Starbucks Picks AT&T for Wi-Fi

Monday, February 11th, 2008 @ 7:54 am | Business, Technology

Glenn Fleishman

Starbucks is shredding its deal in place since 2001, originally with MobileStar then T-Mobile, to switch to AT&T as their Wi-Fi provider. That moves 7,000 locations from T-Mobile’s ledgers of nearly 9,000 to AT&T’s.

…and because it’s a write-up by Glenn Fleishman, he touches on the potential implications for Apple, given that the hardware maker (iPhone), retail location (Starbucks), and service provider (AT&T) now all have active business relationships.

I was just in a relatively deserted Starbucks (gotta love the side street shop as compared to the busy intersection shop) a little over an hour ago and I was thinking that it wouldn’t have a bad bad place to setup my laptop and do some work, provided I was able to get online without paying $10/day. Given this turn of events, I wouldn’t be surprised to an AT&T Wi-Fi account option added to the iPhone voice and data plans in the near future — if people are going to use their iPhones over Wi-Fi connections, AT&T may as well try to profit off the practice. This also opens the door for AT&T to market towards iPod Touch users, as well.

Update: Somehow, I missed the following in Glenn’s article:

AT&T says in their press release that all Starbucks Card holders, which is simply their value-storing swipe card system, will get two hours of free Wi-Fi a day.

Very cool. And I’m not just saying that because I won a Starbucks Card in building’s holiday raffle last December. During my MBA program, we examined Starbucks for several different classes. During the last, Strategic Brand Management, some of us had a chance to meet Gerardo Lopez, a Senior Vice President at Starbucks and a GW alum. One of the issues that came up was how do you make the Starbucks Card more attractive; why should people give Starbucks their money up front instead of charging purchases to a credit card and leaving their money in the bank for an extra few weeks. To us, the obvious recommendation was to offer free coffee credits for putting money on the card, say like $1 credit for every $10 of credit purchased. We were told this suggestion was a non-starter because Howard Schultz (and, thus, Starbucks) has a no-discount policy.

Thus chastened, we tossed around a few other ideas, but most seemed like they might be too disruptive to store operations, particularly in larger stores.1 As far as I remember, none of us mentioned a Wi-Fi promo, but it’s really cool to something evolve in area my classmates and I identified as an issue.

  1. Though one of the ideas was to store a preferred drink on your card and simply scan the card into a portable card reader like the credit card readers used in Apple Stores. We thought that might be a bit ambitious, but it could end up looking rather short-sighted if anything ever comes of Apple’s wireless ordering system. []

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