Note: This story was updated on Feb. 3, 2011 to reflect new plan pricing information and availability. The Verizon iPhone pre-orders for existing customers started Feb. 3.
Verizon subscribers have been> a stalwart bunch. While AT&T (T)
Some 9 million current Verizon subscribers are expected to upgrade to the iPhone when it becomes available (on Feb. 3) -- representing 75% of the iPhones Verizon (VZ)
Even so, those otherwise rational, patient Verizonites will buy anyway, says "Buyology" author Martin Lindstrom, a branding consultant who has studied the effect of marketing on the brain: The same qualities that have made current subscribers loyal to Verizon make them prime targets for the cult of Apple.
Turns out, it's not merely a battle of the geeks (Verizon Android loyalists) and the cool kids (iPhone lovers); consumers have a little bit of both in them. But Verizon partisans have already displayed their loyalty, a quality Apple aficionados are famous for. In Lindstrom's studies, Apple loyalists had similar brain scans to those of devout Christians. Considering that Verizon customers have probably owned one or more of the nearly 300 million iPods sold, the opportunity to consolidate their affections is particularly potent. Already the availability of a new handset is enough to drive Apple's devoted fan base to buy, regardless of the cost or how satisfied they are with their current phone, says David Shepherd, a professor of marketing at Georgia Southern University. (Need proof? Apple devotees who left Verizon to get an iPhone with AT&T have registered consistent complaints about the actual cell service for the last 3.5 years, Lindstrom says.) Add in Verizon, and it's a very emotion-driven purchase that could override rational arguments about cost or need, says Lindstrom.
But Lindstrom and even Shepherd -- who admits he's "part of that following that'll buy whatever Steve [Jobs] tells me to"-- say Verizon fans who have been salivating at the thought of an iPhone on a superior network shouldn't let excitement drive their buying decision. "It's not really about the Apple product," Shepherd says. "It's about the network and the iPhone's intersection with Verizon's policies."
People who upgrade without a thorough assessment could find themselves paying more upfront and down the road, says Schwark Satyavolu, the president of cellphone plan comparison site BillShrink. So just for a moment, let your geeky, rational iPhone loyalist side come to the front of the line at least long enough to consider these five hurdles before you make the switch.
Verizon is letting consumers continue to pick their own buckets of voice and text plans. But it's requiring iPhone buyers to sign up for a $30-per-month unlimited data plan. That's an extra $15 per month more than other smartphone owners with the carrier are required to pay. (They also have the option of the $30 unlimited, but can get away with just a $15 150MB plan if desired.) It's also $5 more that AT&T iPhone users pay for a 2GB monthly plan -- a good thing if your data use is heavier than that limit, but an extra financial burden if it isn't.
App collectors, take note: developers make apps specific to each phone platform. They can't be transferred when you switch to a device on a different platform, says Brad Spirrison, managing editor for app review site Appolicious. You'll need to re-download them and re-establish your preferences and personal settings. That might not seem so bad just a little time wasted. But keep in mind that for paid apps, you'll have to pony up the access fee a second time. (iPhone owners switching from AT&T get a leg-up here; apps already downloaded to iTunes can make the move.) BlackBerry users have the most to gain from switching -- comparatively, iTunes has more free apps, and paid ones tend to have lower price points, he says. Android and iPhone apps tend to have similar price points, he says, although iTunes still has an edge on freebies.
Handsets and speed
Consumers' extreme emotional reaction to Apple tends to blind them to other handset options out there that may serve their needs better, Lindstrom says. "What distinguishes the iPhone is really the integration of hardware and software," says Ross Rubin, the executive director of industry analysis for market research firm NPD Group. It's an easy to use, almost intuitive device. But the latest Android phones share many of the same bells and whistles, and offer larger screens for video-philes, he says. The latest 4G handsets offer a speed the iPhone can't match as of yet, so buying an iPhone means giving up the super-speed they'd otherwise have when surfing the web or streaming movies.
Current subscribers can use their New Every Two credit (worth up to $100 for high-minute plans) or early upgrade privileges, but it's the last time -- Verizon ended the program Jan. 16 for new contracts and renewals. Verizon customers who aren't yet eligible to upgrade but who want to buy the iPhone anyway will have to pay full retail price for the handset. That's $450 more than new subscribers and upgrade-eligible Verizon customers will pay. You can get a credit, via prepaid card, of up to $200 if you're a Verizon customer who bought a new phone between Nov. 26 and Jan. 10 and now want an iPhone. But you'll still be on the hook for at least $150 more than the newbie price. (You'll have to give back that old phone by Feb. 28 to qualify.)
The iPhone 5
If Apple holds to its usual release habits, consumers can expect to hear about an iPhone 5 in June, with availability as early as July. Even if it isn't a game-changing upgrade -- early rumors include a slimmer handset and inclusions of a stylus pen -- in the past, new versions have trigged price drops on the previous generation of the phone, says Rubin. The iPhone 3GS dropped to $99 from $199, for example. And, if psychology holds true, it's pretty likely you'll want that newest phone (resale sites report huge spikes in listings for previous model iPhones--upwards of 1,500% when a new model is announced). But waiting half a year to make the switch could save you 50% on the older model--or get you a slightly better phone for about the same price.