iPhone Discrimination: Why Reps At The Big Carriers Don’t Want To Sell You Apple’s Smartphone [Feature]

iPhone Discrimination: Why Reps At The Big Carriers Don’t Want To Sell You Apple’s Smartphone [Feature]

Walk into your local AT&T, Verizon or Sprint store and ask to look at the latest and greatest smartphone. A store employee will show you the Samsung Galaxy lll and other Android phones from the likes of HTC and Motorola. You may be shown a Windows Phone like the Nokia Lumia 900. At Verizon, you’re definitely going to be shown about the Motorola DROID RAZR 4G.

You won’t get pitched the iPhone as easily. In fact, many walk into a store with the plan of buying an iPhone and come out with the latest Android phone in hand.

Why? Employees and customers we’ve spoken to agree that sales reps from all three big carriers discriminate against the iPhone on the store floor, but it’s not a conspiracy: profit margins and device-specific incentives pressure employees to intentionally steer customers away.

Jeff Stern recently published an open letter to Verizon on his blog in which he said that his local store reps were “really trying too hard to steer people away from the iPhone,” noting that, “I’m not the only person that’s noticed it.” Many online commenters echoed Stern’s opinion, and Verizon later issued an official statement to Cult of Mac in response.

“If I sold 70 phones and 50 of those were 4G phones, I got a lot more roll up. More than half the staff personally had iPhones but were selling DROIDs due to the commission change.”

“Verizon Wireless representatives are trained to help customers choose the device that best meets their needs,” a spokesperson said. “We take great pride in offering a robust portfolio of devices that give customers options that range from the most sophisticated smartphones to the most basic handsets.  Our only goal is for customers to leave the store with the phone that gives them the best wireless experience.”

Several months ago, Verizon implemented an internal policy that gives reps a $25 sales dollar roll up for every 4G smartphone sold. “For every 4G phone you sold you received an extra $25,” explained an anonymous rep who left Verizon last month. “So if I sold 70 phones and 50 of those were 4G phones, I got a lot more roll up. More than half the staff personally had iPhones but were selling DROIDs due to the commission change. A few reps badmouthed the iPhone and said that it’s only going to have problems and made up things to imply that the DROID was far superior.”

iPhone Discrimination: Why Reps At The Big Carriers Don’t Want To Sell You Apple’s Smartphone [Feature]

Verizon sells multiple DROID phones from Motorola, all of which are 4G. The iPhone remains one of the only flagship devices left without 4G data speeds. According to rumors, the next iPhone will be unveiled next month with 4G LTE. “I have heard that once we have a 4G iPhone, we will stop receiving the extra incentive for selling 4G,” noted another Verizon source.

Jeff Stern’s blog post about his experience at Verizon followed a recent story from Boy Genius Report titled, “AT&T orders retail staff to sell anything but the iPhone.”

“Regional retail sales managers at AT&T have been instructing store managers to pump the brakes on Apple’s iPhone,” reported BGR. “Instructions handed down from corporate state that customers seeking smartphones at AT&T retail stores should be steered away from Apple’s iPhone and towards Android phones or Windows Phone handsets like the Nokia Lumia 900 instead.”

In response, AT&T said, “The idea that we would steer any customer away from a particular device couldn’t be more farfetched.”

“The idea that we would steer any customer away from a particular device couldn’t be more farfetched.” – AT&T

Does it really sound far-fetched that reps would try to sell certain devices to make more money? It’s not that this is some huge conspiracy against Apple; store floor discrimination is merely a byproduct of a corporate environment that elevates profit margins above something as subjective as customer experience.

“After 45 mins of the salesperson sternly pushing an Android phone and basically bashing the iPhone in all kind of ways, he finally, very reluctantly I might add, sold us what we came in asking for,” said an AT&T customer. “I’m no dummy, hell I’m a tech geek in fact. I do my homework and I walk in a store knowing exactly what I want. I was absolutely astonished at the lengths this salesperson went to trying to sell us on Android, it was almost disgusting.”

“There were third-party AT&T locations that did nothing but steer customers away from iPhones and towards Android,” explained an anonymous AT&T representative who recently left the company. “The reason being that they were paid more for selling Androids, or at least anything besides the iPhone. Because of this, we received numerous and almost countless complaints from customers who found their Android device to be subpar. The iPhone was clearly the superior machine, and they could have purchased it for the same price in many cases. It was a hassle to send them back to the third-party to return the phone, and an even bigger hassle to have the reps at their locations reverse contracts. Though the process was instantaneous, they would claim it would take days once initiated. But too often it would take days to convince them [the reps] to do their job, accept they weren’t getting paid at all now, and actually reverse the contract.”

“Our reps do what it takes to align customer needs with the best device for them,” AT&T told Cult of Mac in an official statement. “The iPhone remains one of our most popular devices, which doesn’t happen by steering people away from it.”

Reps feel pressured to meet their quotas by selling non-Apple smartphones.

AT&T and the other big carriers aren’t explicitly telling employees to stop selling iPhones. Instead, the internal focus has simply shifted to, “Let’s sell Android and Windows phones!” The tactic isn’t as directly subversive, but reps feel pressured to meet their quotas by selling non-Apple smartphones.

“There weren’t any memos, to my knowledge, that spelled it out that clearly, but it was obviously between the lines,” noted an AT&T employee who wished to remain anonymous. “The stories and memos we did see were from those higher up who had dropped their iPhone and were having a better time with Windows or Android. That was during the time they stopped allowing company-owned iPhones.”

When Windows Phone 7 devices started selling on AT&T, employees were banned from carrying iPhones as company-owned devices. “That both helped and hurt iPhone sales,” explained a store rep. “When we would tell customers the iPhone was the greatest, they’d ask why we weren’t carrying it. That would sometimes defer folks. But then we’d add that we hated the phone we were carrying and wished we had the iPhone again. That helped others.”

Sprint did not start carrying the iPhone until last year. According to sources within the company, the same sort of favoritism is shown to non-Apple devices. A Sprint customer’s experience with an online sales rep perhaps sums it up best:

iPhone Discrimination: Why Reps At The Big Carriers Don’t Want To Sell You Apple’s Smartphone [Feature]

“As a rule, Sprint doesn’t guide customers or our reps to sell one device vs. another,” Sprint said in an official statement. “Ultimately, we think the customer sales process should dictate device selection, rate plans, attachables and accessories.  When our sales people assess customer needs correctly, get the customer on the right device and help them use it effectively, we’re more likely to benefit in terms of overall customer lifetime value, especially fewer returns & exchanges, higher ARPU and lower churn.”

While it’s true that iPhone accessories sales bring in a huge amount of profit for carriers, the higher subsidies on the device itself negatively affects carriers’ bottom lines. Sprint’s CEO has been very vocal about the company’s decision to partner with Apple, saying that taking on the iPhone is a long-term investment. Fortunately, the iPhone has an unusually high customer retention and satisfaction rate.

Each iPhone sold costs carriers about $100 more in subsidies than the average Android device over the course of a two-year contract. When you consider that Apple sells millions of iPhones each quarter, the numbers add up. iPhone users are also widely considered to be the most data hungry smartphone customers, as evidenced by AT&T’s network strain during the years of its exclusivity deal with Apple. Carriers often rely on device bundles and special promotions for profit, and Apple rarely, if ever, participates. The iPhone was the first smartphone without a carrier logo, and Apple refuses to load carrier bloatware.

Another explanation would be that these carriers don’t want to be only known for selling the iPhone. AT&T took a bet when Steve Jobs convinced the board to sell the iPhone years ago, but since then Apple has become an industry leader. The iPhone doesn’t need a certain carrier to survive anymore. Customers have more choices than ever before.

The iPhone doesn’t need a certain carrier to survive anymore. Customers have more choices than ever before.

iPhone Discrimination: Why Reps At The Big Carriers Don’t Want To Sell You Apple’s Smartphone [Feature]

The iPhone continues to sell well on three of the big carriers, but imagine what the sales numbers would be if every customer who walked into a store wanting an iPhone walked out with one.

“I am a huge iPhone fan,” admitted an anonymous Verizon sales rep. “The iPhone has a smaller return rate and is definitely one of the easiest phones to use. I don’t think it’s right that I have to push more DROIDs because it makes me more money, especially when a customer asks me what kind of phone I like personally. It’s wrong that I have to lie. But hey, it’s a paycheck.”

  • gnomehole

    We all know this has been happening for a long time. Makes the whole “winning” thing Fandroids throw out pretty stupid. Seeing how one company takes on all these plastic (often cheaper and sometimes nearly free) phones makes me wonder really who is “winning”…

  • Steffen Jobbs

    If it’s true, then it’s a damn shame Apple can’t retaliate against those carriers. I’d say those carriers are definitely trying to undermine Apple’s iPhone sales. I do see where the the salespeople are coming from. It’s nothing personal, it’s just business for them to increase their paychecks. I still consider it customer deception trying to sell customers Android smartphones when they really wanted iPhones. Apple would need to offer sales incentives to salespeople, but Apple is too cheap a company to offer something like that. Apple better just continue building more Apple retail stores where they can sell iPhones and won’t be backstabbed. Maybe Apple should put out some ads saying telling consumers that if they go into a carrier to buy an iPhone, they should refuse to leave with any other smartphone. At this rate Android smartphones will continue to win all remaining market share. There’s no one on Apple’s side.

  • shipguy

    I worked left AT&T in February and blogged about my experience working there in May. I think I’m unique in that I’ve worked at both AT&T and Apple retail.

    Here are my thoughts:
    http://shipguy.wordpress.com/2012/05/25/my-schizophrenic-experience-at-att/

  • Bruce Schrock

    Cell phone companies no longer respect the individual (or did they ever respect the individual?). Apple has seriously raised the bar when it comes to customer service and the rest of the tech world is struggling to keep up.

  • Bob Smogango

    I have a friend that bought a Galaxy to replace her stolen iPhone. Here’s a little story. She’s not technologically savvy, but she was intrigued by the bigger screen and she was told it was “upgradeable”. SD slot is not an “upgradeable” feature, it’s meant for transferring data on slower and less reliable storage cards than SSD memory. But she didn’t know. Then she also had two problems. Number 1, she doesn’t work/live in a 4G/LTE area, yet. The other thing is that when she compares quality of service to her boyfriend’s iPhone, the iPhone (4S, I believe) is much better. In addition, when she sends text messaging, what gets received on the other end is different than what she sends. She has replaced her phone at least once, that i know of. She also has had a month on it, and she says it’s not user friendly and she wanted to give the phone back to Sprint to get an iPhone, but I don’t think they would let her. Now, she is waiting to get an iPhone 5, and I indicated to her that it was VERY likely that one would appear on the market in the next month or so based on the mass amounts of publicity. She can’t wait.

    So, I had to explain to her that this is what is going on right now and the people that are not aware of what’s going on might get suckered into it. I will tell you one thing, even without me talking to her, she was PISSED at how badly the Galaxy worked. She though it was a worthless phone compared to her iPhone that got stolen.

  • mazhak

    I would say the biggest discrimination is to sell iPhones exclusively for the 3 mentioned companies in the article. What about T-Mobile users? They can’t have iPhones from the store, and even if they get them, they end up using a slow non-3G service, EDGE, if subscribed to mobile Internet service. Also, not just for an iPhone, but for any other phones, a consumer has no choice but to buy a phone model that is offered by the carrier! In other words, if you pick a carrier in the U.S., you are doomed with the limited choices offered. And then you have to unlock them if moved to another carrier or throw them away because each carrier supports a different frequency technology.

    Everywhere else in the world however, there is only one model of a smartphone that works with any carrier in any part of the world. So if I buy an iPhone from the U.K., it would work 3G in the U.K., in the whole Europe; Asia; Africa; … and in anywhere but the U.S. because there are GSM iPhone models and CDMA models, and they are incompatible and keep the customer crippled and forced to go with what the carries offer.

    I don’t care if I go to an AT&T store and then get an employee advertising me whatever device the store has. All I need is the freedom to buy any smartphone and have it work with any carrier I want disregarding to the monopoly and restrictions of each company.

  • club404

    Deceived, misleading, blah, blah, blah. It comes down to one thing, the carriers have been losing their shirts for the past couple of years and Apple has been making scads of money. Why? because apple refuses to reduce the cost of iPhones so that the carrier can make more. Until now carriers had given in the the demands of the consumers who wanted the iPhone, but something had to give.

    My guess, they’re sick and tired of losing money by putting an iPhone into a customers hand, so they push you towards one they can make money on, simple as that.

    Here’s a thought….Apple could lower the price and allow carriers to make a decent amount…..or if they don’t like that then Apple could buy their own carrier network.

  • SherylLeee

    This just sounds like they’re pushing 4g… not that they’re anti-Apple. Idk why anyone would go into a store to buy new tech without doing their own research and knowing what they want. I worked at Macy’s with a sales goal and if you came in looking for a red polo, of course, I’d show you the $90 Lacoste instead of the $20 Club Room to keep my job.

  • Ed_Kel

    I think you all are reading into this too much.. How often does someone go into a carrier’s store not already knowing exactly what he/she are there for? If I’m wrong and this is happening in massive numbers, who are we to care? No matter how hard a carrier tries to downplay iPhone it obviously doesn’t work. The adoration will always be there for Apple. Good read – moving on….

    Side note, after typing this comment I had to scroll down a country mile to post. Vanilla sucks.

  • bowlingGreen

    We all know this has been happening for a long time. Makes the whole “winning” thing Fandroids throw out pretty stupid. Seeing how one company takes on all these plastic (often cheaper and sometimes nearly free) phones makes me wonder really who is “winning”…

    By numbers, Apple is the #2 manufacturer, last time I checked. #1 is Samsung; which Apple is currently suing the living daylights out of (because anyone who beats us in sales must be stealing).

  • bowlingGreen

    Deceived, misleading, blah, blah, blah. It comes down to one thing, the carriers have been losing their shirts for the past couple of years and Apple has been making scads of money. Why? because apple refuses to reduce the cost of iPhones so that the carrier can make more. Until now carriers had given in the the demands of the consumers who wanted the iPhone, but something had to give.

    My guess, they’re sick and tired of losing money by putting an iPhone into a customers hand, so they push you towards one they can make money on, simple as that.

    Here’s a thought….Apple could lower the price and allow carriers to make a decent amount…..or if they don’t like that then Apple could buy their own carrier network.

    It costs Apple $200 to make an iPhone, and $650 at least for you to buy one. You’re right in saying Apple screws everyone — phone companies must buy at high prices, consumers buy into a closed ecosystem.

    Even if the iPhone WAS sold at cost (~$200) , the Foxconn workers that make them couldn’t buy one at cost if they saved a month’s worth of wages. That says a lot to me.

  • bowlingGreen

    Deceived, misleading, blah, blah, blah. It comes down to one thing, the carriers have been losing their shirts for the past couple of years and Apple has been making scads of money. Why? because apple refuses to reduce the cost of iPhones so that the carrier can make more. Until now carriers had given in the the demands of the consumers who wanted the iPhone, but something had to give.

    My guess, they’re sick and tired of losing money by putting an iPhone into a customers hand, so they push you towards one they can make money on, simple as that.

    Here’s a thought….Apple could lower the price and allow carriers to make a decent amount…..or if they don’t like that then Apple could buy their own carrier network.

    It costs Apple $200 to make an iPhone, and $650 at least for you to buy one. You’re right in saying Apple screws everyone — phone companies must buy at high prices, consumers buy into a closed ecosystem.

    Even if the iPhone WAS sold at cost (~$200) , the Foxconn workers that make them couldn’t buy one at cost if they saved a month’s worth of wages. That says a lot to me.

  • Bighoffa

    Carriers losing their shirt — really? Why did Verizon have its most profitable quarter ever?

    http://finance.yahoo.com/news/verizons-wireless-glows-broadband-hits-wall-153736526–finance.html

  • Tallest_Skil

    It costs Apple $200 to make an iPhone,

    Nope. Takes ~$200 to buy components for it. Takes more to build it, box it, ship it, market it, design it, prototype it, software it…

  • wiizzaarrd

    Here is another story that corroborates the experiences described in the article. A close friend had an purchased a Droid X from the NorthPoint Verizon Wireless Store in Alpharetta GA in February 2010. The phone constantly had problems and spontaneous reboots. In February 2011, she was no longer able to effectively use the phone so she went back to the same Verizon Wireless store. Even though the phone was just 1-year into the 2-year contract, the Verizon representative indicated that Verizon could not replace her defective phone and she needed to purchase another. The iPhone 4 CDMA was just released, so I suggested it as an alternative since she thought she had to pay the full subsidized cost and the $199 iPhone was a bit lower cost than a new Droid X2. The representative insisted that she would be disappointed with the iPhone and steered her away from the iPhone to the Droid X2. In addition, her son’s LG Envy which was a bit more than a year old was also experiencing stability problems and spontaneous reboots. Since he already owned an iPod Touch (generation 2) and had more than 100 applications including many games, I also suggested the iPhone 4 for him since the iPhone 4 would be a nice upgrade for his existing collection of applications including many games. The same representative indicated that the iPhone was a horrible game platform compared with the Droid and that the games were more plentiful and offered much superior game plan and graphics over the iPhone 4. She was steered to the more expansive Droid X2 for him as well. By February 2012, both Motorola Droid X2 phones were experiencing daily problems. They are both limping with their devices until their contracts expire since the only options provided to them by the same Verizon store is to replace these devices with yet another smart phone but definitely not an iPhone. I suggested that when the time is right, she should visit the Apple store in NorthPoint Mall and avoid the carrier retail stores. My advise is that if someone does not want or like an iPhone, go to the carrier store but if you want an iPhone, avoid all carrier retail stores and go to an Apple store if one is convenient and if not convenient, order online. The Apple store also provided superior support and will work tirelessly to get you new device set up and as much data copied from you old phone as is feasible.

    I have a customer whose husband wears his iPhone around his neck with a lanyard due to a debilitating medical condition. After more than a year of use, the iPhone 4 experienced problems. The Apple Genius Bar in Bethesda MD looked at the phone and when opening the back observed a grey sludge that was from the moisture of perspiration from wearing the phone and having it against skin under a shirt. She explained the situation truthfully and they simply replaced the phone although the exposure to moisture was definitely not an Apple defect nor was it covered under any warranty due to water exposure and the one year warranty was over – kudos to Apple Retail.

  • Bob Smogango

    The first thing about going to a store and talking to a sales rep is that sales reps have an obligation TO THE CUSTOMER to give a fair and UNBIASED assessment of products they carry. I’ve worked at a company where I was selling a variety of mfg of computer/software. I was INSTRUCTED by management that we, the sales staff, are to give UNBIASED advice on products to sell to our customers. Yeah, we were sometimes offered incentives by one mfg or the other from time to time, and it sometimes was difficult to give unbiased advice, but I at least gave the customers as honest advice or knowledge over the products that we carried.

    But, when a customer asks about a particular brand and the rep just automatically shoves them into another product with no REAL honest reason, that’s just flat out being dishonest in their sales approach.

    Personally, I have always hated walking into stores run by Cell Phone carriers. I thought that the level of “stereotypical” used car sales tactics were so obvious to me, I could smell it a mile away, maybe from my own background in sales.

    When I walk into an Apple Store, I feel comfortable since I know what I am getting into first. When I walk into a Best Buy, it’s not as comfortable.

    I was looking at a TV and the rep just automatically steered me towards a Samsung TV. He said he wasn’t on commission, but if Samsung gives better incentives than Sony, etc., then maybe that’s the reason.

    I didn’t buy anything because I still had to do more research. I found a YouTube video that cracked open a Samsung SmartTV and saw the guts of one and got turned off. Personally, I wish Apple did make a TV for me to at choose from as I know they wouldn’t use the low quality motherboards some of these others use. But, unfortunately, there is a cost.

    I understand the cell carriers have to make money, but the way they do their rates and constantly change their pricing seems like they have no clue what they are doing.

    I personally, don’t know why these carriers can’t price their rates based on the same service and if the product the person is buying is more, all they have to do it add the additional amount and amortize it over the life of the contract.

    Example. If the Apple phone list price is $600 and the Samsung is $$00 and they only charge an upfront of $200, then the balance should be amortized on the monthly bill where the customer is paying whatever the appropriate amortized price is and the monthly rate can go from $100 a month, where part of it pays for the balance of the phone, until the phone is paid off plus whatever the monthly rate of the service, where if you buy a more expensive phone, it costs more per month than a less expensive phone.

    personally, if someone were to really analyze these costs, it wouldn’t surprise me if the carriers are just trying to squeeze something out of Apple using the tactic of saying “they make less money”. It could be that their reps make a spiff on XYZ company rather than Apple. I don’t see them pushing HTC phones or some other brand over Apple.

    Maybe Apple Stores and places that want to PROPERLY represent the products should carry them and then have Apple figure out their own pricing model and contract the services out to various cell phone carriers in some sort of OEM deal where Apple can move them from one carrier to another. And the carrier stores only carry the products they want to PROPERLY represent. If I were HTC and these stores were pushing people over to Samsung, then HTC also has the same problem.

    Bottom line, if a customer asks about an Apple iPhone, then these reps should do the HONEST thing and PROPERLY represent the product instead of the full court press to say how great the Samsung is because Mr. Samsung puts an extra $25 in their back pocket. At least they should tell the consumer this upfront and let the consumer know WHY they are pushing Samsung.

  • brooklynkid

    I am a little confused. If the apple device is in fact inferior to the others, why would someone suggest the apple product just based on the name? They are not offering different products because of quota basis, The other phones are just superior at this time. I do not blame a sales rep to offer a different device based on the customers needs. I will put my bottom dollar on it they are trained to do that. Aside from at&t, all other iphones do not even run on a 4g network! I have no problem with apple products but the iphone is surely behind on technology. The name can only last but so long before customers start realizing that there are better products. Good for the reps to at least introduce those options to consumers. Marketing from apple makes the iphone a “household” name like coke ar pepsi. However thats not always what the consumer may want.

About the author

Alex HeathAlex Heath is a senior writer at Cult of Mac and co-host of the CultCast. He has been quoted by the likes of the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Twitter always works too.

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