Monday, June 15, 2009

AT&T's Many Missed iPhone Opportunities - Or Not

I just don't understand rants like Jason Snell's AT&T's many missed iPhone opportunities in Macworld. The current complaints are that with the new iPhone 3.0, there's finally support for MMS (that is sending pictures as text messages) and tethering support (using the iPhone's cellular connection to connect a computer to the Internet). These are new features finally available in the iPhone but while cellular providers in some other countries are offering support for these this week, AT&T is not.

Apple called them out on this at the WWDC last week. Now Snell adds his complaints:

"And so I have to ask, what the heck is AT&T thinking?"

"It just doesn’t make sense, and not just from the perspective of rabid iPhone fans who will download the 3.0 software update as soon as it’s available Wednesday. It doesn’t make business sense to me, either"

"MMS messages, if embraced by the iPhone-using community, are an opportunity for AT&T to make money, and last time I checked, AT&T was a profit-making concern, not a bunch of hippies living in a yurt."

I'm no fan of AT&T and I have no knowledge of the issues that AT&T and Apple must be negotiating, but neither does Snell. I can easily believe that millions of iPhones densely packed in urban areas could overwhelm the network and I can accept that AT&T needs some more time to get things working. A few times Snell says something similar but then dismisses it. "Perhaps this stalling tactic is simply to build up AT&T’s network so that those features work well. But if that’s the case, then the issue remains: if AT&T’s network can’t truly withstand the iPhone, perhaps it’s not the best partner for Apple to have."

Snell seems to have completely forgotten that AT&T offers for the iPhone a very cheap unlimited cellular data access plan. By all accounts it was at the bequest of Apple and it was probably one of the things that put Verizon off from wanting the iPhone. So now AT&T is putting off MMS messages until later this summer! Oh the horrors of having to wait a few weeks to send a picture as a text message instead of an email! Just what could AT&T possibly be thinking?!? And I thought I saw something suggesting that tethering would be available by the end of the year. Perhaps that's not ideal, but I suspect AT&T probably has its reasons for the delay because they want the profits.

Snell also says "Floating in the background here is, of course, the anger many users are feeling about not qualifying for the lowest prices on the new iPhone 3G S". Seriously? I have an iPhone 3G and will get an iPhone OS 3.0 upgrade for free. The new features in the new phone aren't that huge, a better camera, a compass, a faster processor and voice control. Oh the horrors of having to wait another year before you can get these new features at a steeply discounted price because you signed an industry standard 2 year contract (though that is annoying).

There will probably be a new iPhone out by then with more new features. You might just have to skip a generation of hardware. Or you could buy it for full price. Last I checked AT&T actually pays Apple for the hardware discount and as Snell points out they are "a profit-making concern", maybe they want to not lose $400 per iPhone every year.


Jason Snell said...

I think you missed the point of my piece and vastly overstate my degree of upset with AT&T, but reasonable people can disagree.

However, your quote choice in regards to subsidized iPhones is completely unfair. At no point in my piece do I defend the people complaining about the subsidy, though I do suggest that perhaps AT&T could have done a better job of turning it into a non-issue through better communication and some mildly creative marketing.

Howard said...

Wow, thanks for reading. What point of your piece did I miss? You think AT&T is delaying services for some mysterious reason and might not be supporting Apple as well you think they should (or as well as some other nations phone companies are). That Cingular took more risks and Verizon might ultimately steal their customers when the contract is up. Your evidence is a 2 month delay in MMS service and a several month delay in tethering service.

My point about the subsidized iPhones I think is fair. I think the number of "Apple fans who may be used to purchasing the Next Big Thing as soon as it arrives on the scene" is quite small compared to the number of iPhones and I think needing to upgrade to the newest iPhone every year is unnecessary, particularly because we get significant OS updates that happened on no phones before the iPhone came along.

I didn't mention your early adopter pricing idea, but if I had, I would have said I know of few others who offer such things (TiVo comes to mind for transferring lifetime service contracts to Series 3 TiVos), certainly Apple doesn't, so these Apple fan aren't used to such a thing anyway.

Howard said...

Huh, looks like AT&T is being nice to 3G customers:

"AT&T is being about as generous as they can be by offering 3G owners half of the subsidy after completing half of their contract. Once 3G owners have fulfilled a year of their contract, they can get the 3G S for the base price ($199) plus half the subsidy ($200) for a grand total of $399. "

Richard said...

Perhaps having the iPhone on another network would be more workable, like Verizon. Some of us wait in vain for the iPhone to not be exclusive to AT&T. Switching to Verizon would not be any guarantee that the iPphone functionality would not be hindered there. I could see Verizon wanting to disable the Wi-Fi in favor of their 3G network instead.

At&T delaying services because their network moght not be able to handle it makes them sound very bush league.

Howard said...

If the iPhone had been on Verizon I would have gotten one sooner. AT&T's Edge coverage around me was bad but their 3G coverage was supposed to be good, but the iPhone 3G didn't work here either when it came out. I had called them and they were informative. There were 6 towers within 1.5 miles of me all with working 3G, it should have been working. The 2.1 OS upgrade meant an iPhone could get signal in my house, I now blame Apple for the problems not AT&T. Other than that, my phone coverage has been fine around Boston and in my limited Northeast travels.

I believe they've spent a lot in upgrading their network and the popular unlimited data plan of the iPhone has put a strain on their network and would have on any network (though of course we'll never know).

They could be bush league or it could be difficult to make sure such things work over a huge country. They did just buy Cingular 2 years ago and have bought a few other smaller providers in the interim. I can imagine there are lots of issues with merging the networks that they'e working through that makes things difficult.