Apple Should Cut Ties with AT&T

How many people enjoy their service with AT&T? <Peers out into audience holding hand over his eyes> Not many, not many. And AT&T just seems to keep getting more unfriendly all the time. Recently they announced data caps just before the release of iPhone 4 (see New AT&T Data Plans Make No Sense), then there have been rumors of micro cell activity (explained here) counting against your data limit. People complain about bad reception in certain major cities, especially New York (which I've experienced myself). So it begs the question, as aggravation with AT&T grows, why does Apple continue its exclusive relationship?

Hasn't Hurt 'Em Yet

If reports last week are to be believed, Apple has already pre-sold more than 600,000 iPhone 4s. AppleInsider reports that one analyst predicts Apple will have 100 million iphone subscribers by the end of 2011.

Earnings reports from the last couple of years show that iPhone sales are driving big profits for Apple. Of course that's US and worldwide, but a big piece of the pie has to be the US market. So whatever warts AT&T may have and however much users complain, Apple is still making big money and selling beaucoup phones. What's their motivation to leave AT&T behind?

I'm Thinking About It

As much as I love my iPhone 3G (and I do) and as much as I want a new iPhone 4 this summer as my contract comes up for renewal, I'm reluctant to stick with AT&T as a provider at this point. I haven't enjoyed my relationship with them over these years. In fact, the only reason I chose them back in the day (we're probably talking late 90s here) is because the phone worked in my house. Over time, I've added my kids to my plan and with rolling contract renewals, it's increasingly difficult to get out from under them. Things have changed since the days I chose my first cell phone. New towers have been built, but for now I'm stuck with AT&T because it would be too expensive to leave.

Nice Alternatives

I have to admit I'm a gadget guy, so as much as I enjoy the iPhone, I wouldn't mind giving one of the Android phones a shot. I've had a look at the Droid (as I wrote in Droid Could Bring Motorola Back From the Dead) and two new phones from HTC, the Magic and the Droid Incredible, both look like serious contenders. I'm not sure Sprint, T-Mobile or Verizon would be any better. Meet the new provider, same as the old provider, but it would be nice to be able to make a real choice.

That I'm even thinking about it should tell you my level of frustration with AT&T. I don't have to have an iPhone, but if I'm with AT&T, I'm getting a smart phone and that's the best one they offer at the moment (in my view). I wish Apple would finally offer the iPhone to other providers, but if people keep buying them from AT&T, why should Apple care who's controlling the pipes?

Photo by bschmove on Flickr. Used under Creative Commons License.

[vaibhav1983]

Hi Ron,

Do not get disappointed. iphone is a very cool gadget to have. The problem does not lie with iphone or android. The problem will be with any of the Data Provider. Even if yopu go with Cingular or Sprint or Verizon the problem will be the same.

Due to iphone the Data Usage of AT&T has multiplied. Earlier with only 2G phones the data transfer was less. But with iphone, Blackberries , android etc. coming to market the data usage has suddenly increased. Criticizing AT&T is very easy on our part but on their part they have to deal with huge spikes in data usage due to the cool features of iphone. They will also be thinking for a solution as the people in at&t also know that they have competition in the market.

[Techwriter10]

Hi Ron,

Do not get disappointed. iphone is a very cool gadget to have. The problem does not lie with iphone or android. The problem will be with any of the Data Provider. Even if yopu go with Cingular or Sprint or Verizon the problem will be the same.

Due to iphone the Data Usage of AT&T has multiplied. Earlier with only 2G phones the data transfer was less. But with iphone, Blackberries , android etc. coming to market the data usage has suddenly increased. Criticizing AT&T is very easy on our part but on their part they have to deal with huge spikes in data usage due to the cool features of iphone. They will also be thinking for a solution as the people in at&t also know that they have competition in the market.

Thanks for the comment, but I can't sympathize with AT&T. They have profited handsomely from the iPhone and they should take some of that money and invest it in their networks to keep up with growing demand. The reaction of a networking company to increased demand should not be to cut access, but to add capacity. They can't cry poverty when you look at how much they have gained from the relationship with Apple.

Thanks again for your comment.
Ron

[Gene Steinberg]

Here in Arizona, AT&T's performance has become much better. I get reliable 3G connections in more places, and the signal strength in the places to which I routinely travel in this state are better. You really think the billions they've spent on upgrades haven't amounted to anything?

More to the point, Apple cannot just shove AT&T aside. There is such a thing as a contract. Even when that exclusive expires, AT&T will still sell iPhones, even if you can also get from from Verizon Wireless and other carriers.

Despite claiming to be a gadget guy, you don't seem to have much of a grasp on the subject. Too bad.

Peace,
Gene Steinberg
www.technightowl.com

[Techwriter10]

Gene,
I think you misunderstood what I wrote. First of all, just because you have better performance in a single state, doesn't mean it's better for everyone. There are places where it's still bad, but that was only a small part of my point. In my experience AT&T has not been customer oriented most of the time. They have chosen to limit network access at a time where their phones require more, not less access. I'm sure the contract with Apple is not endless. Most do have an end point and I'm surprised it hasn't happened yet. I see little advantage to Apple to maintain the exclusive agreement, especially when they want to sell more Apps and that requires bandwidth that AT&T is getting stingier with.

I don't think you need to get nasty because you disagree with me. If you read my posts regularly you would know I cover the space regularly and didn't just write this out of the blue.

Thanks for your comment.

Ron

[Gene Steinberg]

Unfortunately it's still clear you're in over your head.

Here are the facts:

1. Apple's agreement with AT&T, depending on whether the original provisions have been changed, may expire between now and 2012.

2. After that, there's nothing to prevent Apple from seeking other providers in the USA, and no indication they'd maintain the exclusive.

3. It's clear that AT&T is also overwhelmed with the iPhone, since it uses more network resources than other smartphones. In saying that, there's no evidence Verizon Wireless would fare any better. I've had severe problems with Verizon's customer service and won't return to them, even if they can offer a superior network.

4. At present, Verizon cannot offer the same features on the iPhone with their CDMA network, such as being able to take a phone call and check your email or surf the net at the same time. This may require changes to Verizon's network architecture, or you'll have to wait for LTE to be deployed.

5. Other providers are apt to also put caps on bandwidth as demands increase. According to AT&T, only 2% of their customers have problems with the current maximum of 2GB.

It's not a question of disagreement here, my friend. It's a matter of one's grasp of the facts, and you seem to have a few problems there.

Have a nice day.

Peace,
Gene Steinberg

[Techwriter10]

Gene,
You're obviously convinced that you're the only one who understands how this works. When one is convinced as you, there is little point in arguing further. I suggest you read me regularly before you judge me so harshly, rather than waltzing in here with your first post in the community trying to show off how smart you think you are. You make a great AT&T spokesperson. I suggest you go work for them or perhaps you do already.

Ron

[Gene Steinberg]

They say when someone loses an argument, they either change the subject or make personal attacks.

No, I never said AT&T is perfect; I don't believe that for a minute. I also never said I'm the only one who understands how this process works.

So your effort to change the subject is a failure.

I made five points that you cannot respond to. Therefore, you aren't worth any further time or effort, because, as I said, you're in way over your head and your answers (make that non-answers) demonstrate that clearly.

Have a great life.

And don't bother trying to respond.

Gene Steinberg

[Techwriter10]

Gene,

I can actually respond because it's *my* blog. You are welcome to make comments. I just would appreciate it if you would lose the holier than thou tone.

I'm not going to respond to each of your points when I've already made my point about that in this post, in my response or in *other* posts you haven't bothered to read because you are so so convinced of your own position.

Ron

[Gene Steinberg]

That's called the "I am unable to handle your responses because I don't have a good argument" answer. Figures.

Gene Steinberg

[Lectricblue]

Ron, you're article was SPOT-ON!

I've been with AT&T/iPhone for 2 years now here in the Chicago market. I have major problems with my connection dropping dead and then coming back to life (while not even moving!!). I have had numerous problems with my billing both here, and while traveling abroad.

I paid an enormous amount of money to use my iPhone in Europe/Africa for a month last year and apparently, some locations were not covered under the plan for the discounted rates. I had to argue with a manager at AT%T and even then, they just matched the rates that I was supposed to get in the first place which were outlined on the global map they provide online.

At my parents place, where they have Verizon... they have ZERO connection problems. My iPhone freezes up as it randomly swaps between Edge/3G coverage or just dead. Verizon, perfect. AT&T, dead.

What baffles me is how Apple stays in a contract with ANY single provider. Why limit your market to just AT&T subscribers? Why on earth would you do that? If you're phone could be used on any network... why would you pick only ONE?

[Lectricblue]

A couple more things.

You should do an article on how mobile technology is shifting to data > Voice. At some point we will no longer buy those overpriced minutes packages and will move into pure data packages. The truth is, voice is essentially data right? Why do we pay for both? Mobile to Mobile calls don't even go through an automated switch-board anymore. If I could freely use Skype on my iPhone, I would ditch my minutes plan all together and go pure data.

The other thing I wanted to point out is that Gene Stinkberg is a blog-troll. The best thing you can do is ignore it, and stop feeding it. Once they go hungry, they move on to another blog. Gene, that's called the "GTFO response". Figures.

David

[Gene Steinberg]

It's called an exclusive contract. You can't just break it, even if there's reason to do so. But it's not a forever contract. No doubt Apple will expand to other providers when it's done.

Remember that, when the iPhone was first being developed, there was no reason to take Apple seriously or agree to their demands for an extraordinary amount of control over the platform. AT&T was actually taking one huge chance here, considering that the iPhone might have been a non-starter, despite Apple's previous record for success.

Peace,
Gene Steinberg

[Gene Steinberg]

No, Gene Steinberg is actually someone with over 20 years of experience in the personal technology field, author of over 30 books, and host of two popular online radio shows, both of which will soon be nationally syndicated.

David, whoever he really is, is not telling the truth. Another excuse for being unable to respond to my five original points. Sounds to me as if David is the troll here, by making this gratuitous remark.

Gene Steinberg

[Techwriter10]

David,
Thanks for your comments and for sharing your experience. I appreciate the support.

Even though I don't agree with Gene I really ask that we keep all of conversations civil without name calling or attitude as much as possible.

I welcome comments from everyone, whether they agree with me or not.

Thanks again for taking the time to comment.

Ron

[Gene Steinberg]

OK, at least you are being civil about the whole thing.

Now care to respond to my five points on page one?

Peace,
Gene

[Lectricblue]

OK, at least you are being civil about the whole thing.

Now care to respond to my five points on page one?

Peace,
Gene

I'll take on your 5 points.

1. Apple's agreement with AT&T, depending on whether the original provisions have been changed, may expire between now and 2012.

Based on court documents the contract is 5 years long. (As of 2007) Unless, like you said, the contract has been altered/extended and given that both parties meet the requirements outlined in the contract. The truth is, nobody REALLY knows the current/true length of the contract. Your guess is as good as any other. Though my guess would be, AFTER January 1, 2012.. not between now and 2012.

2. After that, there's nothing to prevent Apple from seeking other providers in the USA, and no indication they'd maintain the exclusive.

Again, you are taking a guess here and I'd agree with you. Why would they want to remain exclusive to a single provider? AT&T could make an offer Apple can't refuse, but I'm doubtful at this point.

3. It's clear that AT&T is also overwhelmed with the iPhone, since it uses more network resources than other smart phones. In saying that, there's no evidence Verizon Wireless would fare any better. I've had severe problems with Verizon's customer service and won't return to them, even if they can offer a superior network.

AT&T has had 3 years to upgrade it's network to take on the new challenges stemming from the increase in smart phones. Instead of resolving the problem and growing with the trend, they've decided to cap it and charge MORE for using it. Verizon's solution is the upgrade of it's already superior 3G network.

Now, to address your "...there's no evidence Verizon Wireless would fare any better." statement. The evidence is VERY clear whom could handle it's customers better.

I. Verizon's 3G coverage is 5x higher than AT&T's.

(Source: http://revolver360.files.wordpress.com/2009/11/mapforthat.jpg)

II. AT&T Holds the #1 spot for MOST complaints filed with the FCC amongst wireless carriers. Verizon is #7.

(Source: http://www.fcc.gov/)

III. In 2010, J.D. Power ranked AT&T as the lowest in a Wireless Customer Care Performance Study. Verizon was #1.

(Source: http://www.jdpower.com/Telecom/ratings/wireless-customer-care-ratings-%28volume-1%29)

IV. In a 2010 study, J.D. Power ranks AT&T as the lowest in wireless call quality across ALL of the USA. Verizon ranked #1 in almost all the areas of the USA.

(Source: http://www.jdpower.com/Telecom/ratings/wireless-call-quality-ratings-%28volume-1%29)

V. A 2009 study by Consumer Reports finds that AT&T ranks lowest in Overall Cell-Phone Service. Again, Verizon is #1.

(Source: http://digitaldaily.allthingsd.com/files/2009/12/crBIG.jpg)

I could go on but I'll stop here. It's conclusive which network is best at handling the upsurge in data usage/network resources. Which, by the way is a 2-part problem. It's not just data usage causing the problem, but the way smart phones interact with the networks.

4. At present, Verizon cannot offer the same features on the iPhone with their CDMA network, such as being able to take a phone call and check your email or surf the net at the same time. This may require changes to Verizon's network architecture, or you'll have to wait for LTE to be deployed.

You are correct here. The CDMA network is.. ehhh. I don't know where they stand on the LTE deployment. It was supposed to have been completed by the end of 2010. Who knows?

5. Other providers are apt to also put caps on bandwidth as demands increase. According to AT&T, only 2% of their customers have problems with the current maximum of 2GB.

Please provide a source for "Other providers are apt to also put caps on bandwidth..". My findings are to the contrary as other networks are upgrading.. not charging more and capping. I still get unlimited for $30/month myself. I'm happy that I never have to worry about going over. After we all start using the iPhone 4.. with it's HD Video recording and 5MP camera.. let's just see how "happy" customers are when they go over that 2gb limit.

[Techwriter10]

Hi David:
Thanks for taking that on. I can't tell you how much I appreciate it.

I agree with your take here (and I've pretty much said this already, which was my point).

Thanks again.

Ron

[Lectricblue]

Hi David:
Thanks for taking that on. I can't tell you how much I appreciate it.

I agree with your take here (and I've pretty much said this already, which was my point).

Thanks again.

Ron

Thanks. All I did was elaborate on what you've already summarized in your blog. I'll be keeping an eye out for your next post.

Best Regards,

David

[Techwriter10]

Thank, David.

Ron

[Gene Steinberg]

I agree mostly with the five point response posted here, but there are a few quibbles:

AT&T has improved its network in some respects, and has reportedly allocated billions of dollars for the purpose. Reception here in the Phoenix area is better now, very much on a par with Verizon Wireless in the areas in which I routinely travel.

That said, I grant that service is still not acceptable for some of you. Whether it's because iPhone users simply use greater amounts of bandwidth than other smartphone users, or AT&T's upgrade has fallen way short of its promise, is an open question, and it's possible that other services would be negatively impacted under similar circumstances.

Personally, nobody could pay me to return to Verizon. I have tried to help my sister-in-law deal with some minor account issues with that carrier from time to time, and their customer service has become near as bad as Sprint or Qwest over the past year.

As to why AT&T got the exclusive, at the beginning of this game, AT&T may have been the only major provider in the U.S. to agree to offload control of the iPhone to Apple. That's the main reason it turned out this way, not to mention the limitations of CDMA in handling calls and checking your email at the same time.

As to Verizon planning tiered pricing for data plans in the future, the statement to that effect comes from their CEO:

http://www.networkworld.com/news/2010/052710-verizon-tiered-lte.html

Peace,
Gene

[JOSheaIV]

I just wish someone other then mac would create something almost identical to the iphone (I want to write apps for one but don't have a max and I hate apple, also AT&T sucks...Verizon)

[Lectricblue]

I agree mostly with the five point response posted here, but there are a few quibbles:

AT&T has improved its network in some respects, and has reportedly allocated billions of dollars for the purpose. Reception here in the Phoenix area is better now, very much on a par with Verizon Wireless in the areas in which I routinely travel.

That said, I grant that service is still not acceptable for some of you. Whether it's because iPhone users simply use greater amounts of bandwidth than other smartphone users, or AT&T's upgrade has fallen way short of its promise, is an open question, and it's possible that other services would be negatively impacted under similar circumstances.

Personally, nobody could pay me to return to Verizon. I have tried to help my sister-in-law deal with some minor account issues with that carrier from time to time, and their customer service has become near as bad as Sprint or Qwest over the past year.

As to why AT&T got the exclusive, at the beginning of this game, AT&T may have been the only major provider in the U.S. to agree to offload control of the iPhone to Apple. That's the main reason it turned out this way, not to mention the limitations of CDMA in handling calls and checking your email at the same time.

As to Verizon planning tiered pricing for data plans in the future, the statement to that effect comes from their CEO:

http://www.networkworld.com/news/2010/052710-verizon-tiered-lte.html

Peace,
Gene

Thanks for the well thought out reply Gene. You bring up two great points:

1. Location, Location, Location. Where you are is probably the greatest factor in determining your level of quality with a given wireless carrier. An A+ in Phoenix is a C- in Chicago.

2. Customer Service. You could call and get a customer service rep who is a complete idiot or someone who's just having a real bad day. Hell, that could happen to you a couple of times. Maybe it's a roll of the dice and my friends who have Verizon have just been... well.. lucky.

I believe those two factors will determine someone's satisfaction with their wireless carrier more than anything else.

I appreciate the link regarding Verizon's plan to move into the same data pricing as AT&T. I stand corrected. That's too bad. I suppose the scale will tip and while minute packages become obsolete, data packages become more expensive.

I came out throwing a few punches at you Gene. Sorry for the name calling. However, I would suggest being a little bit easier on Ron and keep in mind, a little sugar goes a long way. ;)

Note: I'll edit my previous "troll" post and remove the name calling.

**UPDATE**
I was unable to go back and edit that old post. Sorry buddy. : /

[Gene Steinberg]

My customer service experiences involved not just one or two complete idiots over the period of a day or two, but weeks of similar issues. In several cases, I was promised callbacks from someone in management to address my concerns. Only one person actually called back, after I repeatedly complained.

Maybe the luck of the draw, but that's how it is.

Your troll comments are forgiven. No sweat! I've made great friendships with people after initial disagreements. Pizza or "pseudo" kosher food is on me whenever you visit Phoenix.

Peace,
Gene

[Techwriter10]

Glad the conversation ended on a positive note. Thanks for all of your comments and for the lively discussion. All's well that ends well.

Ron

[Gene Steinberg]

The invitation applies to you, too, Ron.

Besides, I think the entire mobile phone system is barely adequate. I get better sound from two tin cans connected with a string. :)

Peace,
Gene

[Techwriter10]

Thanks, Gene. Appreciate it.

Ron

[vaibhav1983]

@Techwriter

What is the alternative that Apple has and what is the alternative that AT&T has to improve...we could discuss the options...I guess that would be more constructive...

[Techwriter10]

The alternatives are the other carriers. That seems pretty clear. In the US we're talking Verizon, Sprint and T-Mobile. Whether these options are any better isn't clear, but it would be nice to have a choice.

Thanks for your comment.
Ron

[Gene Steinberg]

My gut feeling remains the same: When Apple's contract with AT&T expires, the iPhone will also be available to other carriers. Meantime, AT&T supposedly has improved service in NYC, and is currently working in Chicago and San Francisco. No idea how well they're doing of course.

Peace,
Gene