Visionary CEO Steve Jobs’ big blind spot: Apple’s AT&T problem

Invisible Shield for Apple iPhone 4!“The Apple-AT&T partnership for the iPhone and iPad hasn’t gone exactly as well as planned,” Mike Schaffner writes for Forbes. “AT&T has stumbled more than once. Most recently, there have been problems with iPhone 4 order fulfillment, including indications that customers’ private data was exposed to other customers, iPad e-mail addresses were hacked and the on-going problem with dropped calls. Arguably, some of these problems resulted from the surge of demand when the iPhone 4 came out, but it shouldn’t have been unexpected, given the experience with prior product launches. Couple all of this with Verizon’s very effective ‘map’ ads, and it’s clear that AT&T is not in a good place right now in terms of marketplace perception.”

Schaffner writes, “In talking with iPhone owners, just about everyone seems to love the phone except for one aspect, the locked arrangement with AT&T. In my conversations, admittedly not a scientific sampling, the carrier is the thing people would most like to change about the iPhone. As real as all of these problems are, the constant media attention to yet another issue that further lowers the market perception of AT&T. And as we all know, perception can be as important as reality.”

Schaffner writes, “By limiting carrier choices, Apple has given competing products an easier entrance into the market. I believe that if Apple had not tied the iPhone to just one carrier, the iPhone’s market share could have been even higher and would have been that much more difficult to displace as competing products come out.”

“All of this is a life lesson for IT leaders. If at all possible don’t give up control of core components of your operations,” Schaffner writes. “If you must, as Apple had to because it’s not a network carrier, keep your options open and I’d strongly recommend shorter contracts with multiple providers, even if it costs a little more.”

Schaffner writes, “I’m sure Jobs and all the iPhone users would rather be talking about all the good aspects of the iPhone rather than the problems with the carrier. Letting your partner define you is a risky proposition. Let’s hope Apple ends all of this soon by giving us some better options.”

Full article here.

MacDailyNews Take: Even if he can’t, or won’t, see it, hopefully Mr. Jobs can at least hear it. The drumbeat grows stronger with each passing day.

For reference, please see Walt Mossberg’s review of Apple’s iPhone 4.


  1. As an iPhone user I’m completely satisfied with my AT&T;service. Coverage is great. I would like faster data service, but that’s in the works.

    As an Apple investor I am VERY excited about the iPhone and iPad becoming available on the different US carriers.

  2. We forget that just a few short years ago, the carriers were in control of the handset market and the iPhone changed that. I believe that still plays a role in today’s decision for the iPhone still being exclusive to AT&T;.

  3. I have no doubt Jobs knows very well exactly how serious the AT&T issue is.

    I’m also sure he knows exactly how he will deal with it when the time comes (sometime in 2012). My feeling is that we’ll get a T-Mobile iPhone, to relieve some pressure from AT&T.

  4. no – the iphone should stay with a GSM carrier like AT&T;like the rest of the world.

    it has helped that AT&T;has been the sole purveyor of Apple iPhone service in terms of feature set like visual voicemail etc.

    BTW, the constant complaining about AT&T;is annoying. There is nothing wrong with AT&T;. I switched from Verizon specifically to get the iPhone and I like AT&T;better. Their customer service is better, they do not have a stupid MADE UP name like “Verizon”, they are not owned by Vodaphone from Europe and they are not linked to the landline Verizon which is not well run at all.

    So there you have it. AT&T;is good for the iPhone and I for one hope they keep their monopoly in US. I do not miss Verizon at all and I live somewhere that supposedly has “spotty” coverage by AT&T;. Only spotty coverage and dropped calls I received were with, you guessed it, Verizon. Trust hurts.

  5. You can be sure Steve Jobs knows all about his AT&T;problems. And if he were all-powerful there would be no limitations to which carrier to use. But when the iPhone was in development Jobs was entering a game with set rules, bizarre rules. Jobs had to make a deal with the devil or not do a phone at all. Verizon, and others, wanted total control over the device and no iTunes, only Vcast or whatever they called it. Not only did AT&T;throw more money at Apple, they allowed Apple complete control over the functionality and promotion of the iPhone.

    You can also be sure Verizon and all the rest of them, are much more ready to deal now, and as the AT&T;contract runs out I expect to see the iPhone on other carriers.

  6. This carping is silly. Do you really think Steve Jobs who has masterminded Apple’s rise to it’s current position is unaware of the AT&T;experience? You don’t think they’ve sat in the R&D;labs doing everything they can think of to try and improve the connection to AT&T;’s network?

    Right now there’s a contract he has to honor but you can bet the same geniuses who came up with a better operating system, better music player, better phone, better pad….. are brainstorming and dreaming of what it would take to come up with a better network. Steve and Co. are not stupid.

  7. Give me a break! Like Verizon would be any better. The only advantage will be that IF Verizon gets the iPhone then enough whiners might move over and the lousy connections will impact both carriers, just not as much as with one carrier.

    Those that think if Apple had gone with Verizon and everything would be perfect now are idiots!

  8. I know one thing: I’m gonna laugh my butt off when the iPhone comes to the other companies like Verizon and everyone starts complaining about how “x telecom” sucks; about how badly things are implemented. It will truly be hilarious. AT&T;is not perfect. They have had their issues, but they also carry alot more traffic with the iPhone and the iPad on their networks than others do. Let’s just wait and see how Verizon, etc. networks perform when the data starts crushing their networks.

  9. This is what really worries me – all these people buying Android phones because they’re tied to their carriers are almost ALL thinking that the experience is just as good as the iPhone experience, the same way Windows users who haven’t tried Mac’s OS think Windows is just as good. Meanwhile they are tying their contacts, calendars, etc. to Google products instead of Apple’s. It will be an uphill battle to get them to switch, just as it would be to convince me to switch from my iPhone.

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