[robco]

This is partly due to the way wireless service and handsets are handled in the US. They're tied unfortunately. It would be nice if they could be purchased separately more easily. You don't buy your TV from Comcast or DirecTV. In any case, the subsidy should be a line item on the monthly bill - essentially a loan payment. If I choose to pay the full price for my handset, that subsidy should be fully refunded. Otherwise, if I choose to terminate my agreement or switch phones, then I should pay the remaining balance of the handset subsidy. But instead they just sort of lump everything together. I wish the Pre were a better device (it needs more memory and more software) mostly because Sprint has better pricing. AT&T charges way too much for SMS, something that costs them next to nothing to provide.
But Apple wanted a world phone and that meant GSM. AT&T and T-Mobile are the only GSM-based carriers in the US. Apple needs AT&T too, unless it's willing to make a CDMA version of the iPhone for Sprint or Verizon. The switch to LTE won't be complete for some time - and it will cost money. To be fair to AT&T providing good coverage over a broad area with GSM is costly and difficult. Given the actual data usage on other smartphones, I can see how it was easy for them to underestimate the usage they would get with the introduction of the iPhone.
AT&T isn't about customer service and it is too bad. I was rather hoping the iPhone would change the wireless experience - and not just with a new device. Hopefully in a couple years Apple will drop exclusivity and we'll see competition. Until then, just gotta grin and bear it I guess.

[Jason Snell]

QCassidy352 said:

I agree with this article EXCEPT the sympathy with those who are angry over the upgrade pricing. If you bought the iphone 3G last year and didn't either a) bother read what you were signing, or b) understand the business model of every US cellular company, then that's on you.

I think I said I feel for them. I didn't go beyond that. Read between the lines... ;-)

My point remains that AT&T could have anticipated this and communicated it in a better way, rather than just doing what every US cellular company has always done. But that doesn't change your overall point, which I can't argue with.

[reifer]

Great article, well written and makes a good point.
ATT might not be the best but, I couldn't consider the Pre on Sprint. I'm reasonably pleased with ATT because I can use the phone virtually any where in the world. Sprint is not an option except for Americans without a passport. Their attitude on the new capabilities is a mystery and it' pretty clear that Apple is not happy--and they're right.
One point that I don't much care for is the idea that the only way to get tethering is to buy a monthly contract. There is no way I can justify paying $60 a month. It'd be a waste. I don't want to use it all the time, just when I'm in a place where I need my laptop on line but, can't get it done. Might not happen once a month. That's the convenience--there when you need it. Most of the time, that's likely to happen outside the US. Why can't they just give us something where we pay as we go. If we use it, charge us but, a monthly fee makes it a non-option for me. There has to be a better way and if it wasn't free unlimited, maybe it wouldn't choke the system.

[distortedloop]

QCassidy352 said:

I agree with this article EXCEPT the sympathy with those who are angry over the upgrade pricing. If you bought the iphone 3G last year and didn't either a) bother read what you were signing, or b) understand the business model of every US cellular company, then that's on you.

I understand the subsidy isn't paid off two year contract thing, and I've pre-ordered a 3GS, but here's what I think confuses a lot of people over the subsidy business:

If you buy an iPhone (or any phone) at the $299 subsidized price, then you're stuck on a two year contract at $69/month.

If you buy an iPhone (or any phone) at the $699 unsubsidized price, then you're still stuck on a two year contract at $69/month.

If you buy an iPhone (or any phone) at the $699 unsubsidized price, and don't sign the two year contract, you're charged MORE than the $69/month.

The implication here is that the two year contract price isn't really paying back the subsidy on the phone, if it was, then you should be able to get a lower rate on a two year contract that you paid full price for the phone on. In fact, you don't. If you don't sign a contract, then the monthly rate goes up. This certainly suggests that the discount on service is for the commitment to pay for two years, the same way you pay more per month for FIOS or cable tv in some instances if you don't commit to a 1 year or more contract.

There's something very fishy about the whole pricing structure related to cell phones and their service that is not easily reconciled with the subsidized hardware business model.

[richtestani]

I kind of think Apple should take their iPhone and walk.
Then offer it to any service that wants to take on just contracts - no hardware sales.
Why phone carriers have control of phone is just wrong. This was how it was, back when Ma Bell ran the telecom world. You’d have to buy the phone from them. Not any more, the cell phone industry should be no different. Its monopolistic and we should be able to buy and phone at any time and choose a provider for that phone.
I think Apple and iPhone might be the only company that can do that.

[heisetax]

Verizon would have given a better cell phone experience. But with the way Verizon handles the cutting the use of most cell phone features, & the fact that Verizon has the poorest choice of smart phones, one would have expected a very poor experience from Verizon. By the looks of things they are not ready for smart phones. This means that they need to make changes just to make any smart phone a real reality.

I am saying this as a non-smart phone Verizon multiyear user.

[heisetax]

Probably because nobody else would agree with his terms.

[richtestani]

I agree. I used Versizon for about 2 years before the iPhone and the phone choice was just plain bad.
Outside of the usability factor, Verizon liked to make sure the phone didn't offer too much in the way of feature set.
Notable Bluetooth file transfers, SD card file transfers and sending photos cost money.

Service from Versizon, however was pretty damn good - but I was ready for a great device like the iPhone and had issues dropping them for ATT - even knowing how bad a company they were.

[adobephile]

This worthless article does nothing but pander to the ignorant mob, as evidenced by the majority of comments.

It's one thing to know about new features of the new phone and OS, requiring carrier support, but an entirely other thing to purchase, install, and test the nationwide infrastructure to support it. It's all invisible to the madding crowd. All they see are logos and the chance to lash out at a faceless "big company", as well as to lash out for actually having to PAY for something (eek!).

Apple has its timetable. AT&T has its timetable. They're most likely rarely the same.

It's not like we're LOSING anything. We're getting new phones and new features in the new OS. It's just a delay in getting some of the new stuff working. It'll come.

[stockcerts]

Apple has about 29 billion dollars in cash. I think they should consider starting up a new cell company that's customer friendly, either that or buy one that's already inexistance and rebrand it.

I think the IPhone is the only Apple product I can think of where consumers are totally at the mercy of a third party for a majority of the issues that arise.

[JohnML]

AT&T is a victim of their past success. It still thinks it is a land line supplier who can go to the PUC for a rate increase. Marketing what is marketing!!!!!

[WolfmanT]

When Apple signs with Verizon I will buy a phone. ATT's antics with Apple that have lead to this conflict, represent the same way they treat their customers. They are nothing but a money grubbing corporation that wants it all and they don't get the bigger picture.

[alansky]

AT&T is going to be missing many more iPhone opportunities if they don't get their disgusting butts in gear and stop withholding essential services from their iPhone subscribers.

[absolutegreek89]

Well part of the problem could be with the late transition to DTV. The airwaves that that was supposed to free up where mainly bought up by AT&T and Verizon. Since the DTV switch only happened this weekend AT&T may not have had the time it might have had to prepare if the switch would have happened in February.
I honestly have no idea if this would be a factor, but just a thought.