Some third-party retailers sour they’ve missed out on iPhone revenue
Others say iPhone drives business to their stores
July 21 2008 - 2:09 pm ET | Allie Winter | RCR Wireless News
Comment on this story
Jacob Whipple looks over a 3G iPhone in an Apple store in Salt Lake City.
Photo credit:George Frey/Bloomberg News
iPhone, iPhone, iPhone. Apple Inc.’s new device is dominating chatter in the wireless world, selling out in most stores and AT&T Mobility employees couldn’t be more pleased. But some third-party retailers who work with AT&T Mobility and sell their products and services, both exclusive and non-exclusive, are angry to have been left out of the iPhone loop, again.
One third-party retailer representative, who chose to stay anonymous due to fear of termination, is frustrated that his company did not receive the iPhone last year or this year and said he is losing business because of it.
“It’s amazing how many customers we get per day and we have to send them away,” he said.
Sometimes it is hard to distinguish between an indirect AT&T store and a company-owned store so customers have no way of knowing if that location will have the iPhone or not. And this representative said the iPhone is the only device customers are looking for; they don’t want to buy any other handset. He also said that customers don’t just come into these stores looking for the iPhone; they also came in during the midst of all the iPhone issues.
“Even of the first day when they had activation problems, customers came in yelling and screaming that AT&T and Apple screwed up and the phone doesn’t work,” he said. “We’ve been told we can’t even help customers with an iPhone. “
He also believes putting the iPhones in indirect stores would have sped the process along on launch day.
“You wouldn’t have all these lines if everyone was selling them and not as many headaches,” he said.
Because AT&T has never given third-party retailers an explanation why they don’t have access to the iPhone, they suspect it is because AT&T wants to control the pricing. Indirects can offer additional savings and rebates on the devices in their stores. But, the representative said his company had agreed to sign a contract stating it wouldn’t lower the price, but AT&T wasn’t up for it.
“The relationship is really tarnished,” he said. “They expect us to do X amount of numbers, but we can’t meet anything.”
Another third-party retailer said AT&T tells its retailers they’re part of the AT&T family, but then leaves them out of the biggest launch in the carrier’s history.
Not everyone upset
Other indirect sellers said they are not bothered by the lack of iPhones in their stores. Spring is an authorized and exclusive AT&T retailer. Peter Woodman, a spokesman for Spring, said not getting Apple’s 3G iPhone hasn’t hurt Spring’s business.
“A lot of people come in and ask for it; some leave then and some listen to other options,” Woodman said. “Even though we don’t have it, it’s driving a lot of traffic into our stores.”
Woodman went on to push that even if Spring had been offered the iPhone, it would be too expensive for its customers. “We wouldn’t want to push a $200 price anyways,” Woodman said. “Customers have to pay a lot of money for those iPhones and [an additional] $30 a month is expensive. When we show customers, they’re not willing to pay that much.”
In terms of losing customers, Woodman said they probably are losing a few, but he’s not seeing a lot of impact from regular customers, just in potential new customers. He said he is not worried.
“We’re able to give customers a better experience with other phones,” Woodman said.
Another outlet left in the dark includes big-box retailer Best Buy. However, a spokesperson from the Minnesota-based chain said it hasn’t been an issue because the store received the Samsung Instinct, Sprint Nextel Corp.’s iPhone competitor. He said that device has been doing quite well and they’re selling quite a few.
“You can’t deny the popularity of the iPhone,” he said. “It’s certainly something we’re examining.”
AT&T and Apple stores are still the only places to buy an iPhone and the future remains unclear. When asked about third-party retailers not receiving the iPhone, AT&T had no comment.
August 13, 2008 11:04 am
I WORK FOR THE CLC TOF SPRING COMMUNICATIONS. I SELL THE PHONES AND I SAW A SUBSTANTIAL NUMBER OF POTENTIAL SALES LOST BECAUSE WE COULD NOT OFFER THE IPHONE. ALONG WITH A FEW OTHER PHONES AT&T HOLDS EXCLUSIVE TO THEMSELVES. PETER WOODMAN HIMSELF WAITED IN LINE FROM EARLY HOURS OF THE MORNING ON THE RELEASE DATE OF THE IPHONE TO PURCHASE HIS OWN. ALONG WITH ONE FOR HIS DAUGHTER AND OTHER FAMILY MEMBERS. THE IPHONE IS THE HOTTEST SELLING PHONE RIGHT NOW. ALL I CAN HOPE IS THEY ARE NOT THIS GREEDY WITH THE BOLD. WITHOUT THAT WE HAVE NO PHONE TO COMPARE.
July 25, 2008 06:43 am
As an at&t exclusive dealer it certainly would have been nice to be able to sell the i-phone, but I did not dwell on the fact that I was unable to, instead I concentrated on converting as many i-phone lovers over to another phone. I also had a very good month when the i-phone came out. Someday at&t and Steve Jobs will realize how important we are to their overall picture of success.
July 22, 2008 06:27 am
Its about time someone wrote about the AT&T dealer network and how they threw us under the bus. Since the new iphone came out on the 11th, we have an average of 25 people a day that come in asking to buy it. They dont want to hear about any other phone. They come in with apple blinders on. And for good reason, at 199. price point it is an incredible phone. I wish i could buy one, but then i couldn't use my AT&T demo line - against the policy and agreement they had us sign.
July 21, 2008 02:39 pm
Nick,Do you work for Spring? If you don't, I'm curious as to how you know their sales figures. If you do, how rude to talk to your executives in that manner. You should be fired.
July 21, 2008 02:39 pm
Nick- Apparently the at&t authorized retailer you work for is full of executives incapable of understanding the market and would rather sit around and bout all day about how unfair it is that we cannot sell the Iphone. Spring's executives have teneciously overcome this obstacle to drive sales. And Nick, its okay that you have never met the executives that work for your company, at Spring, they frequent our stores and care about their employees; as well they are innovators in this industry. We are taking applications Nick. You wouldn't be the first to realize that Spring is the best company to work for!!
July 21, 2008 02:12 pm
I really think these foolish AT&T reps the author interviewed should pull their heads out of their asses. Anyone not living under a rock knows that even Apple can't keep the phones on the shelf, there is simply too much demand. So here we have AT&T reps complaining that their smaller, indirect stores. There are no phones at ANY AT&T stores, and few Apple stores. Everyone needs to just calm down. I got mine =)
July 21, 2008 02:39 pm
Also, one correction. Spring Communications does operate the SimplyMac locations; however, SimplyMac is not authorized to sell the iPhone either. We sell at&t phones and services, iPods, iMacs, Macbooks, etc, but we can't sell the iPhone :) I think everyone is optimistic that at&t and Apple will figure out that their approach with agents is flawed with the next release.
July 21, 2008 02:39 pm
I have some advice for Nick. Everyone knows that we are losing sales we would have if we had the iPhone in our stores, but the bottom line is that we don't have it. So you can sit around and piss and moan about it or you can take a different perspective and take advantage of the extra traffic in your stores. Spring had it's best sales weekend of the calendar year with the iPhone launch. How did you do? Judging by your victim mentality I think we all know the answer.
July 21, 2008 02:39 pm
Apple first offered the iPhone to Verizon Wireless before going to second-choice AT&T. Verizon turned it down because Apple wanted too much control in deciding where the phone would be sold, and they wanted that revenue sharing agreement. Verizon didn't think it would be fair to sell the iPhone only at certain stores, and they didn't want to pay a monthly fee to Apple for each iPhone activated. Apparently AT&T went along with both of those provisions. It's funny how both of those items didn't work out well. The revenue sharing that went along with the first iPhone has been discontinued, in favor of a carrier-subsidized phone price and higher monthly fees on the new 3G iPhone. Plus, AT&T has a lot of unhappy retailers that can't sell the iPhone.
July 21, 2008 02:39 pm
As an at&t exclusive retailer I have some advice for Spring executives. First - Get out of the office and into your stores. You are losing business and more then you think. Second - what kind of business owner does not mind when customers are walking out the door to buy the same service down the street? Third - get your lips off at&t’s ass and you might be able to see at&t cutting commissions to pay apple. Wake up Spring! Customers are willing to pay the money.