Why did Apple have to partner with AT&T?

[Manic Mouse]

Is there any reason why Apple have to partner with a service provider to sell the iPhone? It seems the network and being forced to buy a 2 year contract is putting a lot of people off the iPhone. Why couldn't they simply sell it, unlocked, directly to consumers through Apple stores or their website? Is visual voicemail the only reason? Because that's pretty weak...

 

[dfnj123]

Is there any reason why Apple have to partner with a service provider to sell the iPhone? It seems the network and being forced to buy a 2 year contract is putting a lot of people off the iPhone. Why couldn't they simply sell it, unlocked, directly to consumers through Apple stores or their website? Is visual voicemail the only reason? Because that's pretty weak...

More people have AT&T then any other service provider and almost every service provider would give a 2 year contract

 

[rdowns]

Because Verizon turned them down?

A partnership with a provider means Apple can do things other phone manufacturers can not. Visual VM is the first.

Supporting the device will also be much easier with a single provider.

Look at what ATT has done so far - allowed Visual VM and whatever that required in terms of upgrading/changing their infrastructure, the reports of EDGE being beefed up, activation through iTunes and not in store.

A new day has dawned in the cell phone industry.

 

[marksman]

Because there are things they wanted to do that required a partnership with someone capable of managing a large network and cell phone service. They could not do it all themselves or the phone would have been lacking and not had some of the features. Things like Visual Voicemail etc would not have happened.

They clearly had a vision of what they wanted and knew they needed a network partner to make it happen.

 

[dsnort]

Along with these other answers, I would add that keeping control over the UI is a big factor for . It seems I remember this being discussed when the iPhone was first rumored, that Verizon is bent on putting their craptacular "Vcast" UI on all phones they sell. I could be wrong though.

 

[kamiboy]

$$$

 

[richard4339]

The AT&T GSM network is also more of a worldwide standard, meaning less of a re-architecture to release the future models in other parts of the world.

Personally, I wish they had gone with Verizon. I'd be standing in line at a store now if the phone used Verizon, but I won't go near AT&T again (though I've had a hard time repeatedly convincing myself of this)

 

[TraceyS/FL]

Personally, I wish they had gone with Verizon. I'd be standing in line at a store now if the phone used Verizon, but I won't go near AT&T again (though I've had a hard time repeatedly convincing myself of this)

Be strong.

I wouldn't be in line for V1 if they had gone with Verizon, but i'd be pay attention for V2.

The coverage Verizon offers here can't be beat......

 

[DaveGee]

No matter WHO Apple choose to go with... Given the revenue sharing model Apple formulated, an exclusive was necessary... as such, a contract would have been mandatory.

Now it just comes down to carrier...

Cingular - ~70% of the US base would be mad
Verizon - ~70% of the US base would be mad
Sprint - ~80% of the US base would be mad
T-Mob - ~85% of the US base would be mad

Numbers aren't exact but close enough to get my point across...

Dave

 

[macfreak86]

More people have AT&T then any other service provider and almost every service provider would give a 2 year contract

So, more people would prefer a 3g network over the outstanding customer service that tmobile has. Yeah, that makes sense. (NOT)

 

[robanga]

They got the best deal. In my area the AT&T 3G network is second only to Sprint and let's face it Sprint is not looking so healthy these days. Secondly if you leave the country as a Sprint or Verizon subscriber you have to go to certain heroic efforts to get a phone to take with you.

From that perspective, AT&T was the better of the two choices.

So, more people would prefer a 3g network over the outstanding customer service that tmobile has. Yeah, that makes sense. (NOT)

Features will trump customer service every time. Do I need to send you to marketing school?

 

[Knowlege Bomb]

So, more people would prefer a 3g network over the outstanding customer service that tmobile has. Yeah, that makes sense. (NOT)

Where was this said??

And how does this even make sense? The original iPhone, as most will remember, didn't run on a 3G network. AT&T was chosen because it's one of the cellular giants in the US (and because Verizon turned them down; Apple would not agree to their horrible interface).

 

[izibo]

So, more people would prefer a 3g network over the outstanding customer service that tmobile has. Yeah, that makes sense. (NOT)

I use 3G ten or fifteen times a day. I call customer service once every three months, if that. You tell me...

Oh, and by the way, the mid 90's called. NOT.

 

[macfreak86]

Features will trump customer service every time. Do I need to send you to marketing school?

HA HA. NO. I still think apple should have chosen tmobile anyway, because i have a friend with an iphone and he's constantly dropping calls. I wonder how many people out there drop calls all the time on their iphones. I'm with tmobile and i never drop calls. EVER! Plus, in my opinion, the battery life is better on the blackberries than the iphone.

 

[Small White Car]

Is there any reason why Apple have to partner with a service provider to sell the iPhone?

Amazing how many people ignored the question here and simply argued why they picked AT&T over someone else.

Not the question, guys! (Yes, a few of you got it.)

The simple answer is that an unlocked iPhone would cost somewhere between $600 - $900. If Apple had not worked out a revenue-sharing deal with a provider, that's what they'd have to charge to sell the things.

If you're thinking the iPhone could have succeeded at those prices, well, the short anwer is 'no,' it couldn't have.

Sure, with AT&T people end up paying for it in the end, but the cost is hidden and spread out, so they're ok with it. Funny how that works, isn't it?

 

[Turmoil]

Cash Money. Dollar Bill, Dollar bill.

ATT runs a fine network and the only reason you get an iphone for less than it costs to make it is the deal with the carrier.

hint: Apple is a business.

 

[macfreak86]

Where was this said??

And how does this even make sense? The original iPhone, as most will remember, didn't run on a 3G network. AT&T was chosen because it's one of the cellular giants in the US (and because Verizon turned them down; Apple would not agree to their horrible interface).

I was replying to the 2nd quote.

 

[bstpierre]

HA HA. NO. I still think apple should have chosen tmobile anyway, because i have a friend with an iphone and he's constantly dropping calls. I wonder how many people out there drop calls all the time on their iphones. I'm with tmobile and i never drop calls. EVER! Plus, in my opinion, the battery life is better on the blackberries than the iphone.

I have never dropped a call either. I am on AT&T with the iPhone 3G

 

[macfreak86]

I have never dropped a call either. I am on AT&T with the iPhone 3G

Well whooptie-friggin-do for you.

 

[dissdnt]

Because AT&T would take it right in the poop shoot from Apple. Verizon wouldn't.

AT&T no bars in all places.

 

[pilotError]

If Apple decides to put out a netbook, be prepared for another AT&T contract.

Like it or not, AT&T has been a pretty faithful partner for them.

 

[kdarling]

AT&T was chosen because it's one of the cellular giants in the US (and because Verizon turned them down; Apple would not agree to their horrible interface).

The first is correct. After trying for a year to get Verizon to take the (unseen) iPhone, Apple went back to Cingular and signed a deal during a quick two day negotiation.

The UI had nothing to do with Verizon turning down Apple. (Anyone who's ever had a smartphone from Verizon knows that they don't put their dumbphone UI on it. At most Verizon might've wanted their logo on there somewhere.)

Some reasons are detailed here.

Because AT&T would take it right in the poop shoot from Apple. Verizon wouldn't.

ATT has stated that they didn't bend at all.

ATT didn't do a lot. They did spend a couple of months boosting EDGE performance (which affects all EDGE users, not just Apple) instead of adding 3G. And they added visual voice mail, which is actually a pretty simple job.

Otherwise, they just gave Apple the monthly subsidy that customers usually get. And they didn't have to deal with warranties. No extra skin off ATT's back.

In return, Apple was forced into an exclusivity agreement, which is great for ATT. They can continue to sell RIM and WM phones all they want, while Apple loses out on 2/3 of the US market... giving the other cell phone makers plenty of breathing space to catch up.

 

[rjohnstone]

HA HA. NO. I still think apple should have chosen tmobile anyway, because i have a friend with an iphone and he's constantly dropping calls. I wonder how many people out there drop calls all the time on their iphones. I'm with tmobile and i never drop calls. EVER! Plus, in my opinion, the battery life is better on the blackberries than the iphone.

T-Mobile is a little fish in the US compared to the other carrier choices.
Verizon and AT&T are the big boys.
T-Mobile is still playing catch up in the US market with their non-standard 3G implementation.

The argument about call quality can be made for or against ANY carrier.
It all depends on where you're at.

And this little tid bit might make your head spin.
In many major US markets, AT&T and T-Mobile share tower equipment for GSM voice service. If you have coverage for one, you'll have it for the other.

 

[firewood]

Is there any reason why Apple have to partner with a service provider to sell the iPhone? It seems the network and being forced to buy a 2 year contract is putting a lot of people off the iPhone. Why couldn't they simply sell it, unlocked, directly to consumers through Apple stores or their website? Is visual voicemail the only reason? Because that's pretty weak...

They didn't have to. But the reason is obvious: They would have sold only a fraction of the current number. The Prada came out before the iPhone but didn't have a carrier subsidy. How many people do you know purchased one of those?

 

[7on]

T-Mobile is a little fish in the US compared to the other carrier choices.
Verizon and AT&T are the big boys.
T-Mobile is still playing catch up in the US market with their non-standard 3G implementation.

The argument about call quality can be made for or against ANY carrier.
It all depends on where you're at.

And this little tid bit might make your head spin.
In many major US markets, AT&T and T-Mobile share tower equipment for GSM voice service. If you have coverage for one, you'll have it for the other.

And dropped calls are mostly handset related. My iPhone will have No Service while my GF's bb Curve in the same spot gets 2-3 bars.