How many intrepid consumers will descend on AT&T and Apple stores this Friday for the long-awaited launch of Apple's iPhone?
No one can say. Some analysts are speculating that the turnout
could be disappointing, at least in relation to the expectations created by the massive hype around the product that combines the functionalities of a cell phone, iPod, smartphone and portable Web
browser.
Still, given Apple aficionados' passion, the "cool quotient" of being among the first wave of owners, and the strictly-enforced, first-come, first-served policy that's
fanning the flames, the stores are bound to have their hands full.
As the exclusive wireless carrier for iPhone, with 1,800 stores involved in the launch to Apple's 160, AT&T isn't taking
any chances.
"AT&T is really the channel -- the one that's ultimately going to drive the sale" during the launch and beyond, sums up Michael Megalli of Group 1066, a marketing
and product development consultancy.
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AT&T has been gearing up for months for what chief executive Stan Sigman has termed "the largest commercial product launch in the history of
electronics," and preparations during the final countdown are intense.
Corporate memos to stores, leaked and posted on tech sites around the Web, have provided detailed instructions
for crowd-control tactics such as line-forming strategies and stanchions.
Memos also detail the D-Day logistics: Launch time is 6 p.m. All stores will close between 4:30 and 6 p.m. for
final set-up and staff preparation, and stay open until 10 p.m. (One memo indicated that this is also the plan for Apple's stores.)
AT&T Wireless employees have received extensive
training -- an average of six hours per employee, or 100,000 total hours of training, according to one executive's statement.
About 2,000 temps have been hired and trained to assist with
crowd control, greeting and managing the flow of customers, and handling technical glitches.
Initially, online sales of the iPhones will be limited to Apple's site, the better to drive
consumers into AT&T-owned stores, where they can be pitched on the company's other products and services at the same time they're buying an iPhone and an AT&T wireless plan.
AT&T
"local dealer" or franchise stores won't have the iPhones for the launch, but that doesn't mean they won't be in on the action. AT&T has also advised these dealers to make the most of
the opportunity to sell other handsets and offerings to iPhone-seekers who stray into their stores -- perhaps first showing the consumer how to buy an iPhone on Apple's site.
Advertising
support began early this year, including a 30-second teaser spot on the Academy Awards broadcast in February, which drew about 40 million U.S. viewers. According to Nielsen Monitor-Plus, Apple spent
$10.4 million on iPhone advertising in major media in the first three months of 2007 -- a mere warm-up for the blitz unleashed this month, including four TV commercials that can also be viewed on
Apple's site. Though heavily dominated by Apple and bearing its unmistakable, minimalist style, the commercials are co-branded with AT&T.
AT&T is also betting that its heavy,
ongoing marketing for the rebranding of Cingular back to AT&T Wireless will create synergistic impact for the iPhone.
After signing with Apple last July, the company accelerated the
rebranding in preparation for the product's launch. The interiors of AT&T-owned Cingular stores have now been rebranded, and the company expects to wrap up the hugely complex and costly
name-change process, including exterior store signage, by year's end.
Ad campaigns driving home the "Cingular is now AT&T" message have been running for months, and it's
probably not coincidental that a new one was unveiled just last week. AT&T's solution for preserving Cingular's brand equity: The "X" logo has been replaced by the AT&T globe, but
Cingular's signature orange color continues as a prominent element in the promotions.
AT&T had already spent about $5 billion in total on the rebranding by the end of last year, and
it's expected to spend another $2 billion by the time it's finished completely phasing out the Cingular name at the end of this year, according to mobiletracker.net.
To further whet
demand for the iPhone, Apple waited until this month to announce that YouTube content will be viewable on the device.
Despite all of the marketing, clever PR and consumer- and
media-generated buzz, some tech mavens say that iPhone sales, at least in the launch stage, could be hampered by the product's high pricepoints: $499 for the 4GB model and $599 for the 8GB model, with
a two-year contract and an as-yet-unrevealed cost for the service plan. (AT&T memos do indicate that iPhone users will be able to buy its FamilyTalk plan.) Not to mention the penalties involved in
canceling existing, non-AT&T wireless contracts.
Will the younger market segments that are so critical to Apple's success be able and willing to spend this kind of money? Might they hold
off, waiting for Apple to launch cheaper generations of the product? How many well-heeled mature consumers will be willing to battle crowds to get their hands on the devices this week? More important,
how many will feel compelled to spring for iPhones and their service plans in upcoming months?
AT&T has reported that over a million people signed up on its site to receive email
updates on the product. A recent M:Metrics Inc. survey found that two-thirds of consumers with high interest in the iPhone say that they'd switch carriers in order to use the product. Further, a study
by ChangeWave found that one quarter of all potential smartphone buyers intend to buy the iPhone at launch.
IDC/Market Insight's research, meanwhile, found only 10% of respondents willing to
pay full price for the iPhone and sign for two years, while 18% said they'd be inclined to buy the phone if it were priced under $299.
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