AT&T’s iPhone Dominance on the Decline, Sprint Cannibalizing Verizon

With more carriers offering the iPhone than ever before, it is glaringly obvious that AT&T’s share of iPhone customers has to be on the decline, but by how much?

New research carried out by Localytics offers an insight into just which carriers US buyers sided with when deciding to buy an iPhone, with the iPhone 4S launch seeing Sprint join the fray. While AT&T’s share of the iPhone market has fallen slightly, Sprint is starting to put a dent into Verizon’s former customer base…

Sprint’s entrance into the iPhone market has seen AT&T’s share of iPhone customers fall from 60% to 56%, according to the report. It is Verizon who has suffered the biggest loss. When the iPhone 4 launched on its network, Verizon took 40% of the iPhone market in the US. Now, with Sprint offering both the iPhone 4 and 4S to customers, Verizon’s 40% is down to 32%.

Sprint finds itself with a healthy 12% — not bad for a company that has only been offering an iPhone to customers for a few weeks.

The reason for the swing, according to Localytics, is the fact that Verizon’s iPhone-toting customers still have nearly two years on their iPhone 4 contracts. AT&T, by contrast, has thousands of iPhone 3GS customers with older handsets desperate for an upgrade.

“Looking at iPhone 4 distribution as a comparison, Sprint seems to have eroded more of Verizon’s market share than AT&T’s – of the previous-generation handset, 60% are on AT&T versus 40% on Verizon.

A likely driver for these differences is the fact that AT&T can mine its existing base of iPhone users. Because all Verizon iPhone users are in the first year of their wireless contract, the cost of upgrading will be high. However, many longer-term AT&T users, especially those holding iPhone 3GS and earlier devices, are off-contract or nearing the end of their contract. AT&T has been aggressively leveraging the iPhone 4S to sign these customers to new two-year contracts, and the data in this study suggests that tactic may be working.”

Makes sense to us!

Which carrier did you go with for the iPhone 4S, and more importantly, why?