Do you think it was advisable for both AT&T and Apple to enter into the strategic alliance? Why or why not?
I think it was advisable; nowadays, it seems as if the world is moving more away from the small businesses and more towards the corporations and the large companies. Indeed, anti-trust laws seem to be in the rearview mirror (just look at Amazon and Google), and companies being large don’t really seem to have a negative effect on our economy. Still, this strategic alliance is very unique in that both of these companies are in businesses that are suitable for each other. Apple is the maker of several pieces of technology that are in high demand such as the iPhone and the tablet. AT&T is a telecommunications company that allows people to connect to various things such as the cloud and the internet. Apple can use AT&T to gain a huge advantage over other companies that are having a tough time trying to catch up or stay even with Apple. Apple already have a lot of tax advantages since they are situated in many countries that are pro-business. Therefore, this seems like a smart plan on both parts.
Which company do you think got the better deal in the alliance? Why?
I think that AT&T got the better deal just because AT&T is in a more vulnerable place than Apple. AT&T is competing with the likes of Samsung and Verizon, two companies that one can make valid arguments are in front of AT&T right now. Apple on the other hand is very unique; yes, they have competitors, but Apple is like the Starbucks of the technology world. Their product is so differentiated that many people see them as a luxury. This is why a company like Apple can get away with removing the audio jack in their phones. If any other company did this, you would see many people be turned off by this removal of the audio jack. AT&T will benefit more from this alliance because Apple is just in a much better spot without AT&T. While this alliance benefits both, AT&T will surely benefit because of Apple’s product differentiation from other companies. Apple has the branding and the resources to make its product(s) extremely unique while AT&T has been passed over for Verizon. AT&T doesn’t really have any chance of differentiating its product, as it is simply a test of quality between itself and its other competitors. Many people view Verizon as better quality than AT&T, so perhaps AT&T will be able to use Apple’s image and change people’s minds on their quality (even if it doesn’t change a bit).
If you were running AT&T at the time of the alliance, what would you have wanted to change about the alliance terms to make it work better for AT&T?
If I were running AT&T, I’d make it so that we’d get a better cut in the deal for sales of technology related to telecommunications. I think that would be the only way to really improve the deal. AT&T already got away with one of the best deals, and it is no surprise that it performed so much better than it previously had before it entered into a strategic alliance with Apple. If I were AT&T, I’d only be worried about whether or not Apple will want to stay in the alliance if it sees that we are getting more perks than itself.
If you were running Apple, what would you have wanted to change about the alliance terms to make it work better for Apple?
I’d definitely have made it so that we get a share of AT&T’s profits if they dramatically improved after they made an alliance with us. Branding and marketing is so important, and what Apple basically allowed AT&T to do was to use their image to bolster market share and sales. I’d make it so that AT&T would have to compensate us for using our image through deals and bonuses in the telecommunications space. I think that this would be fair, as AT&T is able to increase its profits off our image. Our image, as we’d see it, should be compensated if used to sell more products. As far as we’d be concerned, AT&T should reward us if they end up marketing themselves and tying their brand to our brand. Since people have a more positive image of their competitors, wouldn’t it technically hurt our image if AT&T closely tied themselves to us? I think that because of this fact, I’d request more deals with AT&T’s product department and use their products (telecommunications tech) in our factories and studios for a discount.
Can you think of any alliances that you think AT&T or Apple should consider today to help them achieve their strategic objectives?
Apple can definitely consider an alliance with Microsoft. Think about it, these are two of the largest computer producers in the world; If they were to use both of their strengths and advantages together, they’d be able to gain a huge advantage over the rest of the competition. If AT&T was looking for a company, I’d go with a company that is centered on new technology such as the cloud or a data processing system. It seems as if the future is in both of these technologies, and AT&T should try and safeguard themselves if they are to survive into the latter half of the 21st Century.