10% Of Customers Who Leave T-Mobile are Leaving for the iPhone
Even with the imminent release of the Verizon iPhone
, it is still quite interesting to look at how the iPhone is still affecting the American carriers who do not carry the coveted Apple device.
A recent report from CultOfMac
suggests that in a presentation from T-Mobile CEO to investors in New York that the company's "churn rate," the number of customers leaving the carrier for another is around 2 percent of customers per month. Of that 2 percent, 10 percent are leaving directly for Apple's smartphone. He labeled this the "iPhone effect."
There was no talk of T-Mobile acquiring the rights to carry Apple's smartphone, although Apple's current iPhone's technically support T-Mobile's GSM network. CEO Phillipp Humm states that the company's best way to combat this effect is by releasing a set of "sub-$100 Android smartphones, with subscription plans starting at $10 a month." Essentially, T-Mobile does not want to directly compete with the iPhone. The assumption can be made that if a customer was willing to pay $200 for a phone, and around $70 for a phone and data plan, many would opt for AT&T, or Verizon's iPhone.
In what looks like a completely desperate move, T-Mobile seems to have cried Uncle to the lack of the iPhone by 'combatting' the iPhone problem with cheaper, but likely inferior products. It certainly doesn't look like the best time to be a T-Mobile investor, that's for sure.