Cult of Mac: a blog about the Mac, the iPod, the iPhone - and the people who love them

38 comments

Anyone remember that report that came out estimating how many of the 1st gen iPhones Apple had sold which weren’t being used on ATT?

Locking to a single carrier is limiting sales. Not a good thing in this economy.

MacRat, on April 15th, 2009 at 1:41 am

nice blog

sham, on April 15th, 2009 at 2:57 am

I know of several people who do not have iPhones for the SOLE reason that you have to have AT&T. Personally I work for an cell phone company (NOT AT&T) and therefore I don’t have an iPhone – though I would LOVE to have one. But for others I know it is simply a case of poor reception or poor customer service that has driven them from AT&T. One even has sold his iPhone and went back to his pervious carrier due to the poor reception and performance.

It is in EVERYONE’s best interest (except AT&T) to have the iPhone exclusive rights of AT&T end!

Phatslacker, on April 15th, 2009 at 4:46 am

Good article. This is also better for the each party. We know naturally why this is true for the other prospective parties and customers, but should I explain for the said company as an instance, sharing the market can be more advantageous for the long term which requires keeping your operations, your innovations easy, smooth and cool i/o dominate it today while all the eyes on you and only. As you have hint at, mission accomplished. They should ask for it before waiting for such a proposition.

When you’re alone in the market, any improvement you have put forward would become ordinary. You do because you have to do. But if you are breathing the same air with a competitor instead, even a baby step can be seen as if you rule the world. This is all about to be cool, this is all about to be self-confident or not, and if you are, you have been already dominated over anything.

Ali Riza Esin, on April 15th, 2009 at 5:05 am

The question is whether or not Apple is already planning on making different phones (CDMA-based) for other countries anyways, as has been rumored. If they are, I’ll bet they’ll nix the AT&T exclusivity.

If Apple isn’t planning on CDMA-based iPhones elsewhere, I doubt they’ll start manufacturing one just for Verizon’s sake. Unless Verizon is finally willing to offer some pretty substantial incentives.

If Verizon isn’t begging Apple for the iPhone, I doubt anything will change.

Synthmeister, on April 15th, 2009 at 7:32 am

T-Mobile maybe, but putting CDMA over GSM into the iPhone would be a serious mistake.

If it weren’t for the duplicate infrastructure required to support two incompatible technologies – GSM and CDMA – phone features and capabilities in the US might be on a par with other regions that are single technology based. Having these 2 incompatible networks out there makes for billions in redundant costs in the infrastructure, and is analogous to having regular and narrow gauge railroads spread across the US. Narrow gauge went away, as it was ludicrous to maintain 2 incompatible rail networks.

If the US was GSM – the global standard – then coverage would be twice as good, and all the places with 2 cell towers next to one another to support the 2 standards, could be placed in other areas, and the billions saved could be spent in bandwidth and network capabilities.

If Apple’s groundbreaking phone can do something to break this absurdity, then it will be well worth it.

kirkrr, on April 15th, 2009 at 7:34 am

Make 2 separate and incompatible phones in order to deal with the demands of *multiple* self-aggrandizing “partners”? Stupid idea, I think – and violates AAPL’s very successful KISS approach.

While Sprint and Verizon may (or may not) appeal to phone makers, Apple makes computers. Even their phones are computers. I don’t se a computer company (not already harnessed to “phones” as the one horse they rode in on) undertaking a NEW effort at backward compatibility with a passing technology – for no better reason than to multiply their target entities needlessly.

All the mobile providers have serious problems from a consumer viewpoint: for every significant complaint about ATT, there’s a matching one for Verizon. The one thing that makes ATT ‘different’ is that they gave the Bush 43 administration their own captive internet to search and break as they chose: they still have to answer for that.

chmood, on April 15th, 2009 at 7:46 am

Look

All carriers suck!

I had Sprint, then T-Mobile, and now ATT for the iPhone. NONE have been spectacular in either their level of access or their customer service, and I have no reason to believe that Verizon would be any different.

I’m not a big ATT fan, but I’m not a big fan of the other choices either, because, as I’ve said a million times… they all suck.

jltnol, on April 15th, 2009 at 7:51 am

I honestly don’t see what the big deal is. There are plenty of phones that are only available on ATT or Verizon, or T-Mobile or Sprint/Nextel that aren’t available on their competitor’s networks.

The only reason this is even an issue is because of the iPhone’s popularity. If the fabled Nokia N-gage or any of the numerous gimmicky T-Mobile phones had become this popular, there would be a similar uprising for their products.

I’ve had contracts with Verizon, Nextel, and ATT, and by far I’ve had the best experience with ATT. I don’t see what all the fuse is about. Its not like ATT is charging obscene prices, or has horrible coverage.

Chris, on April 15th, 2009 at 9:43 am

Because of the tech/network involved, it seems that the jailbroken iPhones are being used on T-mobile already.

But people are also using jailbroken iPhones on AT&T to retain their old voice plans.

People complain about the expense of AT&T plans for the iPhone & I’m sure opening up the iPhone to other carriers would make things more competitive, but also uglier — we’ve seen how the BlackBerry has different features on AT&T , Tmo & Verizon with each model’s launch. Could get even uglier with iPhones.

Gib, on April 15th, 2009 at 10:00 am

I agree. If you look at Blackberry Curve, or Moto Razor. Those phones did exceptionally well by going to all companies rather than just sticking to one company. If they created the CDMA iphone it will open doors for 4G LTE with Verizon. The 1st generation iphone did pretty well too because it ran on Edge. They are still a hot commodity on ebay. I know few of my friends have it unlocked jailbroken 1st gen iphone running on Tmobile for fraction of the cost each month. People will find a way around.

rs, on April 15th, 2009 at 10:06 am

It is a fact that today Apple has millions of Iphone users; so good decision in the case of AT&T.

Suresh, on April 15th, 2009 at 10:08 am

Remember that’s it the exclusivity that makes it so valuable to at&t and thus willing for them to pay apple over $600 a phone. If all the carriers had it, none of them would be willing to subsidize it very much and apple would earn much less per phone.

Johnny walker, on April 15th, 2009 at 10:42 am

The iPhone has outgrown AT&T. It’s time for it to be set free.

David, on April 15th, 2009 at 10:43 am

Probably going to JB my 1G iPhone soon and go with Verizon. ATT coverage sucks at my house. As long as I have WiFi, I should be ok with all my apps, right?

Peter, on April 15th, 2009 at 10:45 am

Peter –

Sign up for skype and use the iPhone skype app at your house over wireless (if you have it). It solves the problem, and you get to keep your iPhone.

The Idiot, on April 15th, 2009 at 12:26 pm

@”Johnny walker”

Subsidies (or lack thereof) have no effect on Apple’s ‘earnings per phone’, it only affects what the consumer pays.

I believe that if the iPhone were on multiple carriers, each would try to subsidize it MORE, to make their offering more attractive and get more subscribers. Apple would continue to set their price for the hardware.

Similar unsubsidized Nokias are in the same range (US$600-800), as are the BB Bold and and Storm, from a cursory search of the web.

Vaughn

VaughnSC, on April 15th, 2009 at 12:27 pm

Unlock the iPhone! That’s it. Let the GSM carriers offer their own tailored service plans.

Locked phones are supposed to be the free ones. The iPhone ain’t free…not by a long shot!

makanramen, on April 15th, 2009 at 1:08 pm

great article, a lot of info, keep going!

FoxwoodCasinoResort, on April 15th, 2009 at 2:19 pm

Let the consumer choose. I much prefer Verizon coverage for my area, never *ever* a dropped call. Now with AT&T, my iphone drops calls all the time. Haven’t we learned enough recently about monopoly and “too big to fail” companies?

duh, on April 15th, 2009 at 2:51 pm

Doing another exclusivity deal with ATT would be a strategic blunder almost in the league with the invasion of Iraq.

Now that the iPhone is an established product, and arguably the best of breed in the world, it is now time for a market penetration strategy. That will happen by opening the iPhone to other carriers.

ATT was good for launching the iPhone, but that time is past.

Mariner, on April 15th, 2009 at 3:42 pm

If Apple were to open up the iPhone to other networks in the U.S., then each network would probably want a “differentiating factor” for their version of the phone.

That might seem good for the consumer, but could actually cause more complexity for Apple.

There are some people who will not switch networks for an iPhone, but I am not sure if there are enough of that type of consumer to make it “worth it” for Apple. It probably just depends on what AT&T is willing to pay for the exclusivity. Whatever makes the most money for Apple will probably determine what they decide.

Brian, on April 15th, 2009 at 4:59 pm

As far as I’m concerned AT&T is the #1 offender in illegal spying. As soon as I get an option to dump them, I promise I will.

Snerdly, on April 15th, 2009 at 5:11 pm

In my experience and it is my opinion that AT&T is a corporate snake in the grass. If as the article indicates, they seek to extend their exclusivity rights, I for one hope that Apple complies and makes them pay dearly – 40% above Apple’s present take or Apple walks and AT&T must compete on an even playing field. Ahhr….Walk the plank my hardies!!!!

William Loper, on April 15th, 2009 at 5:57 pm

How sweet can ATT make that pot?

Partners in Grime, on April 15th, 2009 at 9:25 pm

I agree, this also will make the price going down

FourQueensHotel&Casino, on April 15th, 2009 at 11:42 pm

Some of you guys on here need to think through your posts before hitting the send button..

“Doing another exclusivity deal with ATT would be a strategic blunder almost in the league with the invasion of Iraq.”

- Are you kidding me? That doesn’t even make sense. The Irag invasions has ended thousands of lives, put an entire region of the world into disarray, and tarnished our “good” image. Apple resigning an exclusivity deal, on the other hand, means a competitive edge for ATT, tighter control for Apple (which they love and which makes their product superior). Yes, absolutely right up there under Iraq…boo hoo.

“Haven’t we learned enough recently about monopoly and “too big to fail” companies?”

- Again, are you serious? Yes, such a monopoly, you know, since NO other phone company offers national coverage, cell phones, etc. EVERY cell phone company has exclusive cell phones they offer. Deal with it. If you can buy an unlocked GSM phone and convert it to crappy old school CDMA then go for it. “Too big to fail?” Yes, comparing ATT to companies like Citigroup and AIG, two companies that through the worlds economy into chaos, really drives home your point. Except for the fact that they have nothing in common except they are big companies.

Seriously, its great that some of you don’t want to switch, or are unhappy with your coverage. Thats true with everyone. Verizon used to drop my calls all the time, and thats why I switched to ATT, which hasn’t dropped one yet. Apple has a great thing going for it, and I’m sure they would expand their base by opening up to other providers. Eventually that will happen, which is why apple only signed a 2 year deal with ATT. Adding on more year here and there isn’t the end. I doubt Apple will extend past 2011. ATT probably wants to run it till 2011 so they can roll out their 4G network before the iPhone is opened to all. Plus I’d hate to see the iPhone turn into another razor. What was the last deal for a razor? buy one get how many free? Apple wants to keep their products classy and top end in the market. Opening up the flood gates may water down the prestige. Plus, the netbook that is supposedly coming to ATT this year from Apple. Apple isn’t done with ATT yet.

Chris, on April 16th, 2009 at 3:43 am

my feeling is this.

I think that Apple should have a cut off such that all contracts started up to X date, Say December 31, 2009, would be exclusive to ATT until the said date or the end of the contract which ever comes last. after that point, anyone who finishes their contract (or had previously gone past the end of 2 years without upgrading again) could have it legally unlocked by Apple. and all phones sold after that date would be sold unlocked.

this of course might raise the price of the phone if bought at an apple store since there would be no company to offer a subsidy for signing a contract, but then again, if you bought the phone outright you could probably argue and win that X company can’t force you into a set period since they aren’t spending any money on your device. so take that as you will

HOWEVER, all this being said. I don’t think that Apple should be forced to make phones that cover every possible tech out there. they should be allowed to stay with GSM and not have a CDMA phone if that is what they wish. let the carriers be the ones responsible for the service technology. if they want to service the iphone they have to make the adjustments. not expect Apple to make them a phone.

Scott, on April 16th, 2009 at 9:43 am

I guess my wait for an iPhone will have to continue. I have Verizon, am very happy with it, and I’m not willing to leave it just for a phone. I agree that we should have one standard network in this country, but, until Verizon decides to join the rest of the gang, this will not happen. I get exceptional service from Verizon. Service available almost anywhere. Just recently, some friends and I went on a trip along the coast, north of San Francisco, in a remote part of Northern California, all of us probably represented every service available here in the U.S. and I was the ONLY ONE who got a signal up there. Also, I am not a heavy phone user, and I find AT&T’s prices excessively high. Maybe this won’t change even if the iPhone is opened up to all the services, but that’s another deterrent for me. I guess I’ll just get an iPod Touch and fantasize about having an iPhone.

macandal, on April 16th, 2009 at 9:49 am

Verizon is switching to GSM when they roll out their 4G network next year. So if ATT doesn’t get an extension, all your Verizon guys will have something to look forward too soon.

Chris, on April 16th, 2009 at 6:29 pm

I think the fact that Verizon will plaster its horrendous red check mark logo on the back of this beautiful device is reason enough to keep it out of competitor’s hands. Argh, the horror!!!!

Rishi, on April 19th, 2009 at 12:37 pm

AT&T got the deal, in part, because they agreed to work with apple to develop visual voicemail – a long overdue cell phone feature and on that I believe is still exclusive to the iPhone. Verizon does not support this feature and it would be a marketing and technical support nightmare for Apple.

Ninety percent of cell phone towers are co-located. That means their cell sites are all in the SAME general location because there just aren’t that many places to hang your cell tower. If there’s one tall building, everyone is on it. If there’s a tower that gets through the local planning commissions, it makes sense to cooperate with competitors and build your tower on the same “farm” to mitigate the lengthy and crushingly expensive permit process. So, Verizon & AT&T mostly have the same coverage and use exactly the same radio hardware. Any difference in reception is almost entirely due to the quality of individual phones, NOT the service provider.

The only differences between Verizon and AT&T are mostly in people’s minds. Both firms came from monopoly backgrounds (Verizon was GTE aka General Telephone) and, in the past, were poster children for the worst in customer service. Both have cleaned up their act.

They have the SAME pricing plans! So, don’t expect “competitive pricing” on the iPhone if Verizon could offer it as well. As popular as it is, the iPhone and other smart phones are not the bulk of either carrier’s sales, so they’re not going to make a special rate card just for it. In fact, it’s more likely prices would go UP because of the substantial added infrastructure cost Apple would incur to provide sales and technical support to another carrier’s customers. (This is a major reason Macs work so much better than PCs, because Apple keeps the number of hardware variations to a manageable number — one they can test in the lab — to minimize the technical problems. The same is true for the iPhone.)

So if both carriers are the same, why do people grumble? It has to be that people like the illusion of choice. (However, a choice between 2 carriers is not much of a choice.) There’s no significant difference in price, technology, coverage or the quality of customer service. There are 2-year contracts that lock you in, but the buy-outs for these must now be pro-rated and your buy out pays for that “free” or subsidized phone you bought. If you’d paid full retail price for the phone in the first place (as is usually an option) you would have been on a month-to-month contract the first month.

Paul Boswell, on April 27th, 2009 at 9:06 am

AT&T and Apple have had outstanding and unrelenting success together. Verizon’s initial decline of carrying the Original IPhone has been a blessing in disguise for Apple. AT&T is Fortune Magazine’s “Most Admired Telecommunication Company in the World for 2009″. It also has the fastest 3G network in the business at 3.6 mbps and soon to be 7.2 mpbs after its completed run in two test markets. There are also various software upgrades in the very near future to boost it up to 20 mbps. AT&T is investing billions in innovation and this alone is enough to sustain their profitable and exclusive relationship. Going to a second rate carrier like T-Mobile or Sprint wouldn’t lead Apple to a secure or profitable future.

Ernie, on May 4th, 2009 at 1:55 pm

Those without a choice of carriers (and can’t get an ATT signal at home) might be the most interested.
Then again, Apple should focus on computers as my powerbook was a big lemon with 3 recalled parts (they failed to tell me about) that I could not get resolved, as apple reps were too busy selling phones.

bowdenski, on May 10th, 2009 at 1:24 pm

AT&T said Friday (5/8/09) it will buy the assets of Verizon Wireless in 79 mainly rural areas for $2.35 billion, a deal that will affect more than 1 million subscribers. AT&T is getting spectrum licenses, cell towers and 1.5 million subscribers in the deal. Again AT&T is spending more than any other carrier in innovation and expanding it’s coverage. Therefore, making its 3g coverage available to more markets allows consumers like Bowdenski to utilize an IPhone where previously there was no coverage.This move is lucrative to consumers and Apple alike. You can’t please everyone, but AT&T is definitely making the best effort to do so.

Ernie, on May 11th, 2009 at 9:42 am

The one thing that’s kept me from buying an iPhone is the fact that it’s on AT&T. Too many nightmarish experiences with their phone/Internet services has had me swear off their company for the foreseeable future, so for me, that means a new G1 rather than an iPhone.

True, iPhones can be unlocked to work with T-Mobile, but that voids the warranty, and frankly, I’d rather not. On top of that, I’ve been with T-Mobile long enough to get an upgrade: if the iPhone were to be offered with T-Mobile, I might be able to get the iPhone for a cheaper rate, or get a better data plan than what AT&T offers, or what a new T-Mobile customer wanting an iPhone would be charged.

However, I don’t just think it should be open to T-Mobile; I think the more competitors, the better! The only thing I care about is the cost of the data plan being driven down (or split up somehow, so that we get charged for what we actually USE); Apple can keep on making its great products and I’ll support them…IF I can use them.

Azurite, on May 14th, 2009 at 4:51 pm

The only thing missing from the G1 is the 35,000 apps. Plus the fact that it looks like a garage door opener makes it very unappealing. With next-generation iPhone hardware and software around the corner, a new report is adding to claims that AT&T is mulling changes to its iPhone monthly service and data plans that could reduce the cost of owning an iPhone and help Apple grow its share of the smartphone market. As far as Azurite’s comment about being charged for what you really use, thats plain ridiculous! Your average IPhone user consumes 4 times as much data as your average smart phone user. Do you really want to sit and figure out how much data your utilizing monthly and limit yourself to the number of apps you can download and emails you can send and receive??? Not me!

Ernie, on May 19th, 2009 at 10:41 am

I am a Mac lover, but my devotion has been tested mightily by my iPhone experience — or, more accurately, my AT&T experience.

As this blog entry notes, Apple now knows how its product performs in the field. Surely it also has a much better understanding of the AT&T network’s strengths and weaknesses. My recommendation to Apple: drop the exclusivity, and allow consumers to choose the carriers that work best for them.

While I would like to believe the upcoming network improvements AT&T touts will address millions of consumers’ complaints (including mine), I’m no fool. The company can’t even adequately address connectivity problems in neighborhoods immediately surrounding its stores (including mine).

I live in Denver’s Stapleton neighborhood, which is among the largest urban infill developments in the United States. There’s an AT&T store just a few blocks from my home. I have visited three times in the last three months to explain in person the problems I’m experiencing with the network. All three times, sales reps have explained that yes, they KNOW reception throughout my neighborhood is spotty to nonexistent. And yes, they’ve received dozens of complaints and have logged dozens of coordinates to guide AT&T’s future efforts to make improvements.

Those same sales reps also have told me consistently that they have no idea when, or even if, AT&T is going to strengthen its network in my not-at-all-remote neck of the woods.

So, that’s right. AT&T has set up shop in a neighborhood where several of its local employees acknowledge there are significant network-connectivity issues for iPhones. And yes, AT&T continues to sell iPhones as fast as it can to people living in that neighborhood …

Especially galling was the store manager who, a couple of days ago, told me repeatedly, “But we don’t GUARANTEE access and service.”

Too bad I have to guarantee my monthly payments to AT&T. The moment Apple allows another carrier into the iPhone game, I’ll be dropping my AT&T service – if I don’t drop the iPhone out of frustration first.

Christine Tatum, on June 1st, 2009 at 8:17 am