Apple Shows Vulnerability By Airing Counter-Attack To Verizon ‘Map’ Ads

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Apple Shows Vulnerability By Airing Counter-Attack To Verizon ‘Map’ Ads

Apple (NSDQ: AAPL) is obviously not happy with AT&T’s network reputation taking a beating—especially since it’s the only network in the U.S. selling its iPhone during the busy holiday shopping season.

Tonight, Apple will do its part to defend AT&T (NYSE: T) against Verizon’s ad campaign that has criticized the iPhone network as having more holes in its 3G network coverage than Verizon does. AT&T hasn’t been able to do much on its own. It lost a preliminary injunction in federal court, and then launched its own ads with Luke Wilson, which touts AT&T as the “nation’s largest network.” The heart of the problem is that so far Verizon’s ads have been viewed as truth, not spin. Apple’s ad, which will air tonight, may be slightly more convincing since it focuses on AT&T’s ability to hold a simultaneous voice and data connection at the same time—something you can’t do on Verizon Wireless (NYSE: VZ). BusinessWeek reports that in two different ads, Apple touts both business and social scenarios. In one, you can look at an email from a client while you’re still talking to him and in another, you can send your friend directions to the movie theater while you’re still talking.

Verizon has been careful to attack AT&T, and not so much the iPhone—although one is hard to do without affecting the other. And clearly, Verizon’s Motorola (NYSE: MOT) Droid commercials come a lot closer, especially since the Droid is being positioned as an alternative to the iPhone. Whether it will affect Verizon’s chance at forming a partnership with Apple to eventually get the iPhone on its network, it’s unclear. According to the latest round of rumors, AT&T’s exclusive contract with Apple’s iPhone expires in June 2010. Broadpoint AmTech’s Brian Marshall said in an Bloomberg TV interview Friday that in addition Apple’s subsidy it gets from carriers will drop from $450 to $300 for all carriers, domestic and international starting in June, reports CNNMoney.com.

The ads will appear tonight during “House” on Fox, “Dancing With The Stars” on ABC, “How I Met Your Mother” on CBS (NYSE: CBS) and several others including The Daily Show on Comedy Central and several of the late-night talk shows.

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Tricia Duryee

@triciad Nov 23, 2009 3:59 PM ET

Photo: BusinessWeek

Posted In: Companies, Apple, iPhone, AT&T, Verizon

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AT&T is just doing this to get back at Verizon, because a judge overruled AT&T’s lawsuit against them last year which gave Verizon permission to put AT&T down, so now AT&T is just doing these attack ads with Luke Wilson to try to steal Verizons customers away by bribing people with these phony perks of being an AT&T customer instead of a Verizon customer.

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Jamie Poitra

vzw_test, I wasn't making any kind of argument about other issues AT&T has had. And as I think you know from the tone of you comment Edge doesn't do the simultaneous internet and voice call stuff.

Here in Portland the network issues have been pretty small and I'm generally on a very strong 3G signal. I were having the issues I hear about in NY and some other larger cities I imagine I'd be frustrated.

vzw_test

@Jamie: So while the most of us (iPhone users) are on edge and hardly able to get or make a call, will this simultaneous task still work? Oh, 'when' I can get or make a phone call…. on AT&T.

Jamie Poitra

Apple's tactic on this one is much smarter than AT&Ts;. They tried to make it look like there is a big list of better things about their 3G which isn't really true.

On the other hand the one real advantage AT&T has is the one that Apple's highlighting. And I have to admit I've used it A LOT on my own iPhone. I often get calls from people asking for google maps directions because they know I can help them out while keeping them on the phone.

Whether it's a good thing that I now have to give everyone directions is another thing entirely. :)