iPhone may boost Cingular's reach

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BY TIM SPANGLER
Medill News Service | Saturday, January 13, 2007 | (No comments posted.)

Cingular Wireless could see a flood of new customers looking to buy Apple's recently unveiled iPhone. The company announced this week that it will be the exclusive carrier for the iPhone when it is released in June.

A salesman at one of Cingular's Loop stores said Thursday that several customers have stopped in to inquire about the iPhone since Tuesday's announcement.

For consumers, this means there are six months to get out of their current mobile phone contracts. For providers, it means there are still six months to figure out how to build customer loyalty before a potential iPhone tidal wave.

The iPhone is Apple's first entry into the competitive mobile phone market.

Essentially an iPod fused with a smart phone. The device is set to be released in June, with a 4-gigabyte model priced at $499 and an 8-gigabyte model priced at $599. Buyers will be required to sign a two-year service contract with Cingular.

The iPhone is not the first popular phone Cingular has carried exclusively.

In November 2004, the company was the first wireless provider in the U.S. to offer the Motorola RAZR. Later T-Mobile began distributing the RAZR, followed by Sprint, Verizon and other providers in 2006. Once an elite status symbol, the RAZR is now the most popular mobile phone on the market, with more than 50 million units shipped.

"A lot of people would definitely see (the iPhone) as a status symbol," said Suzanne Fogel, chair of the marketing department at DePaul University, citing the cost of the device and its "cool factor" as reasons for its appeal to status seekers. But she also said that the iPhone is not going to become commonplace overnight.

"Only people who can really swing the financial end of it are going to have it first," she added.

How can other wireless providers avoid losing droves of customers to Cingular once the iPhone debuts?

Aaron Radelet, a spokesman for Sprint, said that the company can compete with Cingular based on its current offerings, including its over-the-air music download store.

DePaul's Fogel disagrees.

"Make an agreement with Apple," she said. "They (other providers) can't compete in this particular niche."

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