“Apple must do whatever is necessary to buy off AT&T. Ma Bell is killing the iPhone,” Tim Beyers writes for The Motley Fool.
“Twice last week, the Mac’s daddy debuted — and then pulled — a tethering application called NetShare from the digital shelves of its App Store. As of Monday, software developer Nullriver said that email problems on both ends led to the interruptions,” Beyers writes. “Really? I find that barely plausible at best… It seems more likely to me that AT&T objected to what NetShare does.”
“Tethering allows a cell phone’s connections to the Web to be shared with other devices. NetShare would allow a MacBook to plug into AT&T’s 3G network when Wi-Fi is unavailable. Alas, Ma Bell’s iPhone usage terms prohibit exactly this sort of activity,” Beyers writes.
“Tethering is an extra… AT&T sells it for $15 a month to customers whose use Motorola , Nokia, and Research In Motion handsets, but not to iPhone users like me,” Beyers writes. “Think about the consequences of that: Apple may have just blunted innovation on the iPhone for the sake of a partner that wants to sell more stuff. It’d be unthinkable if it weren’t so logical. (AT&T has also twice hung up on on free Wi-Fi for iPhone owners.)”
Beyers writes, “Apple should use whatever portion of its $20 billion war chest is necessary to buy off AT&T and escape from their exclusive iPhone deal. Only then will the iPhone grow to be the pervasive platform that the company and its investors desire.”
Full article here.
While we fully understand Beyers’ angst, it’s completely overblown. Ma Bell isn’t killing the iPhone; they’re killing tethering. Tethering or the lack thereof simply has no real effect on iPhone’s ability to grow to be a pervasive platform.
That said, the number one reason people tell us they can’t get an iPhone today is: AT&T. Due to no or poor network coverage where they live and work. If Apple offered the iPhone through other carriers, sales would explode even more than they are currently. Carrier exclusivity limiting sales is a good reason why Apple might want to try to dump out of their U.S. contract with AT&T, not tethering.
Of course, If Apple were to let more carriers into the iPhone party, the carriers might be less willing to subsidize so dramatically (like AT&T), which would result in higher iPhone retail prices that would also limit sales. Therefore, it’s probably best to do it the way Apple is doing it now until economy of scale kicks in enough to drive down iPhone’s unsubsidized cost to levels within the reach of the mass market.