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Dear AT&T: Maybe It’s Time to Get On the iPhone Bandwagon

I’ve defended AT&T on occasion regarding the iPhone, but their latest moves (or non-moves) make it hard to do so.

To recap their defense, I’ve praised AT&T for the following:

• Without AT&T we don’t even have the iPhone as we know it. You think Verizon was gonna allow it? Heck, it’s been two years and there’s still no Wi-Fi on Verizon’s phones.
• At initial iPhone launch the unlimited data at $20/month was better than most, and in-home activation was also new. (For 3G they raised the data rate to $30, but that was what they charged for other 3G phones, so it’s not as egregious as some think.)
• They leveraged their Wi-Fi hotspot service and made it free to iPhone (and other smartphone) users. This is huge, and something I use daily.

Yet, for all the good, AT&T lately is acting like a tanker that takes forever to turn. Apple could barely contain their disgust with them in the WWDC keynote on June 8. In my opinion, AT&T has been a clear disappointment in four areas. Let’s take a look at those.

MMS

The iPhone will get it late this Summer. Yes, all its other phones have it now, but the iPhone must wait. This is nonsense, and I don’t believe it’s due to any technical hurdle so much as fear on AT&T’s part that somehow its network will collapse. I’ll discuss the network shortly, but AT&T should look at it this way: It can be criticized for poor coverage, dropped calls, and no MMS, or just for poor coverage and dropped calls. That’s its choice.

Tethering

This one’s worse than the above. Not only is it allowed for other phones (though it costs too much), but in the iPhone’s case AT&T won’t even supply a date! Instead AT&T just says “it’s coming,” as if that’s supposed to mean something. I believe this is another case of the company thinking its network will fall apart when it allows it, but I’m not buying it. The iPhone is not hammering its network because of the 10 percent of iPhone geeks grabbing a load of bandwidth, but rather because, of the millions of iPhone users, the remaining 90 percent use it much more than the average smartphone user.

To clarify that last statement, assume two groups: One of 10M Blackbery Curve users, the other 10M iPhone users. Each group has their 10 percent using the system relatively heavily. The difference is the remaining 90 percent. Those Curve users hardly use it at all (relatively speaking), whereas the iPhone users do. Month after month of web market share figures confirm this fact (this isn’t about the Curve, substitute any high-volume smartphone and you’ll see the same thing).

So if AT&T really wanted to avoid the alleged network collapse, it’d have to stop adding new iPhone users, not limit the 10 percent who currently use it most. Tethering will not harm their network nearly as much as the flood of new customers getting on board with the cheaper 3G or new 3G S models, yet I don’t see AT&T rushing to limit them.

Low-Cost Data Plans (and $99 iPhone)

There were many rumors of a “low cost” data plan for the iPhone. Most suggested maybe $20 a month with a cap of 200MB or so. While that cap is small to me, it would likely cover most people attracted to the cheaper iPhone, and for those it didn’t they could upgrade to an “unlimited” plan anyway.

I can’t help but think the $99 iPhone 3G and the rumored low-cost plan were meant as a one-two punch in the face of every smartphone vendor. The iPhone pretty much set the smartphone price floor at $199, and even then RIM’s Storm and Palm’s Pre required mail-in rebates to get there. Dropping it to $99 could be a huge blow.

But a $99 iPhone only harms the competition when people buy it, and staring at a ~$75 monthly bill will restrict sales. The rumored “low-rate” plan would drop that by $10-15 a month, and with the $99 phone that would be a huge draw. But no new pricing has been announced, even though the $99 iPhone is here.

The Network

Whether it’s just an excuse or the real deal, this all comes down to AT&T’s network and the appearance it seems to convey that it’s a house of cards waiting to topple if they add any new features for the iPhone crowd (though, strangely, they can add as many new iPhone customers as they want). And all we get from AT&T on this is talk.

Here’s my advice to AT&T: Let half of the marketing people go. You know, the ones writing the press releases about improving the network with so much technology that soon we’ll be able to connect to the Hubble telescope and control it with our phones, and instead hire more people to actually do the upgrades. It’s cliché, but talk is cheap. When you brag about the advancements on paper, but don’t allow MMS and tethering, well, let’s just say I know which action I put more stock in.

[Thanks: http://theappleblog.com]

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