AT&T wants customers to buy anything but the iPhone

You could make the argument that AT&T might not hold nearly as much of the US mobile market if it weren’t for striking a deal with Apple that made them the exclusive launch partner of the iPhone. That exclusivity remained for years, causing other carriers to kick themselves for missing out on a golden opportunity. The iPhone has become such a hot ticket item that Sprint reportedly paid an exorbitant amount of cash to Apple simply for the right to stock the latest iteration of the handset. So why, then, is word trickling down from AT&T’s corporate offices to the retail level to steer customers away from purchasing an iPhone, even if they enter the store with their mind already set on the device?

That’s the word coming from BGR, where a report cites multiple sources working in AT&T’s retail stores as saying they have received direct orders to push customers towards Android (and even Windows Phone) devices. The reasoning behind the directive isn’t clear, as the iPhone has made up the bulk of AT&T’s phone sales over the past several years. It could be the impending launch of the iPhone 5 (or whatever it may end up being called). It could be in an effort to show a lack of favoritism towards Apple’s product.

AT&T has yet to comment, and we doubt they will provide any straight answers on the matter. Maybe it has everything to do with the fact that AT&T does offer several of the top Android devices currently on the market, and insisting that a customer pick up an HTC One X or Samsung Galaxy S3 instead of an iPhone could actually be seen as doing them a service.

[BGR via WinSource]

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  • UniBroW

    Aren’t iphones more heavily subsidized? having a customer pick up an android vs. iPhone seems like it would make AT%T more money/sale, without taking other things into consideration.

    • bob

      Yep! I’ve also heard rumors AT&T is disgusted with Apple constantly attacking its other hardware suppliers. I think this patent crap is finally starting to defeat apple.

  • RedPandaAlex

    I thought that Verizon was pushing customers towards new Android devices because they use the shiny new LTE network. But they might just be more profitable.

    • http://www.facebook.com/lucyparanormal Daniel Tiberius

      Yeah i read that as well, cause they want people using LTE to free up their 3G bands.

      • http://www.facebook.com/david.a.watkins.14 David Arnold Watkins

        Its way more expensive to pay Qualcomm for 3g then use 4g

      • TBN27

        That is most likely the case as for many iPhone users i know experience dropped calls and inabilitues to cobnect quickly to the mobile web because everybody and their mother has an iPhone on AT&T.

        • dbcad7

          Calls go over GSM bands not 3G.. which is why you can surf and talk at the same time.. I think the dropped call problem, which is sometimes speculated as due to all the data usage, has more to do with the antennae problems of the iPhone.. Yes there are more users and that may mean more possible calls at the same time, but I think that is small compared to the number of users using data at the same time. The iPhone crowd has refused to beleive their golden idol could possibly be defective, and it’s easier to blame AT&Ts network.

  • Imparus

    The profit gain for retailers when selling apple product are close to zero, so of course they will want people to buy anything except the iPhone.

    But if the profit gain is close to zero, then why do they have it? Because customers buying an iPhone at them are better than a customer buying an iPhone from a competitor.

    • Butters619

      When I worked at Best Buy, an iPhone case or a Zagg screen protector made about as much money as signing somebody up for an iPhone.

      And it’s the same logic. Why sell it? Because a customer coming in to Best Buy to buy something will always be better than them going somewhere else.

    • Matthew Merrick

      well said!

    • Brian S.

      Apple also has their overhead increasing in China. Minimum wage was raised and they can’t force Chinese men, women and children into slavery as bad right now.

  • satsmine2k4

    might be AT&T finally realized the iphone sucks….:)

    • Robert Manser

      Agree!!!!!!!!!!

      • harold

        agree! apple sucks

    • Trickie Tom

      or maybe AT&T realized their Data Network sucks and rather than keep upgrading (which they are doing w/ LTE) the network, they would rather push ppl over to Android or WinP7 to get ppl off of their 3G networks and over to their LTE networks, which in the end makes their 3G networks work better.. Betting thats more or less why.. Why upgrade a dead infrastructure(3G) when they are building a 4G(LTE) network..

    • endinyal

      Yeah. In your sad little world, that’s what you want to believe.

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      Naw,not that. Ma Bell prolly mad because she aint the only woman “in bed” with jobs and she aint got sole distribution anymore. Now that jobes worm-bait, she cant influence the company and they prolly are the ones kicking att to the side.

      Ibam curious to see WHEN att will remove the iphone from being the FIRST thing to pop up when checking fornan upgrade….

    • InspectorGadget80

      Damn straight

  • challenge_accepted

    The noobs working retail will still push iphone. The wp marketing failed before.

  • ThaSik1

    My guess would be that they wanna get people on their 4g network so they can charge that extra fee on top of the extra change they get in their pockets for selling the less subsidized mobile devices to customers..

  • zeorai

    This is just rumor, but in the past I’ve read that not only is the handset more subsidized than the other phones, ATT also pays part of the monthly fee to Apple as well per phone. Keep in mind I’ve never been able to confirm that, and it might be over now too since it may have only been during the exclusive period.

    But it might be the same thing with VzW, the iphone is 3G and ATT wants to highlight it’s new LTE network. That helps promote their brand more than selling an iphone, which doesn’t have an ATT logo on it.

    • 1ofdakoolkidz

      You are correct sir, AT&T, VZW, and Sprint have to subsidize the iPhone and also give Apple a fee of every subscription. Apple are gangsters, this is also what led VZW to change their data plans because apple gets a cut.

      • TBN27

        No wonder T-Mobile is reluctant to carry it.

  • http://www.facebook.com/lucyparanormal Daniel Tiberius

    This surprises me, as whenever I’m in there they have some ‘tards working that don’t know jack about what they’re selling and assume everyone wants and/or has an iPhone.

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      True dat!

  • AnthonyMoya

    Could be that they want to sell their LTE phones like Verizon. Plus they can add their bloatware to android phones.

  • http://claimid.com/155/ 155

    I think the other phones are simply more profitable.

  • http://www.facebook.com/tonym2003 Tony Rougeau

    It’s all in the profit! I know I’m paid far less to sell an iPhone than I am to sell an android. Apple has such an outrageously high mark up on the iPhone that the company doesn’t really profit from them as much as they do with ANY OTHER smartphone.

  • MrDSL

    My guess is the sales people were told to actually start servicing the customers BEST needs even when they are misinformed..
    Hence suggesting getting an Android instead.

  • Kennon

    History repeats itself. Apple is going to sole source themselves out of another market just like they did in the early 90′s. As soon as a “good enough” replacement (read Android) is available that makes partners and OEM’s a much higher profit margin is available the channel will drive customers to the more profitable alternative, just like the x86 DOS/Windows PC did. The fact is, put a stock Galaxy S3 or HTC OneX in your every day iPhone user’s hands and they will think it is just as good. Once that happens the iPhone is doomed.

    • renGek

      Realistically, we have to remember these companies are out to make profit for themselves and not do the world great good. Those execs want as much $$$ for themselves as they can. And if it hits the crapper, they’ll bail and let the next set of execs deal with the aftermath. The original execs don’t care. They got their money. On to the next company.

      • samagon

        this is exactly what Steve Jobs did!

    • jbo1018

      This is EXACTLY what I believe is causing Apple to sue like crazy. They know this is what’s happening and the only way they can stop it is to try and get rid of the competition.

  • noes

    Pathetic that this would get published. It’s one thing coming from the “exclusive” troll blog that is bgr, but why is phandroid repeating it?

    att has already responded: The idea that we would steer any customer away from a particular device couldn’t be more farfetched. Our reps do what it takes to align customer needs with the best device for them. iPhone remains one of our most popular devices, which doesn’t happen by steering people away from it. Our reps are encouraged to try all devices so they are more knowledgeable on our industry-leading smartphone lineup.

    • ntegrit

      Hypothetically, even if this article were dead-on accurate, could AT&T realistically have responded any differently?

      • noes

        My point was more that bgr is more of a troll bait blog than it is a tech blog, so what is phandroid doing rehashing their bs? Is Kevin looking for page views too? Why am I even being downvoted for pointing out how terrible bgr is? Is this some bizarro world?

        • ntegrit

          Don’t know if you were referring to me, but FYI, I haven’t downvoted you!

        • Ben Kapferer

          Yes, it must be the fact that you “pointed out how terrible bgr is”; it couldn’t be your rash accusations, inaccurate information, or smart-alack attitude.

    • bob

      LOL! what’s said publicly vs what’s said behind closed doors must always be the same right? Reps have posted copies of the memo. This is just ATT backtracking for PR purposes nothing more.

    • james ortiz

      makes sense that they wouldn’t want the public to know about it!

  • Rdfry

    Good, now they should just drop the iphone altogether

  • sovak75

    This is hardly surprising. Margin is slim on iPhone sales because of the high subsity they have to give to sell the phone at the apple set price. Verizon is pushing LTE devices and the reps get higher commissions on them. For AT&T it has always been okay because of the volume of sales but sales are down and that necessitates a higher margin. Now add to that the fact that Nokia wrote them a huge check to push the craptastic Lumina 800 (I say craptastic not because its WP though that certainly applies to but because they have so many defective ones ). Makes perfect sense to me.

  • Dimitri Perrakis

    I would think it’s because it allows them to focus on expanding their 4g hardware and start to decommission their 3g

  • JesseArciniegas

    profit margins are higher on any other smartphone.

  • John Wentworth

    I’m sure it’s all about subsidies, it seems obvious. AT&T pays a lower subsidy for Android and WP7 phones.

  • Major_Pita

    They probably don’t want to deal with the buyer’s remorse returns/exchanges as more news of the iPhone 5 surfaces and people start bringing in 2 month old iPhone 4s and stating they’ll ETF outa there unless ATT exchanges.

    • Go Hawkeyes

      This is my thoughts exactly. It has nothing to do with Android.

  • NardVa

    With Sprint, Verizon and a few small carriers selling the IPhone the return on the Iphone investment for AT&T has diminished. It makes sense to push phones that give your company a bigger profit and showcases your brand new LTE network. Plus the GSIII and One X are far better phones than the IPhone 4S.

  • Aaron Berlin

    It’s tricky for carriers – because so many customers clearly want iPhones, they need to carry it in order to bring in those people, but the margins on the iPhone are thinner (for exactly the same reason – so Apple knows it can charge more). The AT&Ts of the world would love to carry the iPhone to bring people in the door, then once they’re there, sell them anything but. It has nothing to do with “showing favoritism”.

  • renGek

    The sith lords lost their control over at&t’s ceo?

  • CharlieTX

    AT&T, like any other company in the consumer space, realizes that unless their sales are reasonably well spread across multiple vendor’s products, they can easily be held hostage by a major vendor. And given the current Apple/Android attacks, I wouldn’t put it past Apple to try to force AT&T to carry only their products.

  • http://twitter.com/jdk2 jdk2

    The ultimate slap in the face for Apple’s greed. Well deserved.

  • http://twitter.com/Defenestratus Defenestratus

    Probably because they don’t want anymore devices tied to their crappy legacy 3G network.

    They want more 4G/LTE users, just like Verizon – except they only exist in like 10% of Verizon’s LTE market.

  • JoeTi

    “…causing other carriers to kick themselves for missing out on a golden opportunity”: Not true. VZW said no due to the money, mkting, retailing agreement Apple was looking for at the time….as it is pointed out by many others, this is probably a profitability move to support att’s lte buildout and protect against the future costs of next Gen iP5.

  • TayshaunBoba

    If I had to venture a guess at why, I would say AT&T is scared of Apple holding all the cards. With so much of AT&T sales driven by the iPhone, AT&T lacks a diversified portfolio which puts more leverage in the hands of Apple. With (almost) every other carrier having the iPhone, they know they had better get customers excited about something else that’s unique to AT&T to keep people from going elsewhere.

  • Brian S.

    I wondered when the day would come when I could say this:

    I support AT&T’s decision!!

  • http://happyhollartraylerparkrednecks.com/ What Thuh

    HA! WHY? Ma Bell’s had her head stuck so far up in Job’s ayess she went into the ground with him. Why she want out now? The worms in his decayed bütt chewing on her now? EVERY TIME I had a need for imteracting over the phone with att they P U S H E D that iphone.

    I had to buy my android from amazon before att got jealous, then another from ebay just because of atts tantics.

  • http://pulse.yahoo.com/_SAIDWUUT3NGUMUDDBKPTYIWHHA zen

    maybe its because the iphone is a hungry little hippo when it comes to data?
    don’t at&t have a rather bad image for data speeds?

  • TongueDar

    If this is true, my guess is that it’s because of bandwidth issues. My friends that are still on iPhones via AT&T have all been complaining about data usage getting really slow.

  • Timmy

    The reason is the same as why Sprint increased their ETF, got rid of the Premier Program, doubled the upgrade fee and decreased their return policy. It’s also the same as why Verizon started charging an upgrade fee, reduced their return policy to 14 days and periodically runs promos to drive sales of anything non iPhone. It’s also the same reason AT&T doubled their upgrade fee and why they consistently drop their prices on their better Android devices. Apple is stingy. They give the carriers next to no break to sell their devices, causing them to have to dish out a huge subsidy that they can’t make back with dwindling costs of service (namely in rate plan costs) meanwhile Apple gets fat. Coincidence that this happened just after Apple has to reveal the internal margins they make on the phones?

  • dex

    It is probably just more expensive for AT&T to subsidize an iPhone.

  • Arcangel

    I work at AT&T, simple short answer to this is because AT&T dont make that money selling iPhones, they make more money on android phones or even simple talk and text phones lol

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      If they did make money on android…then why is it that they banned androids in 2007 onward until jobs died? All att customers got was that crappy backflip for several years while other carriers were pumping out android after android

  • LawrenceMcatee

    This is all true. Aside from applesuckshurrdurr We make damn near zero on them. My company in particular avoids them like the plague and praises me for being able to turn iphoners into android… ers.. or whatever. I have given demos at meetings and even written out a giant faq sheet pointing out androids benefits to send out to all the salespeoples. I personally sell on average 3-4 iphones a month compared to over 50 androids (small store) Everything about this is true and every “corporate” “big wig” whatever echoes these same thoughts. iPhones are only cash cows for cup. corp. And now that att has the customers, they want to drop the infection that we all know as the iphone.

  • wushang681

    tinyurl.com/cyk9xz2

  • http://www.facebook.com/profile.php?id=730504600 James TechnoBrotha Abraham

    I will believe this, when AT&T changes something that has been a thorn in my Android-loving a$$ for quite some time now (And I confirmed it yet again prior to this response @ 9:10pm CST 08/01/12). Any time an AT&T customer checks/applies online for an upgrade, a splash page (now TWO!) force feeds the latest iDrone down the customer’s “throat” as if it’s the only option available. One has to locate and then click on a tiny link in the lower left hand corner in order to ”
    See all available new and refurbished phones and devices ! Really, give me a break! I hated this when they had total exclusivity with that phone, and hated it even more when they lost it, and STILL treated it as if it was the only REAL choice. Until that changes, I’ll take any such rumors with countless grains of salt!

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      Technobro, you are right! STILL to this minute, the FIRST thing att shoves at me when I check upgrades is that dämñ iphone. And I am an androdian thru and thru.

  • http://www.facebook.com/alejandro.castro.1829 Alejandro Castro

    Lmaoo Watch them get sued by Apple cause of this statement, IPhone sucks anyway lol

  • Boom! Its phatman

    If At&t drops the iPhone they will gain a new customer.

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      Doubt they will. Eventhough jobs divorced ma bell, she aint lettn go of his bällš yet.

    • Joey

      And lose MILLIONS!!!

  • AnRek

    Time to stop feeding the patent troll, before it achives it primary goal, slowing down development, and stopping competition.

    • http://happyhollartraylerparkrednecks.com/ What Thuh

      ¿Que?…..slow down what dev?

  • samagon

    they probably don’t make as much money on the iphone as they make on other phones.

  • James Pearson

    Guys… please don’t regurgitate this simply because BGR said it. There’s too many other things involved. AT&T has always made it hard to get an iPhone as a COU device and that’s simply because they want their reps to be intimately familiar with a variety of OS’s and phone types. They don’t actively discourage the iPhone, but they want people to know there ARE other options. Aside from that, like Verizon, they have an incentive to push 4G devices as their new network is largely under used. I’m pro Android all the way, but believe the reps would rather push iPhone because its a guaranteed sale.

  • Bill Holley

    The number one reason? LTE (or whatever 4g) costs a whole lot less (in hardware and electricity) to serve than 3g. How much less? A bunch. They can get the same throughput on two 3′ x 3′ 4g boxes than a whole room of 3g servers. iPhone 4s is pretty much the only premium 3g phone left, and they really, really don’t want to buy more 3g servers. In fact, they can’t wait to unplug the ones they have. They’ll get excited about the iPhone again as soon as the 4g version comes out.

  • InspectorGadget80

    For once at&t done something right for once. Id rather buy a windows phone over over iphone or in this case android

  • http://happyhollartraylerparkrednecks.com/ What Thuh

    Im sorry Insp-gadget..couldnt drag me back to a sticky-picky-finnicky no-response windows phone…noooooo thanks

  • DAngelo8

    We went to the AT&T store to get a new phone for my wife. All the sales people pushed everything except the iPhone. When asked to get a demo from an iPhone fanboy sales person, no one jumped up, because they all owned and preferred Android phones. However, they said that they still sell 70% iPhones to the lemmings. My wife got the HTC One X and loves it. That being the case, I still desire an iPhone sized Android phone with all the latest specs. All of the latest Android phones, while spectacular, are too large for me.

  • http://profiles.google.com/cokekid76 Luke Mattson

    yippee go lil green guy

  • mikedo2007

    Unless Iphone 5 can get 4G LTE, looks like Android will dominate the Iphone for now.

  • http://happyhollartraylerparkrednecks.com/ What Thuh

    Had to come back to say There was a time when Jobs OWNED At&t. Jobs was atts PIMP! and if att didnt hoist that tight blue skirt and “show mo iphones on every corner and “SELL SOME” then brang da money home to Sugah-Daddy” he would botchslap att and threaten to take HIS bidness to a NEW HO(me) and would take atts cell phone and make calls to “Charlotte tha BIG RED Head Harlot” ! Right in Mamma Bell’s face!

  • http://happyhollartraylerparkrednecks.com/ What Thuh

    Word on the “switchboard” has it that Big Mama Bell put a lil’ somp’n-somp’n extry in Jobs “apple piih” and turned him into baitworm fer threatening her! Watchout FCC, you dont MESS wiit BIG MAMMA BELL!