Filed under: Competitive strategy, Apple Inc (AAPL), Marketing and advertising, AT and T (T), Research in Motion (RIMM), Verizon Communications (VZ), Qwest Communications Intl (Q), Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you like, and check out other Battle of the Brands posts.
“I’m like Ma Bell, I got the ill communication.” — Beastie Boys
When considering these two particular companies, it is important to note their roots as offspring of the famous “Ma Bell” network. The Bell System, which has produced the most complex ongoing series of mergers and break-ups in the history of the United States, is the origin of the companies that are now AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), as well as competitor Qwest Communications International (NYSE: Q). A lot has changed since those early times — remember, after all, that the second “T” in AT&T symbolized Telegraph. Now phones are the latest devices to be made supercomputers. AT&T has its exclusive deal with the Apple Inc. (NASDAQ: AAPL) iPhone, while Verizon slings the Research in Motion Ltd. (NASDAQ: RIMM) BlackBerry.
Since wireless is the way of the future, the wireless divisions of these companies is the most hotly contested, and the focus of this “Battle of the Brands.” It is important to note that despite Verizon Wireless bearing solely Verizon’s name, it isn’t owned by just them, it is a 55%-45% joint venture between Verizon and Vodafone Group (NYSE: VOD). It is also important to note that AT&T Mobility is the service formerly known as Cingular, which was acquired by AT&T in 2006 when it purchased BellSouth for $86B.
Looking first at Verizon Wireless, its strategy is easy. It focuses on the strength of its network as its main selling point. From the company’s “Can you hear me now?” ads, to the current “It’s the network” ads, the point the company conveys is that if you’ve Verizon, you are covered by the biggest and most reliable network. AT&T’s most memorable current ads may be Martin Scorsese “We won’t interrupt your phone calls, please don’t disturb our movies” ads that play at the cinema, but the company also runs television ads that focus on “more bars in more places,” which echoes a very similar message to Verizon’s about the strength of their network.
There are arguments that can be made that either network is superior, depending on your metrics — coverage area, dropped calls, strength of signal — but what matters with branding is perception, and the edge in network perception goes to Verizon Wireless, which has spent years building its image as the better cellular service.
However, network is not the entire argument. There’s also the important matter of the hardware available on each service, where AT&T took a significant lead when it signed an exclusive contract with Apple to carry its iPhone exclusively. The reason for its significance is not only that users selected AT&T over Verizon for the highly desirable device, and not just because some Verizon users switched to AT&T to get one, it is also the type of customers it got. It got the tech-savvy, 18-24 users that use more minutes, text frequently, and use data plans. These users are good for far more revenue than the older users with minimal plans that just need a good network to use their cell phone in case of an emergency.
Both companies have high-quality networks, advertise extensively, offer a ton of different cell phones, and have similar pricing models, so, like most of these “brand battles,” the decision comes down to personal preference. One thing is for sure, with over 65 million users for Verizon Wireless and over 71 million users for AT&T Mobility, this is one rivalry that will not be over anytime soon.
Vote in our poll for Verizon Wireless or AT&T Mobility as your preferred brand, and let us know in the comments why you love it.
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