1.0 The Introduction Officially introduced to the public on January 9, 2007 1 , the Apple® Inc. iPhone™ is the definition of a convergence device. It has the ability to play back music and videos on its 3.5” display, a unique ability for video/image displays to automatically flip between landscape and portrait views when the device is rotated, special software that makes finger-based scrolling easier, a Safari™ Web browser that shows Web sites in their standard format, and more options for users to access and listen to voice mail. The iPhone is exclusive to AT&T customers (formerly Cingular Wireless), which may be a boon for the wireless carrier. The “must-have” nature of the phone will draw a certain group of customers to AT&T and away from other wireless carriers in the U.S. (assuming that they can extricate themselves from their current contracts). However, the million- dollar question is exactly how many wireless subscribers will switch carriers for the iPhone. Our consumer survey Mobile Entertainment Platforms & Services (Second Edition) shows the majority of consumers still consider network and voice quality as the most important factors for their choice of mobile carriers and only a small percentage consider handset design as important. Nonetheless, AT&T has extensive reach with its current customers – it now serves more than 62 million customers 2 , and its customer base has grown at least 40% since the end of 2004 (when Cingular Wireless operated the service). Given AT&T’s large customer base, an iPhone introduction could attract millions of users (Figure 1).