With AT&T punting, Verizon iPhone more sorely needed than ever

June 2, 2010 by Bill Palmer

Apple often prefers to line up exclusive partners for new products so that the prospect of continued exclusivity can be hung over the partner’s head when need be. And when Verizon originally turned down the opportunity to be that exclusive partner for the iPhone, Apple instead gave the deal to AT&T. Which would be fine if AT&T could be threatened, prompted, or motivated to act like it had a pulse in any manner. Instead AT&T has turned out to be the kind of company that just doesn’t care one way or the other. Instead of enhancing its data network to accommodate the multitude of iPhone users who’ve been making the company rich, AT&T shrugs off any desire for continued growth and instead acts as if it would just as soon not have to deal with all those annoying paying customers. And now that the carrier has announced data usage caps on new iPhone customers, it couldn’t be more clear that AT&T doesn’t want any new iPhone customers.

With its iPhone army, Apple has seemingly exposed – unknowingly, most likely – what in hindsight should have been obvious. All U.S. cellphone carriers, AT&T included, have been skating by on terribly underserved networks for years, only managing to avoid those flaws being exposed due to the fact that most cellphone users, and even most smartphone users, have only ever taken advantage of a small fraction of what they’re paying for. And now that iPhone users have exposed the AT&T network for being the fraud that it is, AT&T would apparently rather simply give up and try to discourage people from switching to the iPhone, for fear that any more users on its pathetic network would cause the whole thing to come crashing down to the point that the company would in fact have to make significant investments in propping it back up; the company has instead made the calculation that it’s better not to bring on new iPhone users and continue limping along with its fractional network than to face the prospect of having to finally invest real money in its network, which judging by how paper-thin the network is currently, could involve real dollars and impact AT&T’s bottom line in the short term.

Make no mistake, other U.S. cellphone carriers (including Verizon) have networks just as horridly under-built as AT&T’s; it’s a racket that’s been going on for as long as the thoroughly unregulated U.S. cellular carrier industry has existed. The only difference here is that AT&T was dumb enough to take on the iPhone stampede with no understanding of the fact that iPhone users were by and large actually going to use the data capabilities of their devices in quantity. That having been said, it’s now clear that AT&T no longer wants new iPhone customers burdening its porcelain network, and so it’s now up to Apple to make a move which remedies this growing problem.

It’s a tribute to Apple that it managed to come up with a smartphone that people are actually using to do things with, but with AT&T slipping into a calculated coma when it comes to continuing to grow the iPhone userbase, Apple now has no choice but to shake up the landscape by offering the iPhone on more than one carrier. Doing so will cause Verizon’s equally porcelain network (or whichever carrier signs on next) to turn into a pumpkin in equally short order. But at least new iPhone users will have the opportunity to pick their poison. And such a move just might push AT&T and Verizon, who are in obvious collusion over the sad state of their cellular networks no matter how many television ads they may run in which they pretend to be competing with each other, to finally have to go ahead and compete with each other in terms of finally building twenty-first century cellular networks instead of the two cups and a string which (all) U.S. cellular networks can currently be compared to.

AT&T will do nothing to fix its network until it begins to feel the sting of losing current iPhone users to another carrier. Despite phony geek claims to the contrary, that’s not happening with Android or any other iPhone knockoff; it’ll only happen when the real thing is available elsewhere. It’s not that iPhone users will find any better of a network with Verizon if they shift over en masse; nor for that matter will they shift over en masse. But even a relatively minor exodus of iPhone users to another carrier, and the subsequent hit to their bottom line, just might b enough to bring AT&T out of its current coma and force the company to make the newly calculated decision to actually invest in its network. Absent any sense of wanting to make the world a better place, absent any business ethics of any kind, absent any whiff of government regulation, and yes, absent any effective maneuvering on Apple’s part thus far, these cellular carriers in here in the U.S. only understand one thing – money – and a Verizon iPhone could solve two problems in forcing AT&T to readjust its calculations in the face of losing customers while bringing the same crushing blow of data usage to Verizon’s equally inadequate network which might in turn force Verizon to think about investing in its own two cups and a string. The good news, then, is that a Verizon iPhone could reportedly be ready to go for Christmas 2010.

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Filed Under: iPod, iPhone, iPad, and iTunes
Tagged: Apple, AT&T, iPhone, Verizon

About Bill Palmer

Bill Palmer is Editor in Chief of Beatweek Magazine. His editorial contributions include interviews with musicians and iPhone industry coverage.

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Solymir

See, I don't think spreading out the iPhone users over two networks is going to be incentive for either one to improve. We'll just have two companies having the same reactionary policy to network load vs one or both doing upgrades ahead of time.