AT&T and Apple: A marriage made in hell

“AT&T’s epic iPhone 4 pre-order snafu on Tuesday was the latest in a long line of headaches the carrier has caused Apple. But even with concerns that AT&T accidentally revealed some subscribers’ account information to other customers during Tuesday’s fiasco, it’s unlikely that Apple will suffer much fallout from its latest carrier crisis,” David Goldman reports for CNNMoney.com. “Apple’s public comments about AT&T have largely been positive, often focusing on the substantial monetary investment that AT&T has put into improving its network. But behind the scenes, experts believe Apple is irate.”

Goldman reports, “‘It’s a hard position for Steve Jobs to be in because AT&T and Apple remain partners, so he can’t be too outspoken in the press,’ said Carolina Milanesi, research director at Gartner. ‘But AT&T has limited the iPhone experience.'”

“Many mobile analysts believe that a Verizon iPhone is coming soon, perhaps as early as this fall. Meanwhile, Steve Jobs & Co., who have built their company’s reputation on devices with an unparalelled user experience, have to continue their fractured relationship with AT&T — which has made iPhone customers’ experience less than stellar,” Goldman reports. “‘The frustration that consumers and our clients have towards AT&T is incredible, and this is just another thing to add to the list,’ Milanesi said. ‘Apple must be getting to the point where it is thinking, ‘Enough is enough.””

Goldman reports, “Apple said it sold 600,000 iPhones on Tuesday, vastly outpacing its sales of earlier models. The deluge was 10 times as many orders as AT&T fielded this time last year for the iPhone 3GS, and the company shut down sales Wednesday because it’s already run out of inventory. Pre-orders, which had initially been scheduled for June 24 delivery, are now only guaranteed to arrive by July 14.”

“Though all of that should be good news for Apple, it was far from sunshine and roses on Tuesday. AT&T couldn’t handle the stampede of pre-orders, and online and over-the-phone ordering returned frustrating error messages and busy signals,” Goldman reports. “Many early-bird customers who showed up at retail stores had their information taken down on paper, which AT&T entered into the system manually after the systems were back online… While Apple apologized Wednesday for the pre-order problems, no one at AT&T has uttered the words ‘we’re sorry.'”

Full article here.

MacDailyNews Take: Time for the divorce, Steve. See other people. Play the field.

And, to you faux-pro-AT&T viral whitewashers with your canned “whiner” and “crybaby” talking points: Don’t bother. We can trace IP addresses back to viral marketing firms with the best of them. Your astroturfing attempts will be deleted and your IP addresses will be blocked.

Note to AT&T: Astroturfing is no substitute for infrastructure investment.

80 Comments

  1. “Behind the scenes Apple is irate”

    Apple is actually more than irate. They are collecting all customer complaints and investigating every detail. That will be how ATT loses exclusivity before the initially agreed to time period.

  2. During the fiasco, I managed to reserve an iP4 for pickup at the Apple store on 6/24, and I bought two phones via Apple’s website, accidentally (well, one was the result of a reported error, subsequently reported as actually having been purchased by email). One of the two will arrive on 6/24, the 2nd will ship on 7/2. I heard today that ship times are now delayed to 8/14. I only need one of these phones. My question to all of you is, should I go ahead and receive the 2nd that I bought online, and go pick up the reserved phone at the store, and try to sell the extra2, or does it not work that way?

  3. I’ve been posting here for a long time and is a registered MDN user. Your ATT bashing as of late has been unlike you and without thought. So Apple should divorce ATT and go exactly where? T-Mobile with it’s antiquated GSM network or Verizon and sprint with it’s CDMA or whatever mobile platform they use. Are you going to pay for re-tooling to do this. This is just childish on your part MDN and you know it. Apple and ATT sold all that they could deliver on the 24th yesterday. 600,000 worth of it and you still find a problem with the company who took a chance with Apple’s first iPhone when no one else wanted to. Was it tough yesterday, yes. However it does not warrant your take.

  4. i walked into a best buy and pre-ordered one. only took about 10 minutes, with no line. the transaction was all on paper. i’m a bit weary as to whether or not i’ll actually get one, but they said they will call me to schedule a pick-up appointment on the 24th. i just read that best buy is no longer taking pre-orders. *crossing fingers*

  5. I wonder, can any website handle that load of traffic? I mean with ATT, the updating iphone user is not only accessing for the phone then the server for all secure information. And new customers. all at once.

    All for the same product. Honestly could an Amazon even handle that? I don’t know I’m asking. If the answer is yes Amazon could, then ATT has really serious issues and is incompetent.

  6. Placing my order yesterday was pretty brutal. I finally got through but the whole experience seemed pretty amateurish. Still, I’m going to hold fire for now. My experience with ATT (NYC, San Francisco, Europe), has gotten much better over time. My experience with Verizon here in southern Connecticut and Princeton, New Jersey has been poor.
    We’ll see how this plays out over time.

  7. @Mac4life
    To correct you, both AT&T;and T-Mobile use HSPA and GSM. The former being a wide standard in Europe. Also where T-Mobile is based, Germany. Little do you realize, that the EU and England get to enjoy carrier choice. Unlike we Amercans. Don’t you wish you had a choice? Or should I label you an AT&T;fanboy/shill?

  8. No matter what is said here, without AT&T agreeing to Apple’s original terms, the iPhone would not be the humongous hit it is today.

    So, even though we’re seeing a marriage counselor and talking to Divorce Attorneys, it was not “A marriage made in hell”.

  9. Mac4lfe is exactly right. Apple should divorce AT&T;and go with …. who?

    The only other GSM carrier in the US is Tmobile, and they’re a joke. And that is really the only option, since there isn’t a CDMA iPhone (yet).

    Did AT&T;have technical issues yesterday? Definitely, but so did Deutsche Telekom. MDN isn’t ripping the Germain carrier a new hole.

    Is AT&T;’s exclusive lock on the iPhone holding back Apple’s market share in the US. Yes. But, AT&T;deserves the money they’ve made off it for betting on Apple 3 years ago. Verizon wasn’t willing to take that bet.

    AT&T;’s early iPhone upgrade promotion does give me the feeling we will see the iPhone on more US carriers in 2010, so that will definitely improve Apple’s market share. But, AT&T;will definitely be an important carrier for Apple for years to come.

    Thank you AT&T;for letting Apple bring us the phone Steve Jobs wanted to!

  10. [We can trace IP addresses back to viral marketing firms with the best of them. Your astroturfing attempts will be deleted and your IP addresses will be blocked.]

    Actually. Post them. Each astroturfing occurance. Each IP that gets used.

    In fact, add a ‘Wall of Shame’ to your top menu — next to ‘opinions’.

    Note to AT&T;, Rogers, etal. : Astroturfing is no substitute for infrastructure investment.

  11. That’s the wrong way to look at it, MDN. Apple expanding their number of US carrier partners wouldn’t be a divorce; the iPhone should remain an ATT handset.

    It’s simply time for Steve and ATT to become swingers. The marriage would live on.

  12. So…the crap is finally overflowing the can?

    Lots of comments…but all missing a long term view.

    Where are all the owners of the new RF spectrum auctions of a couple years ago hiding out?

    When is Apple going to set up its own iMobile network?

    That would let them use their data centers, and the new dark fiber backbone network being put in place now by an independent company, the ip6 protocols and the new RF spectrum to offer an “Apple Class” experience for iPhone, iPad, iPodTouch, MacBooks, etc.

    There has to be a good use for $40 Billion in cash and this sounds like a monster opportunity. I would move in the flick of a switch.

  13. Once again consumers in the USA are suffering from the failure of carriers to embrace the global standards of GSM and HSPA. Rather than competing on service while allowing full interoperability with competitors’ and international networks, US carriers opted to try to build out the competition with the result being that there is really only viable carrier in the States that uses the global standard.

    Almost everywhere else this is not an issue and it’s a shame that iPhone users all around the world are enjoying competitive plans and all the options such as tethering and possibly including FaceTime calls over 3G while US customers suffer because the regulators did not put the consumer first and allowed such a disjointed mishmash of networks to be created, which has not enhanced competition in a free market but has held it backhand prevented it from joining in on the latest innovations in cell phone technology.

  14. Mac4lfe and Vatdoro are right, AT&T;took a chance that no other network would and they are overwhelmed, nobody excepted this kind of success, not even the biggest Apple fans, do you agree?

  15. Time for Apple to pay A T & amp ; T’s early termination fee and get other phone companies on board.

    Lets get everyone on other carriers so I can have A T & amp ; T all to myself. ” width=”19″ height=”19″ alt=”cheese” style=”border:0;” />

  16. Apple’s a hardware company; they don’t want to be a service company also. I don’t think people realize how much money is actually involved in setting up infrastructure.

    So you petition city planners about putting up your new towers… that takes years, that is if you don’t get stonewalled. But then you still need access to data and running your own fiber is out of the question you so have to lease. And that who ends up being the big players anyway. So you’re back to “pick a carrier.”

    People complain about at&t;now… go with iMobile or whatever Apple calls it and you’ll have 10% coverage at best. Apple would be better off buying TMo or Sprint. But again, infrastructure is really not Apple’s business.

  17. I really can’t believe that you guys over there in big important America are still stuck with just one carrier. How did that happen?
    Here in little backwards England iPhone owners get to choose to do business with lots of carriers.

  18. Apple needs a world-class carrier partner.

    What they got was ATT.

    Now ATT’s GSM network may be world standard. However their service and coverage is not.

    (I for one never bought the “Verizon turned Apple down” story. Apple doing CDMA in the USA and GSM everywhere else. No way.)

  19. What is all this garbage about AT&T;taking a chance? Anyone remember the cost to the consumer of the very first iPhone? Not much subsidy existed there at all (I don’t believe there was any!). AT&T;may have taken a “risk” – but it wasn’t much of one with consumers footing the bill for the entire phone AND then locking in to a 2 year agreement. Give me a break on all the “risk” talk, please.

  20. How is everyone so certain that the train wreck that happened is entirely AT&T;’s fault? I was trying to get my order placed (I eventually did) on Apple’s site and it gave me errors mostly during the order placing process, long after I’d been approved in the first step. Although I did have to try several times to get thru that step, once I did it was more painful to get the Apple Store online to follow through and give me a confirmation which took about 3 hours. So, I ask again… What role did AT&T;play in that experience? From what I can see, this was an issue of an overwhelming demand that even Apple didn’t see coming! In the end it was a success and Apple is selling every phone it has available and will continue to sell this new iPhone out for at least a month or more!

  21. Time to divorce Apple, too. Jobs has run that company like a paranoid dictator. His actions actually stifle the company’s growth capability. Unheard of profit margins for a computer company which inhibits expansion because of overpriced products.

    One reason for this clusterfark lies directly with Jobs. Because of the leak of “stolen” iPhone, Jobs chose to release early. Not only was the low supply of available product of Apple’s habit, but the early release left ATT and APPLE unprepared to process an obviously limited amount of orders.

    Blame ATT all you want. In my case they are a big part of my decision to leave Apple. But it is Jobs’ arrogance and continued disregard for average consumers outside his crowd of Beemer-Buddies that has finally made me file for divorce from Apple.

  22. @ Handsome Smitty,

    Don’t let the door hit you on the ass on your way to the shitter.

    Spouting the competition’s talking points won’t win you much sympathy around here.

  23. I’m living in Japan so I can’t really comment on AT&T;’s mobile service. However, I will comment on people’s blasting AT&T;about the pre-order problems. TEN TIMES! Does anyone read? I don’t think ANY company could be prepared for a TEN TIMES increase in requests! 600,000 phones pre-ordered/sold in ONE day! What other computer/consumer electronics device can draw like this? As others have said, “this is not bad problem”!

  24. @ knowhowe

    It’s really simple, knowhowe. The iPhone here in the US, in England, Spain, Germany, Japan, Australia…and everywhere else might never have happened if Jobs and ATT had not entered into their “strategic marriage” that included exclusivity for what most believe was a 5 year period. Is it possible that you’ve forgotten that the hardware manufacturer/network carrier relationship was totally redefined by Apple with the iPhone? Verizon and others wouldn’t play ball with Apple. Only ATT – for all their faults as a carrier – had the vision and balls (and maybe desperation) to run with Steve Job’s gamble. It was only because of the success of the iPhone in America that Apple didn’t have to make horrible exclusive arrangements with carriers in other countries (did at first, but not long term). Best guess is that we’ve got about one more year of exclusivity with ATT here in America. After that, and when carriers all switch to compatible 4G technology, we’ll see the iPhone on most carriers I suspect and hope.

  25. AT&T;should of know this traffic was coming. They offered more than half of all current iphone users in the US the opportunity to upgrade to the iPhone 4 for free.

    It’s time for the iPhone to make it onto other networks in the USA.

  26. This is a ridiculous article and response from MDN: I tried for hours to order online from Apple online and was not able to do so until about 5pm PT-I kept getting error messages; it took me abou 20 attempts. Apple had just as many problems as ATT. The volume of orders is astounding by any measure. Big whoop that it took some effort on my part to be a first day buyer. PLUS, on top of that, I am indeed a very satisfied ATT customer-I switched from Verizon 2 years ago when I got the 3g.

  27. MDN has been pretty hard on AT&T;and while I agree that no other carrier can do any better, I think what MDN is pressing for is competition in the iPhone space to prod AT&T;to do better and not just rest on the laurels of having taken that initial gamble with the iPhone. Even if a twerp network like T-Mobile had the iPhone, AT&T;would have to work a little harder to earn new iPhone customers instead of just taking them for granted (not granite).

    I live in an area where AT&T;does pretty well. I have a few dropped calls at a few consistent spots (definitely more than my Verizon friends), but I get blazing fast internet and good coverage.

    I agree with MDN that AT&T;may not be doing everything they can to support the iPhone, but then again, maybe they are and all they can do can’t keep up with the burgeoning customer base.

    I’m just so happy that my life is good enough that I can gripe about a few dropped calls and spending about 3 hours pre-ordering the universes coolest phone.

    Thanks Apple… and AT&T;.

  28. I have been mostly satisfied with my ATT coverage and support.
    I DO wish their 3G would cover more areas.

    I have a Verizon company phone. Plenty of problems with it and the system.

    My only reasons to want the iPhone on Verizon are to relieve some of the load for ATT and to show that Verizon is no better.

    Or maybe T-Mobile….

  29. ATT and Apple sold every iPhone 4 that was available for sale, what more could they do?

    Selling a record number of products on the relate date – absolutely amazing. Great for Apple & ATT.

    A marriage made in heaven if you ask me.

  30. OMG. if anybody really thinks verizon would have done any better with the prelaunch fiasco, they have their heads up their asses. This is simply a server capacity issue. Get over it already.

  31. Handsome Smitty:

    Idiots like you have been calling Jobs arrogant, since his appearance on the scene. Most Apple and Mac users from its inception actually know exactly that his arrogance is only in the eyes of morons who think that are legends in their own minds but shrivels in their pants and couldn’t run a 100 mile dash let alone a marathon.

    Steve Jobs created Apple and then had to recreate it after it died without his vision and direction, with his high standards and vision. If not for his strictness, which deadbeats and sissies despise, his attention to detail and his understanding of how to make great products and keep users satisfied and excited (as apposed to wankers that know how to twiddle a thumb and a mouse and of course how to ” google”…) Apple would never be the great team of like minded people that he chose and cultivated and molded into a top notch team and company. Now if you got anything else to talk shit about, just go stick it up molehead’s ass and get a brown tongue.

  32. T-Mobile is much better than AT&T in my southwestern Minneapolis suburb.

    If Apple needs something to do with the extra 40B, here you go: Markets cap; VZ 82.48B, AT&T;150.80B, Sprint 14.28B.

  33. @knowhowe

    If getting multiple carriers meant having to move to England, I’ll stick with our single carrier.

    Wouldn’t want to live in that totalitarian nanny state you people call a country.

  34. Of course all the mobile carriers suck! The point is that if two or three carriers are supporting the iPhone, no one carrier has to carry the entire load. AT&T;has made it painfully obvious to a shitload of people that they absolutely cannot carry the entire load by themselves.

  35. Hey Apple!… It’s time!… It’s time to make a switch to the Verizon crowd! I was a Verizon customer before I switched to the iPhone. I didn’t switch because it was AT&T;, I switched because I fell in love with my Mac and consequently, then the 2G iPhone and now the 3G iPhone. However, I am not getting the iPhone 4 until this device is running on Verizon’s network. Although I love the new features, it’s simply not enough for me to go out and buy a new iPhone.

  36. Well, you did it MDN. You censored my very benign email in response to the astroturfing comment in your “MDN Take.”

    Your juvenile behavior with respect to AT&T appears very similar to behavior you have condemned in the past when people ranted against Apple for eliminating (or not providing) some interface port or function.

    While I am no fan of AT&T, I do not recall having seen any data on AT&T infrastructure investment on this site. I understand that AT&T pulls in a lot of revenue from the iPhone. But much of that heads right back out to cover salaries and benefits, system maintenance and overhead, handset subsidies, and other expenses, including R&D;and infrastructure investment. Eventually some of that (hopefully for the company management) makes it through to be counted as profit for the shareholders. Are you claiming that AT&T is underspending on infrastructure investment? If so, show the numbers. Or are you claiming that they are spending a reasonable amount, but are incompetent and not achieving the functional improvements one would expect from such an investment.

    Or, is it possible, that the growth in mobile data traffic due primarily to the iPhone (and, now, the iPad) has been so massive that any U.S. carrier would buckle somewhat under the load. I seem to recall that several past MDN Takes have stated that Verizon would not fare well under the iPhone load.

    Let me make it clear – I am in favor of Apple ending the exclusivity agreement with AT&T as soon as possible. But MDN appears to have jumped on the <censored word> bandwagon. Take a breath and relax.

  37. Guys, just because someone is happy with their ATT service doesn’t mean they are a shill for the company or a marketing firm. I’m not, and I’m really happy with my iPhone’s service.

    To be honest, outside of Pittsburgh the ATT network has been improving rapidly over the last three years. I rarely if ever drop a call, and its odd to be anywhere where there isn’t full coverage.

    I still have a Verizon Blackberry for work and it’s almost the complete opposite experience for me. Not every area is the same guys. I realize that NYC has it’s issues, but for me it’s not the case, and it’s not the case for the majority of customers. This is getting childish.

    go ahead and “trace my IP” and you’ll find that i’m posting this from my MBP at home.

  38. As a shareholder, it is very disturbing. It’s time to take on android aggressively now.

    I’d also like to see Apple expand it’s manufacturing capabilities. The long delays for iPad and now iPhone 4 are a concern.

    It’s hard to sell to the “good enough” crowd when the options are in their hands, but those are sales opportunities that disappear, because they most certainly won’t wait for weeks to get the goods.

  39. I’m just a guy in Santa Cruz. But I have 5 Bars at home and really have never had many problems with AT&T;at all. Their customer service has always been top notch and if I had a choice I would stick with AT&T;. I wouldn’t want a CDMA iPhone. To me, that would be going backwards technologically.

    I’m not a spammer for AT&T;so please don’t block me. I really like your site. I don’t understand why you are so anti AT&T;MDN. I’ve gotten great service from them these past 2 years since I left Verizon to get an iPhone. And that includes while I was in New York City.

  40. Verizon’s network will fare no better than AT&T;’s network under the weight of iPhone. I would argue it will likely be worse, big gaps in data coverage, no edge to fall back on. I personally cannot wait to see it happen. I had a Treo with Verizon when the iPhone came out and everything about my service improved when I switched to AT&T;, I hated Verizon..

  41. To review the full cast of characters:

    • ATT is the brain-damaged wife,
    • Google is the drunken, b-list, coke-whore ex,
    • Microsoft is the fat mean chick with a trust fund.

  42. My post got deleted. Hmmmph. Well that seems to confirm that… MDN’s panties are all in a wad because they didn’t get their iPhone 4 successfully ordered. God forbid someone on here actually be open-minded about the whole matter.

  43. There it is again that stupid Verizon rumor… God i swear I will kill the guy that keeps coming up with thiese stupid rumors… Fucking stop it already. This rumor has existed since the iPhone came to be and it has never been realized. I think that ppl keep this rumor alive because they have been wrong for so long they think they eventually will be right and FINALLY can say – I told you so. Even if it takes them 10 years to get there… Incredible…

  44. And, to you faux-pro-AT&T;viral whitewashers with your canned “whiner” and “crybaby” talking points: Don’t bother. We can trace IP addresses back to viral marketing firms with the best of them. Your astroturfing attempts will be deleted and your IP addresses will be blocked.
    -MDN- arent you the little fascist website threatening to block peoples IP address if they disagree with you. I was one of those used the “whiner” and “crybaby” labels, because, well.. that is exactly what all of you are. And no, I am not with a “viral marketing firm” as you can see by my IP address. I just hope that next time Apple decides to only sell the iPhone on Amazon, since this is the only place most of you think can handle the load, and then only give a promised ship date of “it will get there when it gets there”. Again, it is so ridiculous to see people whining that they didn’t get their iPhone day 1. Waaa f@#ckin waaaah. ITS JUST A FREAKING PHONE!!!!!!!!!

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