Despite a very vocal group of detractors, the vast majority of iPhone users love AT&T.
That’s the key finding in a survey released this week by Yankee Group, which reports that 73% of iPhone users are very satisfied with AT&T’s service. That rating compares favorably to how non-iPhone smartphone users feel about AT&T, and even to how non-iPhone users feel about other wireless providers.
The satisfaction rate of AT&T subscribers as a whole is 68%, and only 69% of smartphone users say they are satisfied with their mobile provider, Yankee Group found.
The results are surprising, given the pounding AT&T has taken in the media and on the blogosphere about its service-related issues with the iPhone. On CNNMoney’s recent stories "AT&T and Apple’s marriage made in hell," and "AT&T: The most hated company in iPhone land," reader comments were overwhelmingly negative toward the wireless network.
AT&T’s recent iPad-related security glitch and mishandling of the iPhone 4 launch likely didn’t do much to help its reputation. Plus, iPhone owners pay AT&T nearly $12 a month more for service than the average smartphone user.
Tech analysts like to point out the ways in which AT&T is a drag on the iPhone. Gartner Research Director Carolina Milanesi said last month that AT&T’s network has "limited the iPhone experience." And Drake Johnstone, an analyst with Davenport & Co., forecasted that poor experiences with AT&T would drive as many as 40% of iPhone customers to Verizon once that network gets the iPhone.
So what explains Yankee Group’s conclusion that iPhone users’ love AT&T?
"Consumers transfer the high gloss of their Apple iPhone experience to AT&T," says Carl Howe, Yankee Group analyst and author of the study. "The iPhone creates a halo effect that rubs off."
In other words, iPhone customers’ praise for their network may be a result of the famous "reality distortion field" that surrounds Apple (AAPL, Fortune 500) CEO Steve Jobs and his company’s products.
But AT&T says its network really isn’t as bad as many people think Online payday loans. It’s a perception problem, not a service problem, in the company’s eyes.
"There’s a gap between what people hear about us and what their experience is with us. We think that gap is beginning to close," says Mark Siegel, an AT&T spokesman. "It doesn’t mean we’re perfect; we still have work to do. But that’s no surprise to us, because we have a great network."
AT&T’s ‘problem’ that everyone wants
Meanwhile, AT&T (T, Fortune 500) continues to reap the rewards of being the country’s exclusive iPhone provider.
Despite heavy data demands that drive up AT&T’s cost of servicing each customer, users still make the wireless company $50 more per customer each year than other providers get from their smartphone subscribers, according to Yankee Group. That’s because a higher percentage of iPhone customers buy pricey, top-tier service plans to satisfy their mobile download demands.
The iPhone will be worth $1.8 billion in sales to AT&T this year, and will generate $9 billion in revenue for the provider over the next five years, the study estimates. Yankee Group says that’s $750 million more each year than AT&T would be taking in if it had a different flagship smartphone.
The iPhone is also the gift that keeps on giving: 77% of iPhone owners say they’ll buy another iPhone, compared to 20% of smartphone customers who say they’ll buy an Android phone. (See correction below)
"Our analysis explains why AT&T has bent over backward to keep its exclusive distribution deal with Apple as long as possible," Howe says. "Verizon has been regretting turning away Apple for the last three years."
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