Why the iPhone will – forever and always – remain on the ATT network
As many have noticed, AT&T isn’t exactly providing iPhone users with a quality of service they could brag about. During WWDC, the groans in the audience came in loud and clear: MMS and tethering were announced as available features on the device, but weren’t supported by AT&T at the time of release of OS 3.0. In the San Francisco Bay area, making a call on the iPhone could turn into a constant game of “how fast can you hit the redial button?” Many have hoped that the end of the exclusivity contract with AT&T would put pressure on the company to not suck and become more competitive. Yet as much as we would all like to see AT&T lose the exclusive rights to the device in 2010 (when the contract is up for renegotiation), I don’t think the iPhone will be available on any other US carrier. Let’s explore.
To start off, let’s take a look at Apple’s options when it comes to carriers:
Sprint
Why will Sprint never carry the iPhone? That’s easy: not only does Sprint’s wireless network use CDMA (a completely different set of wireless technology than what AT&T uses), but the company’s future network plans include rolling out WiMax. It would not be wise for Apple to design a completely different phone for just one carrier. It would complicate logistics, support, and manufacturing. Apple would rather make one phone that can be sold (and used) worldwide, than to manufacture different models that cater to different wireless networks. Apple can also achieve a greater degree of economies of scale by manufacturing, distributing, and providing support for one worldwide model based on the GSM wireless standard. Yet even if Apple were to make a phone compatible with Sprint’s CDMA network, the wireless company has being on shaky ground lately: it has weathered two consecutive years of a negative operating income, is losing subscribers by the boatload, and has sold its physical towers to Ericsson, which essentially makes the third largest carrier in the U.S. an MVNO. All in all, a collaboration with Sprint would yield more risk than possible return for Apple. T-Mobile
T-Mobile is the smallest national carrier in the US. It is also the only other GSM carrier in the country. Unlike an iPhone for Sprint, making the device available on the T-Mobile network would seem easy enough: just put in a T-Mobile SIM card and off you go, right? Not so fast: T-Mobile operates its 3G data network on the 1700MHz spectrum. No other carrier in the world does this, AT&T included. I have seen rumors on the interwebs about the iPhone wireless chip having the ability to operate on this band, but there is nothing official from Apple confirming this. Even though Apple could make the iPhone available to T-Mobile customers as the device exists right now, users will not be able to take advantage of the 3G network, which would essentially defeat the 3G in the name. I don’t believe that Apple would allow their “twice as fast” phone to operate at 2G speeds.
Verizon
Of the big four US carriers, Verizon Wireless (VZW) has the most subscribers. Like Sprint, the company operates on the CDMA network, but is expected to make the switch to LTE for its new 4G network. On the surface, many are excited about the possibilities. I think there is more here than meets the eye.
Apple approached VZW about carrying the iPhone before it shopped it to AT&T. Verizon and Apple had a falling-out due to control and revenue sharing: Apple wanted full control of the phone and the content that could be placed on it; Verizon wanted the same. While exact details of talks aren’t known, it’s obvious the two companies didn’t come to an agreement. But one thing is for sure: if Steve Jobs was offended during negotiations, you can guarantee there will be no iPhone on Verizon in the near future. Remember when ATI leaked certain details about the Mac Pro ahead of Apple announcing it? Now take a look at how many ATI video cards are available in the Mac lineup today (hint: only one in the entire Mac family). Even if egos were to subside long enough for the device to come to big red, I don’t think the network infrastructure would support it.
From a technological perspective, Verizon plans to upgrade to the LTE standard as part of the company’s migration to 4G wireless technologies. LTE (Long Term Evolution) has been given the 4G moniker and has been adopted by almost all carriers globally as the successor to current 3G networks (CDMA and GSM/UMTS). Eventually, most carriers worldwide are expected to use LTE, making the aforementioned network incompatibily with Verizon (or even Sprint) a non-starter. Verizon plans to begin the launch its LTE network this year and that’s where we begin to run into problems. Namely, the actual rollout. A network launch is a huge undertaking and takes time to be completed on a national scale. Every cellular network roll-out works essentially the same way: the new network is launched in big metro areas in the first two years. And only after three to four year after the initial roll out is the new network truly nationwide and ready to be used by all subscribers. That’s the best-case scenario: today, there are parts of the United States where GSM is a relative newcomer. This means that in the near future, our potential Verizonized iPhone would have to fall back on the CDMA network. As with the Sprint scenario, I don’t know that Apple would be willing produce a device with a completely different chip on board, all just for one carrier (citing my earlier concerns regarding logistics, support, and manufacturing as they all relate to economies of scale).
Let’s imagine that these two technological barriers were to somehow disappear. We would still be left with Verizon playing nice with Apple and making up what was lost during iPhone negotiations. If there were a company that would have nearly as big an ego as Apple, it would be Verizon. The evidence is in its phone line, in which all phones strive to have the have the exact horrific UI. I know this doesn’t apply to its smart phones, but it is evidence of the tight grip Verizon likes to have on its products. Interestingly enough, Apple is the same way: control is uber-important for it. A recent post at Engadget shows something that Apple would never agree to: a completely new app store, just for Verizon phones. An Apple-Verizon partnership would be like throwing two carnivorous animals into a cage with one piece of meat.
Aftermath
So as much as the tech community loves to hate AT&T, it seems that we are just going to have to get used to it. Apple even threw a jab the carrier’s way during WWDC, when it mentioned that MMS and tethering are available “if your carrier supports it.” One has to wonder how much Apple knows (and cares) about the frustration of the average iPhone user with AT&T. I’m sure that satisfaction would be much higher if the carrier could deliver a better network infrastructure. And with recent murmors that the FCC is investigating manufacturer-carrier exclusivity contracts, one has to wonder if such business deals will be able to stand up to legal tests. The only hope of the iPhone being available on other carriers (besides AT&T) is Apple being willing to invest in a CDMA version of the device (wireless radios, manufacturing, parts acquisition, distribution, and support). From what we know about Apple, having two versions goes against its corporate policy of having a device that just works, and works everywhere. I sincerely hope I am wrong, but I do not believe that there is enough evidence to show that the iPhone is going anywhere other than AT&T any time soon.
20. July 2009 at 11:35 am :
R: @thealexluft: Why the iPhone will – forever and always – remain on the ATT network http://bit.ly/wXYrs
This comment was originally posted on Twitter
20. July 2009 at 4:59 pm :
I didn't realize what all the fuss about AT&T was until I switched from Verizon for the obvious reason. I can tell you that I never dropped a call on Verizon for the four years I was with them with the exception of physically moving out of the service area. AT&T is quite the opposite story, especially on the jam packed UCF campus mid-day. Verizon has a better network, and CDMA is a far superior technology.
But I will also add that Verizon is extremely proprietary. They literally have the same OS on all of their non-smartphones, independent of their manufacture. Their apps, of which most charge a monthly fee, surprisingly work on almost all handsets old and new, also independent of manufacture. However, on their smartphones running windows mobile and palm, I'm pretty sure that app distribution and support is out of their hands. I'll bet they would let the iPhone slide on the same exception.
We'll see what happens when all the 4G commotion settles and the iPhone becomes more technologically feasible to move in. Money talks man, and the iPhone represents a boat load. If Apple reconsiders Verizon, I think they'll bite.
20. July 2009 at 12:04 pm :
interesting read RT @thealexluft: Why the iPhone will – forever and always – remain on the ATT network http://bit.ly/wXYrs
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20. July 2009 at 12:31 pm :
TechNest Report – Why the iPhone will – forever and always – remain on the ATT network http://ow.ly/15IhkI
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20. July 2009 at 4:51 pm :
Why the iPhone will – forever and always – remain on the ATT … http://bit.ly/1alcAp
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21. July 2009 at 5:04 pm :
Agreed! By making all the apps run across all its devices, Verizon designs for the lowest common denominator, thus decreasing functionality. If one phone is far superior (and has an acceleromenter, for example) and another phone is a basic candy bar with no acceleromenter, running the same app on it would not take advantage of the superior hardware of the first phone. It's business, for sure, and iPhone is business squared!
I've had very few problems with AT&T and overall I'm extremely satisfied! You have had a totally different experience. Who is to say that we wouldn't have the same experience with Verizon (you might have excellent service, I might not)? As for CDMA being a far superior technology, I don't know. I'm not an engineer, nor do I play one in the movies
What I do know is that GSM is the most prevalent wireless standard by far world wide (have fun using a CDMA phone overseas) and that LTE is based on GSM. Verizon and AT&T have announced that they will be adopting LTE as their 4G service. This means that, in essence, Verizon is moving away from CDMA and will need to rebuild their entire network! So there has to be something in CDMA that they don't like.
Another thing I detest about the implementation of CDMA in the US is the inability to input SIM cards into phones. You can't just swap your phones whenever you want to with the US CDMA implementation. You have to either go to the store and have them "program" it for you, or do the online activation thing. What a royal pain in the ar$e.
21. July 2009 at 3:05 pm :
AT&T iPhone is here to stay. http://bit.ly/wXYrs
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21. July 2009 at 3:44 pm :
well, read yet another article (http://bit.ly/wXYrs) and can definitely see the authors point. come on AT&T what is the problem? step it up!
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21. July 2009 at 9:27 pm :
Very interesting article for iPhone lovers who don’t like their service provider: http://bit.ly/lhrAt
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22. July 2009 at 7:36 am :
CDMA is a far superior wireless technology. GSM 3G is base solely on CDMA2000. The reason Verizon is moving to LTE is because VODAFONE (parent company) is a GSM base carrier over sea. Any carrier moving to 4G have to overhaul the entire network from the ground up. There is no exception if you're CDMA base or GSM base.
I agree that Apple will stay with ATT for another 5 years since building a new network will take several years to complete. Apple may consider having dual chipset similar to what RIM is doing, but that all boils down to the all mighty $$$.
22. July 2009 at 5:32 pm :
CDMA and GSM (now WCDMA) are almost the same. One is not inherently better than the other. What does matter is the network implimentation. AT&T is having problems because of their ability to handle the data that the users want, the size of their 3g roll out, and the hand off between GSM and WCDMA. The dual chipset would be expensive to implement in all of the iPhones, especially in countries where CDMA doesn't exist. Apple just doesn't make one item different for just one country. They are about the smallest number of skus possible.
31. July 2009 at 5:26 pm :
Lean and efficient – the way any business should be! I agree that tecnologically, I don't think there is a inferior/superior difference between CDMA and GSM. What matter, like you wrote, is implementation. For some reason, I am extremely happy with AT&T service. I haven't had one dropped call yet since I've purchased the 3G S. Web browsing and the connection to the internet are superb – reliable and fast: I couldn't be happier. I'll be writing a post about this!!! LEAVE AT&T ALONE
31. July 2009 at 5:27 pm :
Lean and efficient – the way any business should be! I agree that technologically, I don't think there is a inferior/superior difference between CDMA and GSM. What matter, like you wrote, is implementation. For some reason, I am extremely happy with AT&T service. I haven't had one dropped call yet since I've purchased the 3G S. Web browsing and the connection to the internet are superb – reliable and fast: I couldn't be happier. I'll be writing a post about this!!! LEAVE AT&T ALONE
1. August 2009 at 7:36 pm :
Why the iPhone will – forever and always – remain on the ATT network TNR http://bit.ly/189mGD Taking advantage of trending topics
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2. August 2009 at 11:38 am :
http://bit.ly/189mGD This is what happens when people are afraid of technology.
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18. September 2009 at 5:36 am :
CDMA has always been a good standard for calls, but it just can't keep up with data services as GSM/HSDPA does, and THAT's what will generate revenue in the long term. Voice calls are like a commodity now; you've got all-you-can-eat for a flat fee plans and there's even no nationwide roaming fees, so EvDO is keeping short at this rally..
For instance, you've got Chile, this southamerican county once had three standards: TDMA, GSM and CDMA.
TDMA was the first to disappear for obvious reasons migrating it's service to GSM, and CDMA did the same towards GSM. All data is handled via 3G HSDPA with downlink speeds up to 2mbps and uplink to an embarrasing 256kbps.
EvDO was never commercialy available.. and it was dropped at a later time.
18. September 2009 at 12:27 pm :
Christian,
Your completely right in that data services are the future and voice calls have become a commodity. Although we currently do have all-you-can-eat data as well (but in reality it's capped).
I find it great that finally we're moving to a single standard for wireless technologies – LTE. But then we also have WiMax… How long do you think it is until we are making calls via VOIP on our cell phones?
- Alex
1. June 2010 at 1:10 pm :
Il est enfin temps que Skype iclue la 3G pour l iPhone.