From activation to frustration
After waiting in line hours or even days to score Apple's much-touted iPhone on Friday, a number of consumers spent at least part of the weekend waiting on hold with Apple's exclusive network partner AT&T, jamming customer service lines in their attempts to sort out the activation issues that plagued untold numbers of devices. While AT&T attributed the problems to overloaded servers and subscriber portability issues, the activation angst served to again call into question whether the operator's network is sufficiently robust and reliable to handle the extraordinary demands that the iPhone brings with it. In the hours leading up to the iPhone's release, critics were absolutely killing AT&T's EDGE service, comparing its speeds to dial-up. Â
The iPhone itself arrived to Apple's usual huzzahs and tickertape parades, of course--not since the glory days of Wham! has one half of a partnership been so celebrated and the other so roundly derided. But the iPhone was never about AT&T, anyway. Its role in the iPhone's birth is effectively that of a surrogate mother--the operator may share responsibility for bringing the device into the world, but its parental rights are virtually nil. AT&T was the only operator willing to bend to Apple's demands, and for at least a few years, it will reap the subscriber rewards that come with their alliance. After that, all bets are off.
It's fascinating to ponder what Apple will do when AT&T's exclusive ends. A carrier partner will always be a necessary evil--following the failures of ESPN Mobile and Amp'd Mobile, no way will the company consider an MVNO of its own--but Apple knows the real power and profit lies in opening up the iPhone for third-party development. In late May, Apple CEO Steve Jobs announced at the D: All Things Digital conference that the company is working to open the device to outside developers, reversing course on his now-infamous comments published in a January 2007 feature in Newsweek: "You don't want your phone to be an open platform," Jobs said at the time. "You need it to work when you need it to work. [AT&T] doesn't want to see their West Coast network go down because some application messed up."
Re-read Jobs' statement carefully in light of this weekend's activation fiasco: In other words, carriers' next-generation data networks are still so shaky that one misbegotten application (or one heavily-hyped device launch) can muck up the entire works. AT&T has a few years to step up its game, or else Apple will move to a network that doesn't buckle under the pressure. Either way, Apple now calls the shots, and the balance of power is shifting. Meet the new bossâ€¦ not quite the same as the old boss.Â -Jason