business news in context, analysis with attitude

The branding lesson of the week comes courtesy of various news reports that started late last week, saying that Apple plans to make a version of its iPhone that will run on the Verizon wireless network, the first time that an iPhone would work on anything in the US other than AT&T.

This rumor has been around before, but this time there seems to be a lot more behind it; the reports have gotten to the point where Apple’s stock price might actually take a hit if the speculation turns out not to be true. The general feeling seems to be that Apple, facing real competition from the Android smart phone, would help itself immensely by expanding the number of networks on which it works.

All of which makes sense. But it also is possible that the long-term advantages could create some short term problems.

I’ve had an iPhone for almost three years, and am still using my old, original equipment. I remain extremely satisfied, but it’s gotten a little beaten up, the battery doesn’t have the life it used to have, and I’ve been thinking that it is time to upgrade to a new iPhone.

To be fair, unlike a lot of people, I haven’t had any huge complaints about AT&T...but there’s also no question in my mind that Verizon has a superior network. And so when the rumors started getting traction last week that there could soon be a new iPhone on a new network, I immediately decided to put off any decisions until I find out whether the Verizon rumors are true.

I can’t be alone in this. I suspect there are a lot of folks who immediately decided that a new iPhone purchase could be put off for a while.

If I’m right about this, it certainly reinforces the notion that AT&T has a serious brand problem. I have no idea what to do about it, but it certainly underlines the kind of problem that every brand has to avoid. Can you imagine being the brand that people use because they have to, but abandon in droves as soon as there is alternative? Not what I would call ideal positioning.

On the other hand, if the rumors are true, it will be interesting to see what impact the timing has on iPhone sales. (They could suffer a fourth quarter collapse...and the news could be worse for AT&T than for Apple.)

Apple probably didn’t want it to happen this way; the notoriously secretive company probably would have preferred to hold a press conference and announce the move on its own timetable. But these days, being secretive is harder than ever...and maybe is almost impossible.

(Just ask Brett Favre, who has his own brand equity problem these days, about the difficulty keeping things secret. But that’s for another discussion.)

That’s my Monday Eye-Opener.

- Kevin Coupe
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