Carriers have a love/hate relationship with the iPhone. They hate Apple's control (because they want that control for themselves) but love the money and customer-retention having the iPhone on their network brings them. Sprint's willingness to pay damn near all the money in their pockets, and delve into whatever passes for a corporate second mortgage, proves that that point.
AT&T, Verizon, and Sprint sell Android because they want to. They sell iPhone because they have to.
Apple isn't exactly easy to deal with. Android gives carriers far more control, generally requires far less up front investment (in terms of subsidies), and promises a thus far inexhaustible cornucopia of new devices to thrust at consumers on a seemingly weekly basis. It just doesn't generate the revenue or reduce customer churn the way the iPhone does.
They tried. They really did. Verizon pushed the Droid and Sprint pushed the Palm Pre and the EVO. They had successes to be sure, especially in sheer volume of units sold. But they never came anywhere near iPhone levels of profit or customer loyalty. And at the end of the day, even for carriers, that's what matters.
Not that you'd know it by looking at their websites. Go to Verizon.com or AT&T.com or Sprint.com and iPhones have little to know home page presence and remarkably little wireless site presence.
Verizon's home page features the eye of Sauron the Droid. Their wireless page does have the iPhone in the first of three small blocks at the bottom, but the massive feature boxes are filled almost entirely by Android. There's even a token BlackBerry thrown into the mix. But no iPhone.
This despite Verizon selling 3.2 million iPhones last quarter, accounting for more than half the smartphones they sold (i.e. the iPhone outsold all Android and other smartphones combined.)
AT&T's home page is all about Windows Phone and Android, with Nokia grabbing one of the hero slides and HTC and Samsung getting the other two. On their wireless page Nokia repeats in the spotlight, with Android and cheapy phones playing backup. There's no iPhone in sight.
Yet AT&T sold 4.3 million iPhones last quarter, which was 75% of all the smartphones they sold, and 60% of all the on-contract phones AT&T sold period (including feature phones).
Sprint's home page has the iPhone in the third of four feature spots, and the fourth of four bottom blocks. They don't have a separate wireless page, so their home page does double duty.
Still, Sprint managed to sell 1.5 million iPhones last quarter. They don't break out how many smartphones in general they sold, however, so there's no way to calculate the iPhone's percentage of total sales.
And that's just in the U.S. Internationally, Apple sold over 20 million iPhones. Rogers in Canada reported 35% more iPhone activations, year-over-year, compared to just 20% more smartphone activations overall. (And their home page features Android and Windows Phone, and iPad, and their wireless page shows an iPhone only in a block advertising their Find my iPhone-like Phone Finder service.)
So with little attention, ad spend, and product placement, Apple's iPhone still accounts for most of the carriers smartphone -- if not all phone -- sales, and reduces their customer churn. And that probably drives them up-the-wall crazy.
Apple, who doesn't let them festoon the iPhone with their revolting logos, clog it up with their dodgy crapware, allow them to delay or refuse software updates, or arbitrarily alter casing designs, and charges them among the highest up-front prices of any manufacturer in the industry, is increasingly responsible for their financial and customer success.
And it doesn't even have LTE (yet) or a ginormous screen (likely ever).
If carriers had their druthers, manufacturers -- including Apple -- would be little more than dumb assemblers (much as, if customers had their druthers, carriers would be little more than dumb pipes). Yet as much as Verizon, AT&T, and Sprint would far, far prefer to sell the always amenable Android, customers, increasingly, want iPhone. So carriers increasingly have to deal with Apple. Even if they continue to try to find viable alternatives.
That's why carriers will never go all-in on iPhone promotion. They don't want to become entirely dependent on Apple (or any one platform). It's in their best interest to have several, highly competitive platforms on the market that they can hedge with, and against.
Still, it's interesting to imagine a market where carrier manipulation didn't influences the market. Free to compete strictly on customers and merits, would smartphones be more like tablets, and would the iPhone have the same relative positions as iPad does to Android tablets, BlackBerry PlayBook, and the like? The same position the iPod had in the carrier-free MP3 space?
