By Steve Green updated on 06/11/2009
AT&T is firmly planted as the number two wireless carrier in the United States and there's little reason to believe that will be changing anytime soon. Apple's relationship with AT&T to be the exclusive carrier for the iPhone has been hugely profitable for both companies as well, however there is a growing rift between Apple, iPhone users and the wireless giant. This rift could eventually lead to huge subscriber losses for AT&T if Apple and dissatisfied customers have their way.
News reports of Apple having high level talks with Verizon Wireless have been swirling around the web for weeks now. With AT&T's exclusivity for being the sole carrier of the iPhone ending in the next year, they are becoming concerned about their marketshare and have been trying to woo Apple into extending the exclusivity deal.
There's a good reason why; AT&T has lured large numbers of subscribers from every major carrier in the U.S. since the iPhone was launched in 2007. It's a compelling device that wins people over even if the coverage is spotty where they work or live. The iPhone has truly changed how people use a mobile device in their daily lives and has changed people's expectations of wireless carriers and the devices they offer.
The trouble for AT&T is that many of their new subscribers came over specifically for the iPhone despite their disdain for the carrier. Many users are openly hostile about AT&T's service and coverage and would love to jump ship if another carrier picked up the iPhone. The announcment of the new iPhone 3GS at this weeks developer conference showed that there's no love lost between Apple and AT&T as it was made clear that the long awaited features such as MMS and tethering were not supported by the carrier at this time. Apparently, the audience was not amused either.
The excitement about the new iPhone 3GS was further dashed as it was learned that AT&T was not offering a lower cost data plan that had been rumored and that current 3G users would have to pay double to obtain the anticipated new iPhone. Leaving millions of iPhone users in the lurch who want to upgrade but can't or won't pony up the $400 to $500 to get the 3GS seems unwise of AT&T and hopefully they will relent for early upgraders, however this seems unlikely. It further shows the growing dissatisfaction of the inflexible 2-year contact burden on users from wireless carriers.
Wireless carriers such as AT&T don't seem to fully understand that the world views the iPhone as a mobile computer, not a cellular phone. The fact that it makes phone calls is secondary to what it really is which is a mobile computer that intergrates into people's daily lives. Apple makes computers, they are not a cell phone manufacturer and have no desire to be. Wireless carriers view everything as a phone first and barely grasp the shift in mobile computing needs. The wireless carrier is a means to an end; nobody really cares about the name behind their phone or PDA carrying the voice or data. What we all need is the ability to choose our wireless device and then a carrier that has good coverage, speed and pricing. Eventually we may be able to take any device to a carrier of our choosing, but for now iPhone users will have to stay with AT&T.