Customers miffed as AT&T can’t keep up with Apple’s data-guzzling iPhone

Apple Online Store “Slim and sleek as it is, the iPhone is really the Hummer of cellphones,” Jenna Wortham reports for The New York Times. “It’s a data guzzler. Owners use them like minicomputers, which they are, and use them a lot. Not only do iPhone owners download applications, stream music and videos and browse the Web at higher rates than the average smartphone user, but the average iPhone owner can also use 10 times the network capacity used by the average smartphone user. ‘They don’t even realize how much data they’re using,’ said Gene Munster, a senior securities analyst with Piper Jaffray.”

MacDailyNews Take: If other so-called “smartphones” are smart, then Apple’s iPhone is pure genius. The reason why Apple iPhone owners use their devices 10 times more is because Apple’s software allows and encourages them to do so.

Wortham continues, “The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand. Another result is outraged customers… More than 20 million other smartphone users are on the AT&T network, but other phones do not drain the network the way the nine million iPhones users do. Indeed, that is why the howls of protest are more numerous in the dense urban areas with higher concentrations of iPhone owners.”

“‘It’s almost worthless to try and get on 3G during peak times in those cities,’ Mr. Munster said, referring to the 3G network. ‘When too many users get in the area, the call drops.’ The problems seem particularly pronounced in New York and San Francisco, where Mr. Munster estimates AT&T’s network shoulders as much as 20 percent of all the iPhone users in the United States,” Wortham reports.

“AT&T’s right to be the exclusive carrier for iPhone in the United States has been a golden ticket for the wireless company. The average iPhone owner pays AT&T $2,000 during his two-year contract — roughly twice the amount of the average mobile phone customer,” Wortham reports. “But at the same time the iPhone has become an Achilles’ heel for the company.”

“AT&T says that the majority of the nearly $18 billion it will spend this year on its networks will be diverted into upgrades and expansions to meet the surging demands on the 3G network,” Wortham reports. “The company intends to erect an additional 2,100 cell towers to fill out patchy coverage, upgrade existing cell sites by adding fiber optic connectivity to deliver data faster and add other technology to provide stronger cell signals.”

As fast as AT&T wants to go, many cities require lengthy filing processes to erect new cell towers. Even after towers are installed, it can take several months for software upgrades to begin operating at faster speeds,” Wortham reports. “The company has also delayed bandwidth-heavy features like multimedia messaging, or text messages containing pictures, audio or video. It is also postponing “tethering,” which allows the iPhone to share its Internet connection with a computer, a standard feature on many rival smartphones. AT&T says it has no intention of capping how much data iPhone owners use.”

MacDailyNews Take: Steve Jobs is simply doing as he’s always done: Pushing forward.

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.


Direct link via YouTube here.

Wortham continues, “But AT&T faces another cost — to its reputation. AT&T’s deal with Apple is said to expire as early as next year, at which point other carriers in the United States would be able to sell the popular Apple phones. Indeed, a recent survey by Pricegrabber.com found that 34 percent of respondents pinpointed AT&T as the primary reason for not buying an iPhone. AT&T might be in the spotlight now, analysts say, but other carriers will face similar problems as they sell more smartphones, laptop cards and eventually tablets that encourage high data usage.”

Full article here.

[Thanks to MacDailyNews Reader “Citymark” for the heads up.]

35 Comments

  1. it would seem to me a good idea that if someone were to request a download of a program and someone near by has that program on their iPhone, instead of using cellular or wifi, it would be sensible to invisibly transfer the app from the neighboring iPhone via P2P through bluetooth then simply handle the financial transaction during the next app store access.

  2. MacTony- You’re fooling yourself if you think Verizon or another carrier (which right now with the current tech means it can only go to T Mobile in the US) can handle the demand for data that the iPhone is asking for.

    In short I’d love to see the iPhone on Verizon for one reason and one reason only, to see its oh so perfect, or so reliable network crumble like a house of cards. I can only assume (Verzon) because all I hear around hear is people blathering like Verizon is the second coming when in reality their business model means they are just another Dell.

    Lastly read Dan Eran’s article on RDM about the lessor of evils, got news for you… all cell carriers suck. Much like politics its a case of choice-less choices, but that is a another matter entirely.

  3. So for all of you expecting much better coverage and service on Verizon, wait until this data load hits their network and see what happens. According to this article, the amount of traffic of the nine million iPhones generate is equivalent to almost 100 million ordinary “smartphones” (and I don’t even know how many ordinary “dumb” phones, without the large screen and a browser).

    Does anyone here seriously believe Verizon’s network can handle five times as much smartphone traffic as it has today?

  4. I will say this. Apple works hard on every feature it puts into the iPhone. Which means the people who worked hard on MMS can’t even use the feature. Steve Jobs himself can’t send an MMS even though his phone is capable. History tells us this will not stand for long. I am willing to bet there are people at Apple researching what it would take for Apple to become a wireless provider. Apple would control the entire experience. You could sign up through iTunes again like the original iPhone.

    And if the rumored tablet is true with 3G network compatibility, it this it is even more of possibility….

  5. Dude – I’m afraid that you are right about a Apple-Verizon pact. It’s more hopeful thinking on my part. I’m not a big Verizon fan, but when I’m 3 miles off of the highway and everyone is walking around me talking on their cells and I have “no service’. It’s a big problem for AT&T;. I have never seen a survey that didn’t have Verizon ranked at or near the top and AT&T;at or near the bottom in almost every market across the US.

    As far as Verizon, it will take several years to rollout their new 4G across all of their markets. That means that cells will fall back onto the CDMA network. I think that Apple would build a CDMA phone if Verizon would step down from their high horse.

  6. BS: I Call BS!

    “‘It’s been a challenging year for us,’ said John Donovan, the chief technology officer of AT&T;. ‘Overnight we’re seeing a radical shift in how people are using their phones,’ he said. ‘There’s just no parallel for the demand.'””

    They act like this is a recent phenomenon! At&T;knew this within months of getting the ORIGINAL iphone out there over 3 years ago! Anytime you see some corporate dweeb being all apologetic about this “new” problem I urge you to stand up and call BULL$HIT. Of course with that said, none of the other carriers would be any better as others have alluded to. The apologies from at&t;is just so they can continue to drag their feet on millions of dollars of upgrades to infrastructure tat has gone essentially untouched since the inception of the brick phone (circa 1987).

  7. ATandT can solve their problem quite easily. They just have to do what Rogers did in Canada.

    Don’t offer unlimited downloads, no matter what the people want.

    6 GB for $30 per month is their best plan and they find that Canadian iPhone users only average 1.5 GB per month.

    No problems up here. Duh!

    Canadians are afraid to use their iPhones away from WiFi because of the horrendous overage charges.

  8. Verizon can handle the traffic better than AT&T;. I have never seen a survey that had AT&T;at the top. So, unless someone can show me how they “know” that Verizon cannot handle the extra data traffic. All you are doing is talking about something you know nothing about. Assuming Verizon is on schedule to start rolling out the new LTE network in 2010, they will be ahead of AT&T;.

    So, what do we know? Through surveys and personal knowledge, Verizon has much better 3G coverage area They are rolling out LTE before AT&T;. I find it strange that AT&T;is suppose to have a faster 3G network, but some real world tests show different.

    Verizon Leads, AT&T;Runs Last in Wired.com’s 3G Speed Test

    http://www.wired.com/gadgetlab/2009/07/3g-speed-test

    http://forums.macrumors.com/showthread.php?t=482409

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