[brownreese]

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That's funny, I was very happy that Cingular (AT&T) got the contract. I would have been very dissapointed had Verizon, which I absolutely hate, or one of the smaller companies had gotten it.

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Verizon has much better voice coverage and a much faster data network. I would prefer Sprint personally, but they have the best coverage here. T-Mobile would have been good. Which is my point. You prefer one carrier, I prefer another. No reason why we both shouldn't be able to use the one we like (other than Apple not creating a CDMA version of the iPhone, yet).
Imagine if Comcast said that only Sony or Pioneer TVs would work on its cable service. Or DirecTV only supported Phillips TVs. You'd have a lot of [censored] off consumers. The same if Verizon stated that only Dell or HP PCs could use its DSL service. The telecoms should only be providing a network upon which the device runs. Wireless phones should be the same. I should get support from the phone manufacturer (as Apple does with the iPhone) and should be able to use my handset on any compatible (GSM or CDMA) network I choose.
If Apple signed an exclusivity agreement that would only allow Macs to connect to the internet via AT&T DSL, would that be OK? Or could only use AirPort with T-Mobile hotspots?

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Blah, Blah, Blah...get over it. I have been an early adopter of all of Apple's milestone products and have never regretted "not waiting" for a perfect next generation product. As for the network issues--yeah, your comments are valid--but I have lust in my heart every time I reach into my pocket to pull this Fabrege Egg of cell phone out of my pocket. I have an iPhone and you don't. So it goes.

[robco]

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Blah, Blah, Blah...get over it. I have been an early adopter of all of Apple's milestone products and have never regretted "not waiting" for a perfect next generation product. As for the network issues--yeah, your comments are valid--but I have lust in my heart every time I reach into my pocket to pull this Fabrege Egg of cell phone out of my pocket. I have an iPhone and you don't. So it goes.

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I'm not ripping on the iPhone. It's a nice device. But don't try to say it isn't an expensive device. It is. It has a few shortcomings, many of which can, and likely will, be corrected via a software update. If you feel the added cost is worth the wow factor, that's fine. If you don't mind surfing the web at dialup speeds, great.
My complaint is more with the state of the wireless industry in this country in general. The exclusivity agreement between Apple and AT&T should be illegal. Tying phones and service together should be completely optional. There is no reason why there can't be a version of the iPhone that works on T-Mobile or any other GSM carrier.
And the "neener neener" argument doesn't really work. I could have an iPhone if I really wanted one. I don't care much for smartphones personally. I'm connected at home and at work, I don't need to be connected when I'm out and about.

[dmstewart]

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My complaint is more with the state of the wireless industry in this country in general. The exclusivity agreement between Apple and AT&T should be illegal. Tying phones and service together should be completely optional. There is no reason why there can't be a version of the iPhone that works on T-Mobile or any other GSM carrier.

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Why on earth should it be illegal? It's Apple's phone. It's AT&T's cell network. It was a voluntary agreement on their part. And it's no one else's right to say they can't sell to whom they want and make alliances with whom they want.
And yes, I know that if you took this to its logical conclusion, you'd get rid of antitrust law. And . . . I would.

[lantzn]

Imagine what would have happed if Verizon, the arrogant company which likes to cripple their phones, had been contacted by Apple to carry the iPhone. We might have seen more then one carrier offering the iPhone. To bad Apple wasn't open minded enough to do that...oh wait I think they did and Verizon said no thank you. Who's fault is that?

[robco]

Call me crazy, but I'd keep antitrust laws in place. Stifling competition is the logical outcome of capitalism, but a lack of competition is bad for consumers and is ultimately bad for innovation and growth. If the iPhone does well, it will give Apple considerable leverage in dealing with the other carriers.
Verizon did shun the iPhone, or didn't want to bow to Apple's demands. Not knowing the specifics of the proposed deal, I can't say it's good or bad. Perhaps there were valid reasons why Verizon didn't want to take a chance. But yes, Verizon does cripple the functionality of their handsets. Which is why handsets and the network need to be separated. Consumers should be able to use any compatible handset they choose on the network they choose. Wireless service providers should not be able to disable features or functions of the handset.
Basically, I should be able to buy an iPhone from Apple and take it to T-Mobile or AT&T or any GSM provider and use it. I should be able to buy a CDMA smartphone and take it to Sprint or Verizon and use it. The choice of carrier and handset should be mutually exclusive. There's no technical reason why they should be linked. There's no reason why the iPhone can't work on T-Mobile's network and consumers should not be forced into a two-year agreement with AT&T just to be able to use an iPhone. Nor should consumers need to get a new phone when switching carriers, unless they switch from a GSM to CDMA provider or vice-versa.
I'll throw in the old car analogy. If a you had to buy a specific type of car to drive on some freeways and another specific car to drive on others, that would be bad. I don't see how the current situation in the wireless industry is any different.

[NaOH]

What I am curious about, is what happens to the iPhone someone has bought after the two year contract is up, and they want to switch to a different network.
Will Apple pub obstacles in the way of them using their iPhone with the other network?
If Apple use software updates to actively prevent users from unlocking their handsets. What are the options available to the users?
At some point, I think Apple are going to have to consider this.
My guess is that they already have, and only use the lock-in as a way to entice carriers into deals that they otherwise wouldn't agree to. "If you agree to our terms, we will ensure that users can ONLY use the iPhone with your network for a period of two years."
That arrangement would ensure new customers for the mobile phone carrier, and a guaranteed revenue flow thanks to the iPhone.

[nextwave]

iPod haters??? My wife and I have have been laughing at this concept all morning.
Devotion to things makes people weird.

[canettijazz]

Nice article, Dan.
In response to robco, there are sound reasons for Apple to have an exclusive deal with AT&T for launching the iPhone. This is a new - potentially -groundbreaking product, with new technologies. First, I'm sure there has to be new technology involving with implementing visual voicemail. Working with a single carrier would be much simpler than getting all the major carriers to agree to Apple's new implementation. Secondly, with a phone that changes the rules, Apple needs to get the carriers to agree to their conditions (eg. visual voicemail, iTunes activation, etc). Do you think that these large established carriers would all kowtow to Apple's conditions? Hardly. In fact, you mention that Verizon turned Apple down. Based on the initial reaction and the current state of things, I'm sure Verizon is regretting that decision. Because Apple was new to this highly competitive area, they didn't have a lot of clout, so establishing Apple's concept is much easier with a single carrier. The third and just as important in Steve Job's eyes would be secrecy for the new iPhone. More companies, more people involved means greater chance that spy photos, details, etc. would be leaked.
Now, at some point, I would expect the iPhone to be available for use through more carriers, but probably not until close to the end of the 2 year exclusive AT&T agreement.
I totally don't understand why hackers are trying to unlock the iPhone because even if it works with another carrier, I'm sure the visual voicemail won't work. Why bother if you lose some of the Apple iPhone experience?
Finally, I just want to point out Apple has never been all things to all people with their products. It's not about the laundry list of features, but making the basic functions work together seamlessly and with style and ease. Will Apple ever make an iPod with a built-in radio? No, but that hasn't deterred iPod purchasers. Can you purchase a mid-level Apple computer without a screen? No, but that hasn't deterred iMac purchasers.

[Dan Frakes]

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iPod haters??? My wife and I have have been laughing at this concept all morning.
Devotion to things makes people weird.

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If you've ever visited various audio boards -- or even the popular gadget sites -- you'll know exactly what I'm talking about. Just as there are Mac- and Apple-haters, there are people who have an unhealthy animosity towards the iPod...

[robco]

This is where you lose me. The iPhone is not groundbreaking. It doesn't do anything that any other smartphone does already - in fact, it's lacking certain features. The only unique feature is visual voicemail and I'm pretty sure that one could dial into a regular voicemail system to retrieve messages the old fashioned way. AT&T could market that as an additional feature and there's no reason why RIM, Palm, Nokia, etc. can't offer the same feature in the future. I'm sure Apple and AT&T will license it - for a fee. The iTunes activation is fine, but I should be able to choose the carrier I want. iTunes in this sense is little more than a customized web browser accessing information on AT&T's servers. Verizon will regret the decision - if sales of the iPhone remain strong. Actually, here is a scenario you'll probably see quite a bit in your local AT&T Store:
Customer: Wow, is that one of those new iPhones?
Sales Rep: Yeah, you can check email, surf the web and it plays music!
Customer: How much?
Sales Rep: Oh, it's $499 for 4GB or $599 for 8GB, plus a two-year agreement.
Customer: Oh, that's too much
Sales Rep: Well, I have the Blackberry Pearl for only $149, or the Palm Treo for...
Already the iPhone is having a ripple effect. It will also spur other makers to introduce improvements. As for basic features lacking in the iPhone, I'm sure Apple will add some of those functions via software update. Some hardware deficiencies will be corrected in future versions. Apple does like to remain tight-lipped, but the secrecy argument is no reason for giving consumers the shaft.
Hackers are unlocking the iPhone because they can. Because they feel that they can still have a good iPhone experience without visual voicemail. Because they don't like the idea of being forced into an agreement with AT&T just because they happen to like the iPhone and don't think that other consumers should either.
You can have integrated FM radio with your iPod if you buy the iPod Remote. And lots of people have been clamoring for a mid-level machine from Apple without a screen for some time, including the fine folks at Macworld. If Apple isn't going to be all things to all people with their products, then they need to quit marketing their products as groundbreaking, innovative, industry-changing, etc. Lay off the hyberbole a little.

[nextwave]

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iPod haters??? My wife and I have have been laughing at this concept all morning.
Devotion to things makes people weird.

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If you've ever visited various audio boards -- or even the popular gadget sites -- you'll know exactly what I'm talking about. Just as there are Mac- and Apple-haters, there are people who have an unhealthy animosity towards the iPod...

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Okay. But your need to convince me of this just proves my point.

[hempadvocate]

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I totally don't understand why hackers are trying to unlock the iPhone because even if it works with another carrier, I'm sure the visual voicemail won't work. Why bother if you lose some of the Apple iPhone experience?

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How about so you have an amazing widescreen iPod that just happens to also connect to Wi-Fi and can make phone calls... the "Visual Voicemail" isn't a selling point for me.

[hempadvocate]

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Blah, Blah, Blah...get over it. I have been an early adopter of all of Apple's milestone products and have never regretted "not waiting" for a perfect next generation product. As for the network issues--yeah, your comments are valid--but I have lust in my heart every time I reach into my pocket to pull this Fabrege Egg of cell phone out of my pocket. I have an iPhone and you don't. So it goes.

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Would you have bought an iPod if the only way you could use it was to sign up for a 2 year contract with iTunes and the only music that would work on it had to be bought from Apple? I thought not.
I was really hoping Apple would "Think Different" and sell a consumer phone that you could buy that would work with your cellular provider of choice. As it is, Apple has a product I'd gladly buy... if I didn't have to pay to break my existing cell contract and start service with a different company.
The least they could do is sell the iPhone and have the iPod and Wi-Fi features work without a cellular contract being necessary for "activation"

[Dan Frakes]

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This is where you lose me. The iPhone is not groundbreaking. It doesn't do anything that any other smartphone does already - in fact, it's lacking certain features.

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I have to disagree. As I mentioned in the article, the iPhone doesn't have every feature, and some of the features it does have aren't perfect. Yet it is groundbreaking, because the overall package is simply the most usable phone ever.
I don't make that assertion lightly. But I've used many mobile phones over the years, and most have been barely usable. Sure, you could make calls, and sure, some had some cool features, but few people actually used those features because they weren't accessible (in the "easy to use" sense of the word). The iPhone's features, on the other hand, can be mastered by your typical consumer in very little time; even more significant, people want to use the iPhone.
In other words, it's not what the iPhone does that's groundbreaking; it's how. No other phone on the market really comes close in this respect.

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You can have integrated FM radio with your iPod if you buy the iPod Remote.

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Note that the iPod Radio Remote doesn't work with the iPhone.