AT&T CEO “Leaks” News of iPhone Going 3G

To some, Randall Stephenson, CEO of AT&T blabbing that a 3G iPhone is coming is a slip of the tongue, to some, it’s a well planned metaphoric stab at Steve Jobs and to others, it’s old news.

The bottom line is it’s a combination of all three but the consequences are very mimimal.

Why? Because there are two camps.

People who have no idea what 3G is.
People who care about having 3G.

Here’s your test, go up & asks someone if they are GSM or CDMA. That’s ALL you ask them – no alluding that it’s a cell phone acronym – just ask them GSM or CDMA?

90% of the people will go – huh?

The 10% who can actually answer can tell you about whether 3G is important to them.

Of that 10%, 100% can tell it’s a feature the iPhone will eventually add just like GPS.

IT’S JUST A GIVEN.

It’s like asking if the laptops in the stores will be faster next year?

Or if NAND memory will get smaller & cheaper per GB.

IT’S A GIVEN.

In fact, Steve Jobs answered the questioned that 3G was not included because of battery usage right upfront … part of the answer may have been AT&T was just not ready to provide a 3G network at the cost that Apple was happy with … how many people wants 3G at $60-$75 EXTRA per month? How many iPhones would Apple have sold if the lowest price package was around $120 a month and the high was $160 a month?

THOUSANDS of bloggers (lead by ZDNet, no doubt) would have SCREAMED – why not EDGE – it’s “good” enough for maybe $10 extra month?!! Why, oh why is Apple forcing 3G down the throats of innocent people who just want EDGE?

There is just no pleasing some people …

Part of the answer was undoubtly the battery life but part was also AT&T’s network capability … they seem barely able to handle the voice portion – how are they going to deal with 4 times the number of TOTAL 3G subscribers in the US all jumping on their network to text and VOIP?

When will we get 3G iPhones?

Well, part of the answer is when AT&T’s network is ready. Is it ready? Did anyone bother to ask the CEO that? It’s not like adding a feature to an OS – if AT&T networks is not ready, why bother? And analysts presumably can tell when it’s ready … ONLY THEN will we get a 3G iPhone.

Because a 3G iPhone itself is not hard – a software upgrade … a new chip … other than the battery issue, Apple’s portion of this is EASY … is AT&T ready? Is AT&T ready AND not ready to charge us another $60 a month because if that’s the case, it will be as popular as 3G is now in the United States … out of 150 million internet users and over 200 million cell phones, how many 3G users are there now at $60-$100 a month?

LESS than a million.

People have an opportunity to choose and buy 3G RIGHT NOW but it’s clearly not at a price that interests people.

Prior to the iPhone, people didn’t really want to surf the internet on the phone because they didn’t want to pay $15 to $30 extra a month – but Apple made AT&T bundle it in with the regular monthly fee which is only slightly higher than a non internet plan with other phones so is AT&T really ready to deliver 3G at a slight bump in cost?

And yes, Cringley is probably right that it’s a shot at Steve Jobs but ultimately, who cares?

Oh, boo-hoo that AT&T takes a shot at Apple because Apple might jump into bed with Google on the 700 Mhz thing … or boo hoo that Apple might “double cross” AT&T … to use a “street” phrase these “journalists” might understand …

THAT’S HOW CORPORATIONS ROLL.

Not only do corporations cross partners and jump in with someone else, sometimes they do it with their own divisions. That’s just the way business is. It’s nothing new and nothing different.

As for consumers, look 90% don’t care – the buy an iPhone because it offers 30 features no more than 2 taps away and with one device, they get a phone, the internet, SMS, music, video photos and handy information plus cachet & fashion … 3G is nice but do I want to wait 35 seconds for my NY Times page to load or do I want to wait 364 days and 8 seconds for 3G and my NY Times page to arrive.

If I want 3G when it actually arrives, I will buy another phone.

That’s how people roll.

Sure, do people claim that they will wait for a 3G iPhone – of course, but I’ll bet 90% of those people will then claim they are “now” waiting for a 3G & GPS iPhone or if Apple delivers both that, they’ll want a video camera iPhone … or if that’s included, a 12-MP camera … that “wish” list is never ending and it’s a moving target because they DON’T REALLY WANT AN IPHONE – they just want to appear they are rich or savvy enough to want an iPhone if only it had that one crucial feature THAT NEVER ARRIVES IN THEIR MIND.

Will there be a faster laptop next year – uh, d’uh …

Why buy a car when somewhere down the line a hovercar might actually be available – why compromise?

If you want an internet-iPod Phone, what are you waiting for? Perfection?

Or do you really never intend to buy one and just talk a good game?

There will always be something faster & better NEXT year but you can wait and use NOTHING or use something until the better one actually comes out?

Of course, we are at the nascent stage of the iPhone and it is understandable that not everyone needs an internet-iPod-Phone – but the bottom line is 90% of the people who claim to want is a 3G iPhone is just plain lying, just want to sound savvy or just like to hear themselves talk.

That’s NOT to say there aren’t plenty of other reasons why people don’t want to buy or don’t need to buy an iphone – some of the REAL reasons might include:

not wanting to pay more than $25 for a phone because they cannot afford it;
not wanting to pay more than $25 for a phone because they don’t see the need
they hate AT&T
they are boycotting AT&T for the wiretapping issue
they can’t get out of their contract
they hate Apple
they hate their cell phone as it is …

and the list is nearly endless but 3G is way down the list for the average consumer and even on the list of savvy buyers who claim to be holding off because the iPhone is not 3G … they clearly don’t need internet access that much because they’d rather WAIT ANOTHER YEAR for the internet on their phone instead of waiting :30 seconds more TODAY with an iPhone.

The biggest hinderance to wider iPhone acceptance is simply the price but that will not change. Apple is not about to do a Moto or Nokia and sell their crown jewel Apple “name” AND kill their margins just to grab market share willy-nilly. Apple simply wants the greatest market share at the highest margin … and the bottom line to slow(er) iPhone acceptance is much like the iPod. People do NOT believe anyone when they are told something is easy to use – they have not only been fooled, they’ve been conned so they are naturally leery. Even if their regular cell phone promises them music, the internet and the moon and is crap – at least, they are just out $25 bucks and can go swap it out AGAIN for another phone (of course, the cell phone companies are happy – they just re-trigger the 2-year contract from today – what do they care about Nokia or Moto branding?)

So, the 3G iPhone is not much news. Will a couple hundred people hold off? Sure – much like the iPod or the person who wants to wait just anoither 4 months before buying that new laptop to make sure a faster one isn’t coming (pssst, a faster one is coming but maybe you don’t need a laptop if you can go 4 months without one).

And yes, it could get interesting corporate-gossip wise if Apple jumps in with Google but AT&T is not exactly a mom-pop operation who have placed all their marbles in with Apple – they are advertising other phones and even have other competing features with Apple like the other music store but is Apple crying boo-hoo? No – because they realize that’s the business of business. It’s a cold hard world and only high margin revenue will keep them warm 😉

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6 Comments

Filed under Advertising, Apple, Computing, Design, Financial, Gadgets, Internet, iPhone, Marketing, Media, Music, Retail

6 responses to “AT&T CEO “Leaks” News of iPhone Going 3G

  1. I doubt Apple is too worried. Won’t be long before the A in AT&T stands for Apple. 🙂

  2. fog city dave

    Thank you. There were at least five very insightful arguments presented here that I have not read anywhere else, and have been just shy of being able to verbalize myself. Excellent post…

    FWIW, I’ve had the iPhone since the second weekend (love it) and the EDGE network has rarely caused me any grief. I wouldn’t trade it for the non-integrated and power-hungry 3G chipsets out there…no thank you. Not at this time.

    Thankfully, Apple is only marginally interested in bullet-point feature lists, but are single-mindedly consumed by user experience.

    (METROXING: Thanks for the nice words!).

  3. Terry

    You’re right on the mark, especially about EDGE vs 3G. I’ve been quite happy with EDGE on my Windows Mobile smartphone for almost 2 years with unlimited data plan from AT&T for $20/mo. I will *not* pay AT&T $40/mo (and up) for the unlimited PDA Connect plan which all the new AT&T smartphones (Q Global, Blackjack II, Tilt, etc) require. I suspect they are discouraging consumer acceptance of 3G because the network just won’t support a significant increase in usage.

    My only guaranteed choices for keeping a $20/mo data plan right now is to 1) keep my current smartphone or 2) go with the EDGE iPhone. I could wait and hope that Jobs wins the battle with AT&T and the unlimited data plan for a 3G iPhone is $20/mo like the EDGE.

    Bottom line: This non-announcement announcement from Stephenson is *more* likely to induce me to get an EDGE iPhone now and wait 2 more years for 3G and Android to mature.

  4. JDT

    I don’t think it was a well-delivered attack and I don’t think it was a slip of the tongue. I think he did not know when the phone would come out for sure and so was simply repeating what Steve Jobs himself said, that a 3G phone would be out 2008. Steve said that; so what is the big deal?
    I also think that because of the iPhone, more people have heard that 3G is faster than EDGE (thanks to iPhone bashers condemning Apple for a wise decision).
    So, let’s say of that now the instead of asking “anyone” we ask people that are looking for a new phone and instead of asking “GSM” or “CDMA” we ask “3G” or “EDGE”. Results would look like more like this:
    70% would go – huh?
    20% would go – 3G because it’s faster
    10% can tell you about whether 3G is important to them.
    Would this make any change whatsoever on your article’s observations or conclusions? No.
    One question though is if the networks in Europe are ready for 3G (and far more people there know what it means) then why wasn’t it deployed as a 3G phone there?
    I agree with most of your other points.

    (METROXING: I am not an expert on 3G but I presume the battery issue is real but my feeling is that AT&T was not ready to offer 3G for $45-50 a month as part of its cheapest package and the battery issue just clinched the deal … sure, do I want 3G – like most people we would say yes – just like asking us if we want to watch live video on a portable device but if that reduces my iPhone battery life to 2 hours or they want to charge me $20 or $25 more a month like Sprint, do I still want live video? … so people will say they want a lot of things but no one bothers to ask if they are willing to accept tradeoffs … I think for Europe, presuming the battery issue is not a major thing, it’s mainly because it would not match US specs and the outcry would be too great … I also think that with WiFi hotspots coverage, that’s a good enough compromise for Europe since people tend (at least the people with larger incomes) to live in larger cities, people tend to live in more density and Europeans are plaza/town square gatherers while in the US, there are hardly any cities where people gather on a regular basis to a great degree (maybe NY & Chicago might be exceptions).

  5. iHeard that Steve is p-i-s-s-e-d.

  6. I find that buying an Iphone is a very easy because there are no upgrades or different types. One Iphone and you get everything. You plans may vary depending on your needs. When you buy an Iphone you don’t have to get the Internet athought you should. It needed for all the bells ans whistles.

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