Rivals Prepare for iPhone Debut

SAN FRANCISCO With Apple’s iPhone due to debut in a month, the wireless wars heated up last week among AT&T, Verizon and T-Mobile.

AT&T, the iPhone’s exclusive U.S. service provider, accelerated the process of rebranding its former Cingular stores on May 21-22 to get the maximum benefit from the growing buzz surrounding the new product.

During the same period, T-Mobile unveiled its own version of the iPhone, called the Wing. The Internet-enabled, WiFi equipped device retails for $299 with rebates. Not to be outdone, Verizon executives said in published reports that they would unveil a new WiFi mobile phone in late summer.

Apple’s iPhone is billed as a well designed, easy-to-use wireless phone, music player and Web-access product. Apple’s lead agency, Omnicom Group’s TBWA\Chiat\Day in Playa del Rey, Calif., is handling the iPhone’s intro.

Critics maintain its hefty starting price of $499 will limit its overall appeal.

“The introduction of the iPhone will have a big impact on the mobile market globally,” counters Daniel Rosen, director of AKQA Mobile.

Aside from the popularity of its design and simplicity, iPhone poses another threat to carriers: “It is similar to the iPod in that users download music from their computers” in order to put it on their phone, he said.

That’s bad news for carriers “who prefer that phone users pay to download music using the phone networks that they have been spending millions of dollars to build in the last few years.” he said.

AT&T agreed to ignore the problem because “they recognize that this phone will be a must-have item for so many millions of iPod fans. AT&T will most likely win significant market share from competitors [whose customers] will want to have an iPhone more than they want to stay on their existing mobile-phone contract,” Rosen said.

Some analysts said the low-tech approach of the iPhone could help the mobile phone industry overall by raising the awareness of new services and content, pointing to the effect the iPod had on digital music. (A 2006 report by Jupiter Research said the emergence of the iPod drove acceptance of all digital music products.)

Executives at shops that handle phone-carrier accounts generally downplay the iPhone’s potential impact, treating it as another new product launch, rather than a category changer.

However, Bob Moore, CCO of Publicis USA, who oversees T-Mobile, said significant new advertising and nontraditional marketing for the T-mobile brand will begin in the third quarter, right after the iPhone launch. “The next 12 months are going to be an exciting time in the industry,” he said.