January 28th, 2009

iPhone vs. Storm: I finally made my tough decision

Posted by Sam Diaz @ 8:30 am

Categories: AT&T, Apple, Earnings, General, RIM, Research In Motion, Verizon, iPhone

Tags: Apple iPhone, AT&T Corp., Keyboards, Digital Music, Digital Media, Handhelds, Hardware, Peripherals, Personal Technology, Consumer Electronics

I bought an iPhone - opened an AT&T account and the whole bit.

Two weeks later, I took it back, cancelled the AT&T account and walked straight to the Verizon Wireless kiosk across the mall, where I bought a Blackberry Storm. And though it’s only been a few days, I’m already getting the hang of the touch screen click-typing. I have 30 days to change my mind, but… well, we’ll see.

Also see: A tough decision: Grab an iPhone or wait for the Storm?

But back to the iPhone. Giving it up was not an easy thing to do. I really wanted to keep it. But I just couldn’t justify paying $105 (plus tax) every month for a phone that had trouble connecting and completing calls. For me, the AT&T service was horrible. Maybe that’s not the case for iPhone users or AT&T subscribers in other cities. Maybe it’s not the case for iPhone users in other parts of my own city. But it was definitely the case for me - and I’d heard from plenty of others both here in Silicon Valley and in other cities that AT&T was not the most reliable network.

So, I did what I should have done in the first place. I exchanged the iPhone for an iPod Touch instead. I’ve said this before but it’s worth repeating in this context - the future is the iPod Touch, which is basically the iPhone without that pesky two-year AT&T contract. It’s a solid product that gives me everything I liked in the iPhone - the apps, the music player, the video and WiFi web-browsing - without dropping $100-plus every month.

As for the Storm, it’s also a solid product - an assessment based on only a few days with it, though I used a Blackberry before my stint with the iPhone so I was already comfortable with how it works. Beyond the design of phones like the Storm, the Blackberry is becoming more of a software contender with the iPhone, taking a more aggressive push into apps, music, video and, now, touch screen technology.

So, when it comes down to it, the network really does matter.

When Apple reported its December quarter results last week, it said sales of the iPhone were down 37 percent from the previous quarter, which was when the device launched. At the same time, iPod sales were well above expectations, 22.7 million, compared to the 20 million that had been expected. But it’s hard to go out on a limb and say that the iPod Touch is cannibalizing the iPhone when Apple’s not telling us how many of that 22.7 million were Touch devices.

On the wireless side, let’s consider the following:

• Verizon, which reported its financial results yesterday, didn’t break out the numbers on the Storm, which launched in November and then immediately ran into inventory problems. Larry Dignan, who posted an entry about the quarter, notes that, had the company sold iPhone like numbers, it would have highlighted that point - even without sharing the hard number.
• Verizon’s Wireless had a churn rate of 1.35 percent.
• AT&T said Wednesday that it activated 1.9 million iPhone 3Gs in the fourth quarter with 40 percent of those activations representing new customers. AT&T also noted that it iPhone customers deliver higher revenue per user and have lower churn rates.

I won’t try to sway anyone toward an iPhone, a Blackberry or any other device. I feel like I made the right decision for my circumstances. But I wish I would have applied the very advice that I’ve been giving out for years: shop for the plan and the service, not the phone. Any phone could be the best device in the world, but without good service, it’s just a brick.

Or in Apple’s case, it’s an iPod Touch.