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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."
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.
basically, the fact that apple will unveil a 3g iphone is (and was) obvious - with or without that att dude blabbing about it.
the people who'd care about the existence of a higher network tech iphone have either bought an iphone already or they haven't and won't get a 2.5 iphone, anyway.
he also didn't say when next year. "next year" is a pretty long time frame.
"Good Morning, How may I assist you?"
"I hear this echo..."
"An echo? Do you mean on your AT&T phone?"
"No. It's your CEO. He is just repeating what Steve Jobs said a few months ago" "You can expect a 3G iPhone later next year... We are working on the next iPhone already, the one after that and the one after that." Regent Street Apple store in London, September, 2007
Cryonics - Keep cool and carry on.
It should not come as a surprise to anybody (except perhaps the logic-impaired Cringely) that perhaps Apple might feel the need to release a product update in a rapidly evolving market sometime before the sucker is completely obsolete. The fact that 3G capability is a glaring hole in the current model is not exactly front-page news. Also, "sometime next year" could mean a span as long as 17 months, an eternity in the cell phone market. I would expect that it will receive a flash capacity bump at the same time (at least a doubling).
Also, where does the $1 Billion number come from? The same dark, damp, place that produced the "fact" that IBM was going to lay off half of its worldwide workforce?
Cringely: Wild Speculation for folks too dumb for Dvorak.
SirWired
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.
Speculation is one way to put it, crazy conspiracy theory is another.
So AT&T CEO decides to drop 1 million customers and 1 billion in market cap (!?) in order to send a message to Apple not to bid on the wireless spectrum auction, that's his theory? If I was an AT&T shareholder I'd be wondering why not just phone them instead...
Is this the same guy who predicted Apple and Intel merging
Negative moral value of force outweighs the positive value of good intentions.
I know AT&T is a much larger, more powerful company than Apple, but exactly how can they play hardball with Apple on this issue? If Apple drops them, signs with another carrier -- or even none -- for their next iPhone, it would be AT&T that loses money, not Apple. Apple has already made a nice bundle with the iPhone, so they probably don't really need AT&T anymore and as popular as the iPhone is, AT&T can be replaced. Does AT&T think that the primary reason people want the iPhone is because of AT&T? Obviously that is not the case, since so many people are unlocking them as soon as they get them. Seems like it would be the other way around, with Apple in a good position to play hardball with AT&T. Maybe I need more coffee, because I just don't see it.
I dream of a better world... one in which chickens can cross roads without their motives being questioned.
The industry is going to go through some wrenching changes because new players are going to be more willing to open their networks (for real, not pretending to like Verizon). What new players? Clearwire and Google, or a combination thereof.
This will make it easier for phone/device manufacturers to provide genuinely innovative products. If AT&T wants to stick it to Apple, they're going to find their bargaining position weakening. Quickly, I hope.
TWW
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I think some industry types are overestimating just how much the public follows the off-hand comments of a CEO at a luncheon.
Besides, the fact that a 3G phone is coming isn't even a secret. If you wanted an iPhone for Christmas, you wanted one, and despite knowing full well that another one was coming next year. Heck, I bought one in June, knowing full well that Apple could easily introduce a newer version in November. I'd even figured out who'd get the old one if it happened.
Net effect on Apple? Zip.
And Cringely was right about one thing. Google announced that they were bidding today. But the press release also made another thing quite clear: their application does not include any partners.
So. No partners means no Apple partnership, which means that there was nothing for AT&T's CEO to find out. Which in turn means that his comments were relatively innocent, and not "a $1 billion message to Apple CEO Steve Jobs." By my watch, it took less than ten hours for Cringely's consipracy theory to be shot down. Could be a new record.
Of course, you could spin it that Jobs, quaking in his boots at all of the iPhone sales he's already lost, called up Schmidt, pulled out of a planned multi-billion dollar deal, and Google obligingly issued the press release to cover his tracks. Yeah, right.
That's exactly how SJ would handle it.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
This is all about telecoms versus mobile phone manufacturers, also known as business as usual. If a telecom thinks that is business is more than just offering connection, as in being a carrier, and as more being an service provider or an experience, then the number one competitors are the handsets manufacturers as they are the ones beside operator to influence and have place in customers hand.
Just to give some examples... Nokia has worldwide market share of approximately 40%, but in US its market share is only 5%. Why is it? Well it could be because they don't manufacture CDMA based handsets anymore (direct attack against Qualcomm), but mainly because in US handset business in operator business where operators offer to consumers what they think suites best for operators not for the consumers. To operators it suites that handsets are limited or walled, and to operators it suites better that the brand power of an handset is less than the branding power of operator. This has meant that operators don't want to offer Nokias handsets as to them Nokia is too powerful player in branding and service base, and so offering Nokias handsets more would hurt their position in longer time-frame.
What basically AT&T is doing to Apple is just business as usual. Kick them where it hurts. Weaken their position and try to make a better deal with them. Also it should be noted that market situation has changed as major handset manufacturers and also lesser known Asian manufacturers are all offering and bringing iPhone clones to markets. For AT&T it could be lucrative to just get some iPhone clones from far east with bargain price and brand them by themselves.
Of course there is remote possibility that mobile operators in US are colluding against Apple. There are only few GSM based operators in US, and I could easily imagine them speaking with each other to maintain status-quo in the market. So in example AT&T kicks Apple first, then as Apple talks to T-Mobile or other player, they just throw their hands up and say "oh, but we are not interested at that price", and voila telecoms win.
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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.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
While not a perfect measure of a company, currently Apples market cap (159.5 Billion) is greater than IBM's (144.9 Billion). AT&T is currently at 231.7 Billion market, cap, so by that commonuly used measure, AT&T is still bigger.
I would wager that IBM didn't blow off Apple, but that IBM really couldn't deliver a performance competitive in a form with a TDP appropriate for laptops, with the final straw being Intel releasing Core2, for all intents and purposes erasing the instructions per clock advantage the PPC architecture had. (I know Apple made the jump before that, but I guarantee you that Intel shared the Core2 info with Apple).
Apple smartened up and realized that even when IBM made up for it, the simple fact was that Apple wasn't able to consistently differentiate themselves on hardware performance (and it really wasn't one of their goals now anyway), so they decided to play in the same market as their competitors, ensuring that they wouldn't appear to be left behind at any point in time. Extra bonus of Windows compatibility in the face of the market reality of desktop software. They chose to differentiate on brand, styling, and software (to an extent).
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This one quote makes the entire thing a non-story, and it's obvious that many of the commenters below haven't read it. And yes, it's a real quote - google any section of it and you'll pull up a dozen stories on it from mid-September. The AT&T CEO can't leak something that Jobs already said in public, which means we can stop theorizing about the motivations behind or repercussions of such a leak.
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... leads to Apple & Google creating a quality & service oriented network ...
"join in bidding" means they will be bidding against each other, competing.
And Jobs says, "Okay, FUCK AT&T. Pull their contract on grounds of assassination of our business model; sue them for our projected lost business; and start shipping iPhones for Verizon only. Let's see how they like their new potential customers flocking straight to the competition." Then AT&T's stock price drops.
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they're now called at&t, not singular
29 mpg. YMMV.
Right now, most of the 3G chipsets are still relatively bulky and draw fairly high-power
Sorry, but that's uninformed drivel.
3G and 3.5G handsets come in slivers that are a few millimeters thick and have excellent battery life:
http://www.mobilegazette.com/nokia-6500-classic-07x05x31.htm
http://ezinearticles.com/?Sony-Ericsson-W-880i-Black---Experience-the-Walkman-Phone&id=534534
Some of them even throw in WiFi. Those phones aren't even particularly expensive (about $15 for the Nokia with activation).
The US phone market is several years behind Europe technologically. In part, that's because it's so fragmented and because the US chose frequencies different from the standard ones used mostly everywhere else.
Oh, and you can get a 3.5G iPhone-like phone: the Samsung F700; it looks superb, and squeezes a full keyboard into something with roughly the same form factor and look as the iPhone:
http://gizmodo.com/gadgets/cellphones/apple-iphone-vs-samsung-f700-which-is-touchscreenier-235112.php
In this context of AT&T, it might be better to refer to them as "Cingular".
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People keep quoting the 1-2 million handsets sold by Apple as being a large number. I hate to bring reality into this argument but the growth in mobile handset sales this year in China alone is over 10 million units. There are startup mobile handset makers in China who within 18 months of their creation have sold over 7 million handsets so Apples numbers look rather poor too me. AT&T have realised what many within the industry have, Apples sales although generating allot of publicity are small fish in the scheme of things.