: Amp'd uses entertainment as its point of distinction, so while the phone has a spot in the carrier's rotation, Amp'd is still banking on software, original content and other offerings.
THE ODDS: It's too early to tell whether betting on content is a long shot.
THE BET: SWITCH BACK
THE PLAYER: Virgin Mobile
THE DRAW: Two color screens, camera, messaging.
MARKETING STRATEGY: Switch Back, at under $100, provides a nice taste of mass-market technology relatively inexpensively. An ad campaign from McKinney will target micro-locally, with billboards for specific neighborhoods.
THE ODDS: Sticking to its target -- the prepaid, young/frugal consumer -- just might just shield Virgin Mobile from the iPhone storm.
THE BET: BLACKBERRY CURVE AND PALM TREO 755P
THE PLAYERS: Verizon (BlackBerry); Sprint (Palm Treo)
THE DRAW: Combine a phone with all their usual wireless e-mail functionality. The Curve has a media player and a, well, curvy design.
MARKETING STRATEGY: Both could take a hit from the iPhone target: tech-savvy, upscale consumers and professionals who can afford it and like to flash the latest. BlackBerry has upped its generally low-key marketing for this one.
THE ODDS: A number of analysts think these two might have the most to lose.
THE BET: NOKIA 5300 XPRESSMUSIC
THE PLAYERS: T-Mobile, Nokia
THE DRAW: Camera phone with Bluetooth comes preloaded with music and, to sweeten the deal, some free Yahoo Music downloads.
MARKETING STRATEGY: Featured at retail and on the T-Mobile website, it is compatible with the MyFaves campaign and will get a marketing push this summer.
THE ODDS: The iPhone won't hurt T-Mobile's post-paid constituency, but many of its targeted young customers could find the iPhone a stretch purchase.
In this article:
Most Popular