AT&T and Apple Strategic Alliance: Evaluating Business Development

This case study examines the strategic alliance between AT&T and Apple, initiated in 2007 when AT&T became the exclusive carrier of the iPhone. The analysis focuses on determining which company benefited more from the deal, arguing that AT&T gained significantly through exclusivity, increased market share, and improved brand image, despite the eventual end of the alliance. The study highlights that AT&T's wireless segment operating margin improved, indicating a positive impact on its operations. The case study uses references to support its claims and provides insights into the strategic management and business policy aspects of the alliance. Desklib provides access to similar case studies and resources for students.

Running head: CASE STUDY
CASE STUDY
Name of the Student
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Author Note

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Answer to Question 1: Who got a better deal?
The deal between the Apple Inc. and the AT& T was a very useful one which was
beneficial to both the companies and assisted them in capturing a large share of the market along
with ensuring a considerable growth rate for all the companies as present in the organization.
Although AT& T was a popular company even before the particular alliance between the two
companies took place, the experts believed that no telecommunications company would be able
to benefit considerably perform well in the wireless domain (Andrew). However, in exchange of
the millions of dollars as invested in the firm by AT& T and the development of the technology
along with the authority being with Apple, AT & T enjoyed the exclusivity of being the only
network related to Apple.
There were approximately 53 million Iphone activations 2007 to 2011, a number which
was not possible to achieve if AT & T had not gone into the deal with the Apple. The wireless
phone subscribers of the telecommunications company also increased considerably which meant
that the firm was benefitting at large. Hence, as per the particular analysis, it can be stated that it
was AT & T who benefitted from the entire alliance because the phase of 2007-2011 was such
that it witnessed considerable growth in the use of the iPhones and with respect to this, AT & T
witnessed a similar growth irrespective of not being able to keep up with the pace of the growth
and not being able to provide with the adequate services which would have long term
implications on the overall firm at large and not led to a downfall of the particular alliance
(Jacci).
Answer to Question 2: Why was it a better deal?
The reason why AT & T benefitted more from the given deal is because:

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 Although they had to invest to invest millions of dollars into the development of the firm,
it got the exclusivity of being the sole network provider of Apple for a period of Five
years.
 It also got an access to around 10% of the iphone sales which was in large numbers at
that time.
 The company`s market share increased significantly from 28% in 2007, during the
beginning of the deal to 32% by the end of 2011.
 In addition to this, the alliance also assisted AT & T to uplift its image in the eyes of the
different consumers who had a poor image of the firm prior to its association with Apple.
 Additionally, although the deal did not work out to be very well for the long term of
AT&T, it possessed the ability to ensure that the firm paid positive dividends to the
different subscribers.
 The brand image of the firm was able to improve considerably and moreover, the firm
was successfully able to improvise on its operations and thereby improve the overall
status of the firm (Doz, p. 240).
 Lastly, even though, its alliance came to an end, AT &T witnessed that its wireless
segments operating margin improved 10 per cent.
Hence, it can be clearly understood that AT & T got a better deal out of the particular
alliance.

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References and Bibliography
Andrew Kupfer, “AT&T's $12 Billion Cellular Dream. . .,” CNN Money (December 12, 1994).
Available at http://money.cnn.com/magazines/fortune/fortune_archive/1994/12/12/80051/,
accessed December 24, 2013.
Doz, Yves L. "Strategic management in multinational companies." International Business.
Routledge, 2017. 229-248.
Hill, Charles WL, Gareth R. Jones, and Melissa A. Schilling. Strategic management: theory: an
integrated approach. Cengage Learning, 2014.
Jacci Howard Bear, “When Was Desktop Publishing Invented?” Available at
http://desktoppub.about.com/cs/beginners/f/when_dtp.htm, accessed December 24, 2013.
Robson, Wendy. Strategic management and information systems. Pearson Higher Ed, 2015.
Wheelen, Thomas L., et al. Strategic management and business policy. Pearson, 2017.