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.

61 Comments

  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.

  10. Listen up, tech bozos and haters: Apple has a CONTRACT with AT&T;Unlike other asshats (I’m looking at you, Google), niether Jobs nor Apple will publicly slag an important partner like AT&T;. Need it be stated again that AT&T;took a chance on the iPhone and agreed to terms NO OTHER telco has agreed to to date? When Apple fufills it’s commitment, the iPhone will either appear on the carriers or go unlocked. Until then, I’m glad I live in Canada.

  11. Again and again, these ATT-bashing articles are followed by reader comments who overwhelmingly voice their satisfaction with ATT. I think there’s a huge disconnect between the tech media and everyday users (again).

    After using Verizon, TMobile, and Sprint, my experience with ATT and the iPhone have by far been the best since I bought my first cell phone some 14 years ago. I couldn’t be happier with ATT, both in terms of customer service and in terms of network quality.

    I think the American tech media (Walt Mossberg and MDN included) should move to Canada, where they can sign on with Rogers and be happy with their network coverage and service!

  12. If the demand for the iPhone cause the government to rule phone exclusivity deals unlawful, then Jobs will have prompted another *Visionary* outcome. It is not up to Jobs to break the law or his word.

    The supply side and network capacity for other carriers have to be worked out too before Apple will even publicly try anything. It is not good customer service if you have to wait 2 months if you order an iPhone from Verizon or the local V network gets bottled up too by all the new iPhone users.

    Apple is not desperate to make any premature moves.

  13. VERIZON TURNED DOWN THE IPHONE!!!!!

    Hello!

    Maybe, as the drumbeat grows loader, maybe note that first.

    Verizon dumped IPhone.
    ATT accepted it and started to work with Apple.
    iPhone grew beyond any expect limits; both sales, market share, and data consumption.
    ATT grow over 7000 percent, Verizon unto 1000 percent.

    How would Verizon have handled it? Who knows!

    So, Steve Jobs was given a chance with ATT and Verizon would have crushed innovation.

    Thumbs up for ATT- We have all the iP1 to iP4 because of their risk taking. If you do not like it- fine. But note the facts!

  14. I agree with most of the comments here. I love MDN but it’s a really shame that they seem insistent on carrying the water of the irrational iPhones haters in regard to AT&T;.

    We all know AT&T;has problems but the problems are *not* anything that any other carrier wouldn’t have with the massive amount of data iPhone user suck down. To sum up:

    1. Verizon (and everyone else) had a crack at the iPhone. They wouldn’t give Apple the control needed to make the iPhone what it is now. AT&T;deserves credit for being willing to do that when no one else would.

    2. The very *idea* of not being able to access the web while I talk sounds barbaric and backward to me now. No way on Earth I’d ever accept that.

    3. Again and for as many times as it takes to get it through people’s heads: no one’s network would have fared *any* better under the data demands iPhone users make. You are just looking for a reason to bash AT&T;if you seriously suggest otherwise.

  15. Thumbs up for NCG598.

    To all the other anti-ATT critics: Before you comment on a technology issue, it is best you know something about the technology.

    One last time for the hard of hearing: CDMA cannot support the iPhone. Period.

  16. AT&T;stepped up to the plate and allowed Apple to revolutionize the cell phone industry. Steve Jobs is simply honoring the commitment Apple made to AT&T;.

    I’m sick of hearing about how good Verizon and all the other carriers are. AT&T;has assisted the development of the iPhone. NO OTHER CARRIER has. Why should Verizon be rewarded for saying NO to Apple?

    I may switch to another carrier to try them on for size but we should still respect AT&T;for their assistance and commitment to Apple.

  17. Until someone can prove to me that Verizon or anyone else can make a better experience then AT&T;, I’m not about to jump on this wagon. Yes, the dropped calls suck but that is only one part of these amazing devices.
    What would the cry be if they did open it up to Verizon and people have a worse experience with their network? The two networks are different. It’s easy to say take it to Verizon but most people commenting hear don’t have a clue about the differences and what is necessary to pull it off.

    Steve will do whats best for the users and Apple. Why would you turn on a business partner that has spent billions just for your product. As MS how their partners like them now? Play-fer-shit.

    The comments are getting harsh and I’m not sure it’s deserved if you consider all the facts.

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