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AT&T Appears To Be Preparing for iPhone Competition
AT&T and Apple appear to still be close, but their exclusive iPhone contract is getting a lot of scrutiny. With CDMA and 4G versions of the iPhone reported, competitors like Verizon Wireless could get a shot at selling Apple's market-boosting iPhone. AT&T appears resigned to change, even helping Apple improve performance on its network.
Finally, with a new version of the iPhone likely just months away, AT&T will soon learn the fate of its exclusive U.S. contract with Apple.
Apple's faith in AT&T seemed reinforced in January when it named the carrier as its exclusive partner for 3G iPad coverage. AT&T CEO Randall Stephenson recently downplayed that connection, however, by saying at a tech conference that the iPad is likely to be mostly a Wi-Fi-driven device that won't take much of a toll on AT&T's 3G network.
No Monthly Contract
"I think both parties will make sure the network is optimized for the device before launch," said Michael Gartenberg, a partner at the consulting firm Altimeter Group. "Given that it's not a monthly contract device, that will also help alleviate the load. Apple and AT&T have been very close since [the iPad] launch. In fact, Apple has gone a long way defending AT&T as a partner, and it would appear that the relationship is quite solid from both sides."
The Wall Street Journal on Wednesday reported unnamed sources briefed by Verizon Wireless as saying Apple is working on a CDMA-compatible iPhone, which could realize a dream for many to have Apple's hardware running on top-carrier Verizon's network. A recent poll has shown that iPhone users would switch. CDMA is also used by Sprint Nextel.
According to various reports, a 4G iPhone will debut as soon as June, still made by Hon Hai Precision Industry, with the CDMA version made by Pegatron Technology as soon as September.
But it's hard to dismiss what seems to be a loyal relationship between the two major corporations. The Journal also reported this week that AT&T technicians went to Apple to help it improve the iPhone's connectivity .
Crash Course
AT&T's chief technology officer, John Donovan, told the Journal that his engineers gave their Apple counterparts a "crash course" in wireless networking .
"They're well past networking 101, 201 or 301," he told the paper, and Apple is now "in a master's class." It's unclear what changes were made to the iPhone as a result of the collaboration .
That may suggest that AT&T sees the writing on the wall and knows its exclusive iPhone days are numbered, said wireless analyst Kirk Parsons of J.D. Power and Associates.
"It just shows how AT&T and Apple have learned from past experience what needed to be tweaked further to optimize the overall service experience and solidify customer loyalty, knowing full well that another competitor carrier will start to offer an iPhone device in 2010," Parsons said.
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