ThoughtPiece: Why AT&T/Cingular Gets Most of the New BlackBerry’s First

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With rumors of the new BlackBerry 8300 surfacing, the drama is played out once again. People invariably ask which carrier will be the first to get this new device, with each person rooting for their own carrier like they do their favorite sports team. I can relate; where I live Verizon has the best service, yet is always a Johnny-Come-Lately where BlackBerry’s are involved.

Yet by now the question should not be a mystery any longer: in most cases it will be AT&T/Cingular that will get the new BlackBerry devices first. The reasons are driven by pure economics, and will not change until and unless there is a major change in the fundamentals of the mobile market.

First, Cingular operates on the GSM system technology, which is by far and away the most popular in the world. As for December 2006 (according to Informa Telecoms and Media), a whopping 84% of all cellular customers were on the GSM standard. If you are going to manufacture a device, why not put first priority on the version that can operate on the technology that 84% of the market uses?

Which market would you rather target first: the over 2 billion GSM subscribers, or the over 300 million CDMA users? It’s not a difficult decision. (If you want up to the moment numbers of GSM subscribers, you can visit GSM World and see their counter update second by second; the numbers are quite amazing when you think about it.)

Second, Cingular is in the U.S., and the American market is by far and away the most lucrative and prestigious for RIM. For fiscal year 2006 64.7% of total revenues for RIM were derived from the United States. RIM is going to show its love to the U.S. market first.

Third, Cingular is the largest carrier in the US and certainly by far and away the largest American GSM carrier. As of the end of the 4th Quarter 2006, Cingular reported 61 million subscribers compared to the only other American GSM carrier, T-Mobile, at 25 million. Factor in Cingular’s larger network of retail outlets and greater marketing power, and again, it’s not a difficult decision as to which carrier to favor. Cingular may pay vendors like RIM extra dollars for some exclusivity on new releases, but being such a larger carrier they are in a far better position to do so. No matter what the consideration, a vendor like RIM will see huge advantages to releasing first on Cingular vs. T-Mobile.

Sure, there may be exceptions, such as when the Pearl debuted on T-Mobile. However, as I’ve written about before, I believe that RIM actually preferred the smaller carrier with the better customer service to debut this pivotal product for them. T-Mobile was in essence a kind of a soft launch for RIM’s first entry into the consumer market.

I should also note that I have called for RIM, while not in any way pushing back the release schedule for GSM equipment, to release CDMA versions concurrently or at least with minimal time lag. My reasoning for this is that the number 2 carrier in the crucial US market is the CDMA-based Verizon, which has over 59 million subscribers, and is the leader in customer loyalty. I do find it interesting that the next rumored BlackBerry release for Verizon is a hybrid model that will operate on both CDMA and GSM networks.

The bottom line: As long as GSM technology dominates the world cellular markets, and as long as AT&T is the most popular American GSM carrier, the odds are that any given new BlackBerry release will be first on AT&T. Expect it.

  • ty
    so true but

    cdma is still a better network =P
  • Matt
    I agree with everything in your article, except for that apostrophe in 'Blackberrys' in the title. That has got to go. Nice piece.
  • Marvin
    I still call it cingular d!ck riding. plain and simple.
  • Thought
    Thanks, bN and George, for your very gracious comments.
  • George Burnett
    I couldn't of said this any better. It is a bit upsetting when you constantly see people whining about why Verizon didn't get a certain phone first especially when it comes to RIM devices.

    GSM rules over the market. Why would any manufacturer build a device for anything else other than GSM carriers off-the-bat.
  • b.N
    This is so cold and logical that the tears won't stop flowing. Today I found out there is no Santa, Tooth Fairy, or GOD, all in one swoop!

    -disheartened t-mob customer

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