AT&T Playing Hardball With Apple?

Ponca City, We Love You writes "There's some interesting speculation from Cringley on why AT&T chief executive Randall Stephenson let drop that a new version of Apple's iPhone will be introduced in 2008. The announcement is sure to cut into Apple's Christmas sales and could also cost ATT a million new customers and at least $1 billion in market cap, says Cringley. 'It is no coincidence that Stephenson made his remarks in Silicon Valley, rather than in San Antonio or New York,' says Cringley. 'He came to the turf of his 'partner' and delivered a message that will hurt Apple as much as AT&T, a message that says AT&T doesn't really need Apple despite the iPhone's success.' What may be troubling the relationship between AT&T and Apple is the upcoming auction for 700-MHz wireless spectrum and AT&T's discovery that Apple may be joining Google in bidding."

Comments

Pscht!

[goldaryn]

a message that says AT&T doesn't really need Apple despite the iPhone's success

Pscht, yeah right... AT&T need Apple way more than Apple need AT&T. Apple's whole business model is built around early adopters, they have shedloads of goodwill from the whole iPhone rebates debacle, and this won't hurt their business one bit. AT&T are the ones who really stand to lose out.

Re:Pscht!

[signifying nothing]

Hahahahahahahahahahaha! Dude, do you realize how huge AT&T is relative to Apple, and most other companies? As this little incident shows, Apple is virtually nothing compared to the wider interests of AT&T.

Current market caps: AT&T - $232bn, Apple - $160bn.
Yes, AT&T is bigger, but only by about 40%.

Re:Pscht!

[dave562]

I can only speak as a consumer of both Verizon and AT&T in the Los Angeles area but in terms of call quality and signal strength, Verizon blows AT&T out of the water.

Re:Pscht!

[Shakrai]

Verizon doesn't even compare to AT&T. The biggest problem with AT&T's network is that they've got two incompatible 2.5G networks that they're trying to merge. Verizon still has nothing like what Cingular or AWS had before the merger. If they were leapfrogging, that might be an advantage, but they're not improving they're network, they're living off the fat of 75% the land lines they got for free.

I'm sorry, I hate Verizon (and especially Verizon Wireless) as much as anybody, but this is such a gross misstatement of the wireless industry that I'm going to piss away the 5 mod points I spent here to refute it.

Verizon is trying to "live off the fat" of their landlines while AT&T innovates? Give me a fucking break! Verizon has a nationwide 3G network. In virtually any part of the Verizon Wireless network you have full EV-DO broadband speeds. Can AT&T make the same claim? Most of their network, especially the suburban and rural parts of it, is still using EDGE (ISDN to slow DSL type speeds) or even GRPS (single channel ISDN speed).

Don't misinterpret my statement as a support for Verizon's business practices (which suck even more then AT&Ts) or as a preference for CDMA over GSM/UMTS. I'd much perfer to see a nationwide deployment of UMTS then CDMA. But the fact remains that Verizon and Sprint (CDMA carriers) both have a better data solution then AT&T right now. So how the hell can you say that AT&T is doing all the innovating while Verizon "lives off the fat of their landline business"? Hell, AT&T only became the largest carrier by assimilating the original AT&T Wireless into Cingular.

AT&T is trying to move into the modern world, and the only carrier that can compete (coincidentally using the same technology) is T-Mobile, but they're in no position to invest

T-Mobile is in no position to invest? What the fuck are you smoking and can I have some? T-Mobile just invested billions of dollars into the AWS auction and grabbed enough spectrum to roll out a nationwide UMTS network. T-Mobile USA's biggest problem isn't funding (Deutsche Telekom has a 96 billion dollar market cap), T-Mobile USA's biggest problem is a lack of available spectrum. As an example, they are running their GSM network in New York City off a whooping 10mhz of spectrum. AT&T has nearly ten times that amount.

The purchases of all the AWS licenses should theoretically solve this problem. Unfortunately in many areas, the Government has yet to vacate the AWS bands that were sold to the wireless carriers. Once the Government (and other users) vacate those bands, T-Mobile will (almost instantly) have a UMTS network available in the entirety of their existing footprint. They will also finally have the licenses to expand out of that footprint. In many areas (New York City) they even have the equipment already installed and the only thing preventing them from turning it up is that the AWS bands haven't been vacated yet.

Re:I doubt it will affect apple's sales.

[tgd]

On top of that, although I haven't used ATT's 3G network, I did use my iPhone and a Verizon Voyager (3G) side by side a week and a half ago... and while individual downloads were perhaps slightly faster on the Voyager (but really not noticably), both the ATT 2G and Verizon 3G suffered mostly from horrible latency where actually starting to download anything was concerned. Once something was transfering there was a difference, but for web surfing I'd argue 3G really isn't all that necessary for the iPhone (or Voyager, for that matter).

If you could tether them, or I suppose if I was prone to sitting and watching youtube all day long it might matter.

Now... an iPhone I could tether over 802.11 or bluetooth without using ssh with dynamic proxies and other hacks like that... THAT would be nice to have with 3G.

Ah Robert Cringley

[hansoloaf]

That should set off alarm bells in your head. A lot of his columns lately have been filled with nothing but pure speculation based on nothing but gut feeling or reading tea leaves.
I tend to ignore his columns when he goes off like that. If he talks about upcoming technology then I'll read it.

Cringely's like a home run hitter

[jht]

When he hits one, he really nails it, but when he misses it's by a lot. I posted some of this as a comment on his site, so I apologize for the duping, but:

Steve already stated that there would be a 3G iPhone, and he said to expect it late next year. Quoted at the London Apple Store opening back in September. That's not the only time Apple's discussed it.

EDGE is ubiquitous on the AT&T network. If you want data access, EDGE support is a no-brainer.

With the minor upgrades to EDGE that AT&T did over the spring and summer, the iPhone is improved, and so are the other EDGE devices (like the Treo 680, for instance) that they sell. It's a good investment by AT&T.

Right now, most of the 3G chipsets are still relatively bulky and draw fairly high-power - by 2008 that should change. But the current iPhone has really good battery life - adding 3G to that today would hurt. Apple's also stated this directly.

3G support isn't built out yet on much of the AT&T network. It's still only in the major metro areas. Kind of where EVDO was about 3 years ago. Not to mention that their 4G plans are in sync with Verizon's now.

Seriously, these aren't the toughest tea leaves to read. By the time AT&T builds out their network for 3G, Apple will be ready to use it. If Apple's contract gives them an opening to play in 700, they'll do that as well. But I count this as a Cringe miss - there's no conspiracy this time, just a lot of obvious and previously stated facts.