Filed under: Analysis / Opinion, WWDC, iPhone
The dying goodwill toward AT&T
Congratulations! When Apple releases iPhone OS 3.0 next week, we'll finally be gaining the following features ...Multimedia Messaging Service (MMS)! ... unless you're on AT&T.
Tethering! ... unless you're on AT&T
A brand new 16GB iPhone 3G S for only $199 with a two-year contract! ... unless you're on AT&T and already own an iPhone 3G.
AT&T has long been the subject of grumbling from the community of US iPhone users who want to use their phones legitimately. Ever since the original release back in 2007, it feels like AT&T has been trying to play catch-up when it comes to service and tower availability. But, the release of the iPhone 3G S might be the straw that breaks the camel's back. I can walk down to my local AT&T store and pick up a cheap handset for less than $100 that will have MMS. AT&T knew this day was coming. The company may wail and gnash its teeth, complaining that it aren't ready for this, but it should be, especially since Boy Genius Report tells us that all AT&T needs to do is manually remove the opt-out code!
It was even apparent during the keynote yesterday that Apple sounds pretty disgusted with how far behind AT&T is dragging them. Notice the absence of any AT&T personnel on stage. Had AT&T been on the ball to begin with, it most likely would have taken center stage -- boasting about all the improvements that would garner shiny new services for iPhone users and more money for the corporate coffers. But it didn't, and the tension coming from Apple during the moments when MMS and Tethering were announced was pretty tangible. Apple had all of these features that people have been begging for ready to go, and now Cupertino is forced to wait for AT&T to finish twiddling its thumbs and do what it should have done two years ago. I wouldn't even be surprised if AT&T somehow found a way to block copy/paste!
A small footnote on Apple's iPhone page indicates that MMS support from AT&T will be coming later this summer. Another note on the 3.0 software pages says that tethering isn't available in the U.S. and some other countries, although Engadget cites AT&T sources who say it's coming -- there just isn't anything to announce yet.
Then there comes iPhone pricing. Those expecting a repeat of last summer's offer to replace their current iPhones with the latest model on the cheap are being sorely disappointed. You can read full details on that kerfuffle thanks to one of the recent additions to our team, Michael Jones. However, our commenters do have a point with that one -- those who bought the first generation iPhone paid the full price right off the bat, but later buyers were able to get the iPhone 3G at a subsidized price. Like with any other subsidized phone with any other carrier, you'll have to pay a pretty hefty price for the privilege to upgrade before you're eligible. For me, that'll be in October 2010. By then, the iPhone 3G s4π will most likely be out. Still, people aren't happy with this one either.
The ramifications for AT&T will come when it sits down at the negotiation table with Apple to extend its current gig as exclusive carrier for the iPhone in the United States. Apple won't forget that AT&T didn't have key features in place when they needed to be there. If Verizon, T-Mobile, Sprint, or any other carrier can convince Apple that they would be ahead of the game while AT&T lags (and, believe me, it wouldn't be that hard of an argument to make), Apple will take its toys and go elsewhere. And loyal iPhone users would follow. I know I would.

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Reader Comments (Page 1 of 11)
htmlreal said 11:23PM on 6-08-2009
Best blog post on here in a long time, well put!
I never owned a iPhone and never will till AT&T get there head out of their rears and lower prices on their plans and get on the game.
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Nick said 12:49AM on 6-09-2009
I really question your writers/editors' depth of understanding with blog posts like these. Sure, this isn't advertised as investigative journalism, but you are a well-read blog and seem to think you understand technology better than most people. Right?
So please get your facts straight.
With all other phones on the market, there are two protocols for MMS (higher bandwidth) and SMS (lower bandwidth), but with iPhone, Apple has demanded these two services share one line of higher bandwidth. This has forced AT&T to alter their entire network to accept this protocol, and though they could likely offer the service on day 1, users (not unlike yourselves) would likely complain more if an advertised feature didn't work correctly.
Beyond the technical aspect, there is a billing change that needs to occur as well. Think about this one--no iPhone has MMS features enabled in AT&T's billing system. Imagine AT&T upgrading about 7 million iPhone users all at once and adding another few hundred thousand in the matter of a few days, and this would occur in a mixed billing system that's been pieced together as a result of several mergers in the past few years. Though you might fault AT&T for having an inefficient billing system, you might also note that Verizon (or even Sprextel) has merged just as many times and has as many billing issues as the next guy.
Billing and adapting to the iPhone aside, does anyone even remember last year's iPhone 3G launch? Do you recall the mass migration of customers to AT&T plus iPhone 2.0 upgraders plus activations through iTunes plus increased data loads. Apple's servers were the first to crash. Apple couldn't communicate with AT&T's billing system at times. Data speeds dropped or flat-out disappeared. In short, chaos ensued. Adding MMS and tethering would only make this situation worse by creating a new avenue to drain tower resources or add more stress to the network. This too would not be good for customers, and the same issues would occur on any network overloaded with new customers or with phones enabled with new, data-intense features.
Lastly, you all seem to have forgotten that the grass isn't always greener on the other side. Remember how companies usually do business with Verizon? Yeah, they do it Verizon's way or no way--which happens to be Apple's own philosophy. Remember how Verizon castrated Bluetooth by disabling use of its syncing? Or recall how no regular Verizon phones had manufacturer software, only Verizon's sluggish, outdated offerings? Plus, that could only sync through Verizon's PC-only syncing software. Furthermore, this pattern of control continues today with Verizon crippling the Storm by forcing RIM to remove its Wi-Fi in the US. Honestly, is this any better a situation? I personally think not.
Does AT&T lack services or quality? Absolutely--but so does Verizon. In the end, they are all data carriers, and each will have its own limitations. As a daily user of both networks, I see faults and values in each company; so before you grab your pitchforks and torches, educate yourself and allow yourself excitement for the launch of the best mobile phone yet.
Toby12188 said 5:54PM on 6-10-2009
@nick: I agree with everything you say except for your excuse for AT&T's billing system. They knew well ahead of time this day was coming and there are any number of ways in which they could prepare iphone plans to support MMS, and to be honest billing shouldn't even have a whole lot to do with it since (please correct me if i'm wrong) they're supposedly not going to be charging extra for the capability to do MMS messages.
Jake G said 1:01AM on 6-09-2009
I think there is more to it then that.
Check this out: http://bit.ly/12yXue
I think this is a pretty good problem that AT&T might have on their hands.
puhsitch said 1:38AM on 6-09-2009
But Nick, it doesn't matter what happened last year or what other service providers do. Regardless of all the excuses, the fact remains that something is out of sync. Surely AT&T has had solid knowledge of what they've been needing to do to prepare for future hardware/services. They've had almost two years of experience to figure this whole iPhone thing out. From the way it's been panning out, it sounds like they're simply not doing a very good job of following through with their commitments.
Also, they've been doing a craptastic job of expanding their 3G network coverage. They need a good kick in the pants.
tudor said 1:43AM on 6-09-2009
@Nick
where did you hear that Apple wants AT&T to put mms and sms on the same channel?
not sure that would even be possible since mms uses sms to send a pointer to the mms to the receiving phone.
As for billing, Boy Genius pointed out that all ATT needs to do to enable mms is to remove some opt-out codes on iphone accounts. Even if this weren't the case I heard that mms would just be included into the sms accounts on ATT, which means billing should already be set up to go.
if mms isn't going to be included then I could see billing issues pop up. not to dredge up old arguments, but it should be included anyway considering the $30 data package all iphone 3g users have.
either way it comes down to this: ATT blows my b's and the second I can, I'm jumping ship
mAx said 2:36AM on 6-09-2009
i would pay ANY!!!!!!!!!!!!!!!!! amount of money to cancel my &^#&(( ATT account if I knew Apple was going somewhere else................... ANY!!!!!!!!!!!!!!!!!
Andre said 8:11AM on 6-09-2009
@Nick
It really sounds as if you are defending AT&T's choice not to be proactive. If they were unprepared for last year's 3G rollout, then that is really bad for them. They knew it was coming, and they knew what to expect.
Even Rogers in Canada has MMS enabled, and it seems to work fine. They have even come out and said that tethering is OK if you're on a data plan with more than 1GB of data.
If AT&T are not able to handle a change to 7 million accounts, then they can do it on request. Only a fraction of its customers care about either MMS or tethering anyway.
If AT&T cannot deal with the iPhone and its features - with all of the advance notice it gets - then maybe Apple should move their product to a different provider.
From what you say, it sounds updating 7 million customers' accounts is a major undertaking. I suspect that there's either a global setting somewhere, or they could run a script or something. As for the future ones, they could change their default settings so that it is enabled by default.
I thought Megan's article was very good. She doesn't have to be an expert in anything to call it like she sees it. And it does sound like AT&T just cannot (or will not) keep up with the rest of the world.
Do you think the mobile companies in places like Japan are as unprepared? I suspect not, and I think they have a few more customers than your beloved AT&T.
PSM said 10:03AM on 6-09-2009
Well said, Nick, especially the part about Verizon. IMO, AT&T and Verizon are both the evil empire, and Sprint and T-mobile just don't have the resources to compete, and if they did, they'd probably be evil too. It's a no-win.
I returned to AT&T because of the iPhone, and if Apple moved elsewhere, I would follow, but unless there is a major shift of power in the wireless industry, or some serious legislation, I have no hope that consumers or handset manufacturers will be given any freedom to choose how they use their phones, regardless of what carrier they are with.
inteller said 10:03AM on 6-09-2009
You think you are complaining now, just wait until you see the price ATT will make you pay to tether. it won't be anywhere NEAR the price you pay today even though it will provide the same rates of data your iphone enjoys today.
ATT, laughing all the way to the bank.
email said 10:54AM on 6-09-2009
@Nick
You're forgetting that MMS used to work in the US on iPhones with SwirlyMMS. AT&T turned everones MMS off in one sweep they can turn it right back on the same way. I'm sure it wasn't a one time one way process.
Pat said 11:12AM on 6-09-2009
I purchased an original iPhone 1 week after they came out and held off on the 3G upgrade last year. I was very excited after seeing the keynote yesterday. However, I was infuriated today when I read the fine print at the bottom of the iPhone section of the Apple online store. From my interpretation, it appeared that I was not eligible for the low pricing announced (without disclaimers or footnotes might I add) at yesterday's keynote.
Regardless, I decided to continue the process just to see if I would qualify (which I did). So, according to the qualification process, I did qualify but they could not complete my request to order/reserve the phone. That has to be done at an Apple store (2 hours away for me).
So my point is, before you get too terribly upset with the pricing situation, look into it as you may actually qualify. I think it has more to do with AT&T's new phone qualification schedule (which I would surmise is very similar to other carriers) in that you are only eligible for a free/discounted phone upgrade ever so often.
Here is the message I got after entering my info:
As an existing customer, you qualify for the following iPhone pricing: You'll be able to choose the iPhone you want a little later in the process.
$99.00* — 8GB iPhone 3G (black)
$199.00* — 16GB iPhone 3G S (black or white)
$299.00* — 32GB iPhone 3G S (black or white)
Again, I purchased the original 8 GB iPhone a week after they came out and have not upgraded since.
On a side note, I have to credit an AT&T representative at my local AT&T store. A few months ago, when we decided to add a line/phone for my daughter, we were considering using my "free-phone upgrade eligibility" to get her phone for free. The AT&T rep wisely talked me into "saving" my upgrade and paying the $50 (I think it was) to purchase her desired phone. Because I did that, I can now save $300 and use my upgrade now to get a new iPhone! Thanks local AT&T dude!
ski.the.selkirks said 3:37PM on 6-09-2009
@Nick
Verizon said late in 2007 that they would open up their network, as a stipend of their acquisition of the new government-auctioned spectrum, to any phone that would run on it. The old Verizon is no longer. They are making great strides toward opening their network.
That said, I don't think we'll see an iPhone on Verizon until their LTE/4G network is operational. Which means probably at least 2011.
drTh20dog said 11:03PM on 6-09-2009
Nick,
Get off your high elitist horse. Whatever the technical reason, at the end of the day, AT&T hasn't matched up to the demands that Apple asks. In business, it's "deal or no-deal". Read up on it, and educate YOURSELF.
When Apple leaves AT&T for another carrier who commits at the "business level" that they can make the "technical" happen (and hence write a check that their a$$ has to prove out), be sure to share in the milk as you and the once-proud AT&T start your crying.
The bottom line is...technical never matters. It's business that wins. And if you don't play, you can't win.
Let me ask you this. Didn't Apple send a clear message yesterday that they're not interested in working with AT&T, for whatever the reason? I mean, do you see Apple telling customers to get their phone at the AT&T store? No, you don't. You order it online at apple.com.
Doesn't that tell you that Steve and company are "over AT&T", for whatever reason?
Christian de Saint Preux said 11:26PM on 6-08-2009
I would too
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owenmhv said 11:35PM on 6-08-2009
I hope the revenue sharing is offsetting the lost revenue from being tethered to AT&T
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taiki said 11:36PM on 6-08-2009
Depending on your contract, your wait may only be a year from purchase of your 3G.
I went to check the eligibility of my upgrade and AT&T cited a date in October... THIS YEAR for eligibility for upgade. Not in 2010.
Of course this does depend on the specifics of your contract. I'm on a family plan with my mom(Hey, i'm in college! Cut me a little slack), and it's probably set to offer upgrades every year or so. So, check the terms of your agreement.
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vectorelement said 12:42AM on 6-09-2009
I'm on a Family plan with my mom and I graduated college 4 years ago. Don't sweat it =)
Back on topic, I purchased my 2G iPhone in Nov '07, and I was eligible for the $299 pricing for the 32GB 3G S; I can expect my iPhone within 2 weeks.
Tyrannous said 11:35PM on 6-08-2009
im ready to leave ATT.
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Florian said 11:38PM on 6-08-2009
I am seriously starting to consider looking into unlocking my iPhone and switching to another service provider...