Smart trumps cheap in phone world

Josh Weiss makes a test call from his newly purchased smart phone

TEXT OF STORY

Steve Chiotakis: Some telecom heavy hitters report this week. Verizon releases earnings today; Sprint and Qwest on Wednesday. And with fixed phone lines on the decline, the name of the game these days is wireless smart phones. A lot of wireless carriers are still feeling the heat from AT&T and its partnership with the Apple iPhone. Here's Marketplace's Dan Grech.


Dan Grech: There aren't many Americans left who don't have a cell phone. So when a wireless company wants new customers, it has to steal subscribers from a competitor.

Scott Cleland is a telecom analyst with Precursor:

Scott Cleland: The U.S. has probably the most competitive wireless market in the world. Paying the lowest prices. And Americans use more wireless than any other nation in the world.

Wireless companies compete in two directions: the lowest price and the snazziest phone.

Industry analyst Jeff Kagan says despite the recession, smart is trumping cheap:

Jeff Kagan: The smart phone segment of the wireless industry is still exploding. It's the plain old handset market that's actually very soft.

Thanks to an upgraded iPhone, AT&T is persuading people to switch carriers. The company activated 2.4 million iPhone accounts in the second quarter. Still, Verizon Wireless, with its 88 million customers, continues to be top dog.

I'm Dan Grech for Marketplace.

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