Docstoc

VERIZON MOBILIZES AGAINST THE IPHONE

Document Sample
VERIZON MOBILIZES AGAINST THE IPHONE Powered By Docstoc
					                           VERIZON MOBILIZES AGAINST THE IPHONE

To stay ahead of AT&T and Apple, the carrier is placing a big bet on Android smartphones and other new
gadgets
Can Verizon Wireless keep its spot as the leading wireless company in the U.S. if it doesn't have the
industry's hottest phone?

Lowell McAdam, the company's chief executive, is trying to make the case that it can. Two years ago,
Verizon Wireless passed on the chance to become the exclusive U.S. distributor of the Apple iPhone and
pushed Apple into the arms of rival AT&T. Since then the iPhone has become a megahit, helping AT&T
close the gap with Verizon. In the most recent quarter, AT&T added 2 million wireless subscribers, bringing
its total to 81.6 million, while Verizon Wireless added 1.2 million, for a total of 89 million.

Now, McAdam is launching a slew of products designed to keep Verizon ahead. In the fourth quarter the
company is rolling out its largest new-product lineup ever: 14 devices, vs. half that number a year ago.
Among those will be two netbooks and five smartphones, including the Droid phone from Motorola, a sleek
device with a touchscreen and keyboard that runs on Google's Android operating system. The new
products are backed by an unusually aggressive marketing campaign. In one TV spot, Verizon takes direct
aim at Apple with a series of "iDon't" quips that explain all the things an iPhone can't do. "The Droid can
compete head to head" with the iPhone, says John Stratton, chief marketing officer of Verizon Wireless.

Verizon's strategy is bold but risky. With the Droid and another phone from HTC (page 55), Verizon is
placing a big bet on the unproven Android. The software is popular with techies and has attracted enough
support from developers that 10,000 apps are available for download to Android phones, but it hasn't yet
caught on with consumers. In addition, Verizon risks confusing customers with the sheer number of
devices it's introducing. "Greater choice is not a guarantee of a greater quarter," says Richard Doherty,
research director at Envisioneering Group.

McAdam and Stratton are firing up Verizon's marketing machinery to win over consumers. The Droid will be
backed by Verizon's biggest marketing campaign ever for a single device, and total marketing spending will
increase 5% to 10% in the current quarter from last year. Stratton says the anti-Apple vibe will be toned
down in favor of ads that underscore the features of its phones and the reliability of its network compared
with AT&T's. Verizon has said it is still interested in selling the iPhone if Apple is amenable.

Verizon is experimenting with new marketing approaches. For several weeks in November, the company
has rented time on two huge electronic billboards in New York's Times Square that will show real-time
results of searches people make on their Android phones. Verizon is also planning to transform Droid, the
moniker for the Motorola phone, into a brand name for a whole lineup of Android devices.

Verizon's success may ultimately depend on how the partnership with Google works out. As cell phones
become more sophisticated computing devices, wireless companies need Silicon Valley firepower to
compete. Google has helped boost the number of wireless applications available on Android phones, but
analysts say it has to step up its marketing of Android to gain ground on Apple. "When the iPhone was
associated with Apple iTunes, that really meant a lot to consumers," says Ken Dulaney, an analyst at
researcher Gartner. "You want to know that the [Android] app store is being run by Google."

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:9/11/2012
language:Unknown
pages:1