While many iPhone owners hail Apple as saving them from greedy cellular carriers, an analyst now says the company has overturned AT&T and the entire wireless industry — and not always for the better.
Analyst Craig Moffett of Bernstein Research likens the relationship between Apple and AT&T as that between the former and music labels dating as far back as 2001, when Apple first had to ingratiate itself with labels as it incorporated music CD ripping into iTunes. Apple at first won important concessions and praise from its partners, only for them to regret it later as the iPod maker’s popularity left these companies at the supposedly smaller company’s mercy.
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As late as this spring, AT&T has continued to praise the iPhone as virtually saving the company from the US economy’s fallout by driving customers to its network and encouraging them to spend more on data plans. But with the launch of the iPhone 3GS in June and the 3G congestion problems in the months leading up to the handset’s debut, AT&T was increasingly cast as Apple’s anchor — keeping a good device locked to a carrier that doesn’t enable features like MMS and tethering.“Apple has stolen the march, and in the process has recast AT&T from hero to villain,” Moffett says. “At Apple’s June developer conference in San Francisco, where Apple unveiled its new [iPhone 3GS], AT&T was roundly jeered at every mention by the more than 5,000 application developers in attendance… even Apple itself seemed uncomfortable talking about its U.S. partner.”
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Now, the Cupertino company has “radically tilted” the normal balance of power against AT&T and cellular networks as a whole.
And then there’s what’s predicted when Apple finally opens up to other carriers.
What can I say. American’s love to be ripped off. We have embraced this ideal of cheaper phones for long contracts. I would much rather buy a phone then rent one. Which is what these plans amount too.
Can you imagine the loss of sales if everyone had to actually buy a iPhone? What this amounts too is spreading payments of the phone out two years to make it appear less painful. Typical American philosophy buy now pay later.
I used to do contracts. Now I do prepaid and wow is it cheaper.
The money I saved paid for this excellent phone.
It’s better than any iPhone and the long-term costs are much lower.
AT&T is the only one to blame for a crappy 3G network. Here in Holland the iphone is only sold with T-Mobile, but the 3G service is pretty decent so nobody is complaining about T-mobile in the same way.
Do you know what the telecommunication industry and the wireless industry in particular could use? Competition! What say you capitalist wingnuts? Isn’t competition and a free market the foundation of your philosophy? Or are you all just a bunch of fascist corporate shills?
Patrick?
The US does not have “the worst, most expensive cell phone service and providers in the world.” That honour belongs to Canada. I don’t own a personal cell phone and refuse to get one until someone meets my price expections
I dont see the point of the article. How is the iPhone upsetting the industry? The ATT iPhone plan is over priced and the network stinks.
Sound like typical cellular business plan to me. Get em in the door with a good phone exclusive, then treat em like shit for the whole term of the contract. The same thing happened with the razr.
This is status quo.
Agree with #6. Apparently that’s what consumers want, a phone that does everything else, and happens to make phone calls, for $50 a month or more. The cheap plans that charge $10 a month are relegated to basic cable ads.
It’s nice to see Microsoft taking it up the ass from Apple and Google.
I have to say, Tracfone is working nicely for me.
I average probably three or four short calls a day and maybe 3 to 5 text messages — and it costs me less than $10 a month. (sometimes much less.)
OK, it’s doesn’t have all the cool apps but my coverage is as good as the high-end phones.
I also LOVE that I’m not paranoid about losing the phone since for about $30 I can replace it — I hate hate HATE worrying about portable electronics.
c’mon…
“The US has the worst, most expensive cell phone service and providers in the world”
You obviously don’t know the service and providers from Brazil.
Apple is making a killing. AT&T is making a killing but it is having to pay off Apple big time. The people buying the phones most likely are getting the shaft but they went into this with their eyes wide open.
Apple fans have always paid a premium for their fetish. They think they are cool beyond words and others think they are fools.
Fashion junkies might be more like it but since they are the ones that have to pay for it those that see the flaws don’t care. They do get tired of suckers…er, people raving over the things.
I just don’t have the need to remain in constant contact. To all the cell phone users, either get a real life or quit moaning about the cost. When enough people quit using cell phones, the price will drop and quality will increase.
Jobs and Woz got their start hacking mabell, by selling phreaking equipment.
Now Apple has put AT&T in a choke hold, with another of their devices.
I am a PC, but I will give credit to apple when it’s due.
People want more than they need. How many people actually need a smart phone? Hell more people are using an iphone as a toy, playing games. The ipod touch will do the same thing, and wifi. No contracts or expensive data planes. People that visit this site are usually technology oriented. It gives us a false notion about the 98%+ of the world that never learned to get the flashing 12:00 off their VCR’s.