I haven’t been privy to the private conversations of Steve Jobs, but listening to his keynote the other day, it’s difficult not to pick up on at least some antipathy the man seems to hold towards the entire mobile phone industry.
“Steve Jobs’ entire keynote was a series of middle fingers directed at AT&T and their carrier brethren,” says Sascha Segan, lead cell phone and PDA analyst at PC Magazine. “Notice that he dropped the iPhone’s price without mentioning AT&T; that he’s introducing the iPod Touch into Europe before the iPhone, which will depress iPhone sales there; and that he had a long chat with a Starbucks exec without once mentioning T-Mobile, who operate all of the Starbucks hotspots that he’ll be selling his music through. Never mind that the song he decided to demo on the iPod Touch was Beck’s ‘Cellphone’s Dead.’”
Perhaps he is merely sharing the frustrations of millions of Americans fed up with carrier-locked phones, draconian contracts, poor customer service, and ludicrous fees, but it would appear that, a little more than two months after bringing Apple into the cell phone game, he is already sick of it.
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“The very existence of the i-minus-phone, the Touch, is a slam at AT&T,” Segan adds. “AT&T was hoping that they’d get customers to come over from other carriers for the ability to use Apple’s radical new product. Now Apple’s offering an option for all of those Verizon, Sprint and T-Mobile users, who now don’t have to switch to AT&T – they can get their Touch and keep their existing phones. The phone is the weakest part of the iPhone anyway.”
Add to the list the fact that the iPod Touch will be available in a 16-gig version while the iPhone still maxes out at 8, and I couldn’t agree with Sascha more. It’s almost like he thought: “Carriers: I hate you. Customers: Here’s the iPhone without having to deal with them, and an extra 8-gigs of memory to play with while you’re at it.”
As I said–I’m not sure what kind of backroom wheelings and dealing Jobs has had with AT&T, but I would bet money that they have been littered with frustration and tension. I would also bet that Steve has the date his exclusivity agreement with AT&T expires circled on his calendar. I think it goes without saying that he can’t wait to open up his toy to the rest of the country, not to mention the rest of the world, where customers are free to pick whatever phone they want, no matter who they choose to pay their monthly bill to. While few electronics companies are as American as Apple, perhaps Jobs’ mentality would find itself a better fit in Europe or Asia.
If he dislikes AT&T so much, why did he tie the iphone to it in the first place?
I have to say the article makes a lot of sense. I found it odd that he never mentioned AT&T with Starbucks. As for why he tied to AT&T in the first place, no doubt it was a way to make sure Apple got that rumoured 10% from bills.. If Apple had been “open” no carrier would never have agreed to that revenue sharing. Also, it’s got to be easier to work with one, in the first instance, on implmenting the backend for Visual Voice mail etc etc (although i suspect that wont take much doing now it’s ‘done’)
Of COURSE he hates the cell phone companies. Who among us doesn’t? (I’m assuming no top-level cell company management is reading this; they’d be the only ones with any love for this evil and bumbling oligopoly.) Jobs referred to them as “orifices” — necessary evils, basically, that you had to work with in order to enter the marketplace.
You think AT&T’s shenanigans with the NSA warrantless wiretapping are lost on Jobs? I know he’s not happy about having to make this deal with the devil; from a civil liberties standpoint, AT&T is the WORST carrier they could’ve gone with, but probably the only one desperate enough to accept the terms Apple demanded. The knowledge that AT&T is being mildly screwed in all this is probably the only thing that makes the whole deal KIND of bearable in Apple’s eyes.
The European iPhone will be interesting. The EU doesn’t take so kindly to locked phones, and I don’t believe Apple really WANTS to lock the phone, so any carrier lock to O2, T-Mobile, Orange, etc. in Europe will likely be weak and/or will have an officially-sanctioned unlocking program in place. This is the case with European carriers already. You can imagine how hot the European iPhone will be on eBay and the US grey market.
Coleman: The only other option was T-Mobile and they don’t have the native network coverage that AT&T does nor the existing customer base.
This post ends with the idea that people can buy the phone and bring it to any carrier. For US customers, T-Mobile and AT&T are the only national carriers that use GSM so customers would only have two options. Fortunately for the rest of the world (few exceptions like Canada and China), they have their act together and only use GSM and UMTS so yeah, buying an unlocked iPhone would let them go to any of the carriers in their country.
Why did Jobs need to partner the iPhone with *any* carrier? Why not just sell it in the Apple stores and say “here, buy this and grab a SIM card from whoever you like?” Or better yet, sell it with multiple carriers as well as offering a SIM-free option… this is pretty common in England, but over the pond the entire business seems to be a hell of a lot more evil.
I’d say the barrier to entry for Apple to launch their own phone was actually too high to risk selling an unlocked iPhone. The cost associated with designing, building, and distributing the thing mirror Apple’s decision to go with Starbucks - they sure as heck can’t distribute their own kiosks, so why not let Starbucks do it. Apple partners with big names and does so for a reason - it costs less to build items when you’re working with a partner. That’s not to say they don’t regret the AT&T decision. I think they do. They probably came to this realization right before launch when the full rot of AT&Ts infrastructure became apparent. If they had to turn their programmers to the iPhone and hold back Leopard, I assure you it wasn’t because the Safari icon wasn’t just the right color. It was because AT&T probably threw up all kinds of roadblocks as the partnership progressed.
Hm. This is the second time they’ve gotten screwed (kind of) by partnering with a single company on a phone. First Motorola, then AT&T… third time’s a charm?
Interesting thought Mike — But I was under the impression that the awfulness of the ROKR E1 was at least partly Apple’s doing. Sure, the phone was underpowered, bulky, fugly, blahblahblah, but I’m assuming Apple is more to blame than Moto for things like the 100 song limit.
And don’t forget Apple is a corporation, not some benevolent charity handing out cell phones like candy. Of course they can’t enter this business just by selling unlocked phones. Something like 90% of phones in the US are sold through carriers. It makes business sense on every level. There are only a handful of Apple stores out there, and most people don’t buy cell phones online. Distribution-wise, they needed the AT&T branch stores, and AT&T helped shoulder the marketing burden as well.
Actually… they did mention T-Mobile. The guy from Starbucks mentions them at the 1 hour 4 minute and 56 second mark.
People buying the iPhone aren’t signing a 2 year contract with AT&T to have a cool iPod to play with. People buying the iPhone are buying it because they want a phone with a fresh take on a cell phone, and having an iPod built in is a part of that.
With the iPod touch only coming in at 8gb and 16gb, I’m not exactly sure who it is for. That’s a premium price to pay for an iPod with too much storage for a lower end user and not enough storage for a power user.
I don’t see the two products interfering with each other all that much. The iPod functionality of the iPhone isn’t good enough for it to sell as a stand alone device.
Apple needed to be exclusive from the get go in order to get the carrier to really push the iPhone and spend a lot of money on marketing. They also needed to jointly develop features like visual voicemail, and they also needed secrecy. Also, if they really are getting kick backs from AT&T, there’s no way they would have agreed to that unless they were exclusive. Apple got what they wanted and they did what they needed to get it, at the expense of the user. I think they should have done ANYTHING possible to avoid a 5 year exclusive deal with AT&T even if they had to cut back on some features. AT&T IS A HORRIBLE carrier and is really going to keep this device from reaching it’s full potential They’re crooks and they offer the worst coverage and most dropped calls of any other carrier. I love my iPhone but am thinking of getting rid of it in order to return to Verizon, no phone is cool enough to deal with AT&T any longer!
You are reading way too much into this. People should be given credit where it’s due. He did not have any need to mention AT&T or T-Mobile.
i dont agree with a single sentence. youre reading stuff between the lines that doesnt exist. the keynote wasnt about iphones, it was about ipods. when you introduce a new ipod at a keynot you want the media to report on it - you dont want to water down the message by talking about other products. according to your logic, steve jobs hates OS X because he didnt devote any time to it in the keynote either. i dont have the energy to talk about the 8gb 16gb capacity issue at the moment - suffice it to say, it surely has more to do with choosing a price point (notice that all the ipod products are designed to sell at a unique price point Eg 100 usd 150 usd 200 usd 250 etc) and wanting to keep the Touch at the high end of the range.
I’m wondering if Apple has some way to release their own iPhone killer to kill their AT&T contract. Maybe add VoIP phone capabilities to the iPod touch. That way anytime you are near a Starbucks or other WiFi hotspot, you can use it as a phone.
The moment iPhones are available on the grey market, you can bet your bottom dollar that AT&T is gonna get screwed. As far as we know, AT&T can’t subsidize their iPhone sales. If they can’t do that, then there is no reason to choose AT&T unless AT&T massively discounts their own service which I can’t see them doing.
I would love to see the evil empire dissolved once more.
I still can’t believe that that monopoly was broken up once before and is now all back together again. I also don’t see it being broken up again because the NSA has its back.
Steve Jobs has made it clear, what he hates is stagnant companies that waste all their effort by pursuing protectionist agendas and creating crippleware in their efforts to deny the customer what they really want. He has been outspoken about the cellphone industry in the US and the crap they try to foist on the consumer for outlandish prices. The same goes for the music industry who would love to charge you for every time you listen to any song, if you gave them the chance. They are like mafia and he would like nothing better than to break their stranglehold. Sadly, just to break into the market, Apple has to make concessions to the very people they would rather not do business with. For this reason I wish heavily for the success of the iPhone/iPod hackers, as their efforts are the only way the future devices we want really will arrive.
Apple iPhone + ATT = 5year cellphone deal.
Google + New Spectrum = new Voip Wifi
Apple iPhone + Google Voip Wifi = New free National Voip WiFi service in 2 years!
ATT 5year deal means nothing…. Steve always has a plan B which is always really plan A.
Nice article, but it’s full of holes.
I have to agree w/ Oheera here.
Of course Steve Jobs doesn’t like the cell phone industry. Noone loves the cell industry (not even their mothers), but its a necessary evil. It’s a HUGE market. It’s not a ’support issue’. Keep in mind that Apple does not deal with “Cell Issues” just iPhone specific issues as if it were another iPod or Macbook or Mac Mini or whatever. As far as Apple is concerned, it’s just another device. By “partnering” with AT&T, they’re handing off all cell related issues to the provider.
As for the Starbucks deal. AT&T has nothing to do with it. Nothing was said about internet access. If Starbucks and T-Mobile have a deal for “WiFi” access then that has nothing to do with iPhone users being able to hook into the Starbucks LAN via WiFI and access the iTunes music store. Noone said they’d get any deal on any other web access.
And even without the exclusive AT&T deal… Apple can’t just open the iPhone to the rest of the country… Its still GSM based. Which means that the iPhone can only possibly work with T-Mobile. Verizon/Sprint/Etc. users still have to wait for a hardware change.
And 16gb iphone WILL come. My .02 is that this is the primary reason for the price drop of the 8BG iPhone. They’ll likely slip the 16 GB version into the 8GB’s old price slot. In the meantime Apple can now make inroads to the pockets of the people who won’t switch from Verizon/Sprint/etc.
there is more to the iphone att partnership then just the visual voicemail. this is the only phone you can pick up off the shelf and activate it without a sales guy. plugging this in to itunes and having it port your number allow you to select your payment plan and activate it is all part of the apple big picture. cutting the keyosk mall sales guy doing the corporate hard sale out of the picture is a big part of the pie that most people overlook. the iphone is the most upgradeable phone from an os standpoint (i know not from a stand alone app point) but being able to easily push updates and know that features will continue to work on the network will probably prove to be more important that what is first apparent. just a though ps i don’t really like att ether
Doesn’t the iPhone require modifications to the carrier’s back end in order for the iPhone interface to work properly? If this is true, using the iPhone can never be as simple as signing up with any carrier you want. The carrier you connect to would have to support the iPhone interface. Any comments?
If the iPod Touch had bluetooth to connect through your phone when wifi isn’t available, I’d be all over it instead of an iPhone.
The problem I have with these analysts is that they share a lot of things in common with the local jealous boyfriend or girlfriend.
They read WAY too much into WAY too little. I mean come on, just because he didn’t drop T-Mobile’s name once during the conversation with Starbucks execs? Um, First of all, last I checked he has a deal with AT&T, second of all, boo-flippin-hoo. Go buy some Johnson and Johnson Baby Shampoo so you can have no more tears.
So they released the iPod Touch in Europe before the iPhone, who cares. Everyone can activate an iPhone WITHOUT getting on AT&T as easy as they can put on their underwear.
I don’t think this is any indication of anything. He may not like some functions of the cell phone industry but some of these assumptions are just plain idiot and the person making them is a waste of economic space on the planet.
Well he mentioned they hoped to sell their millionth iPhone in September. I think he is just navigating some fairly treacherous waters rather brilliantly. The iPhone and the Touch iPod are different enough to see that it’s just marketing to the two emerging markets - cellular and wifi. He’s got soldiers on both fields now regardless of who wins the airwave wars.
I’m not sure its quite as big a downer on Jobs part as the article portrays, even cellphone’s dead only indicates the hardware aspect, not the service.
Maybe millions of Americans are frustrated but Apple customers are
used to being locked in and paying through the nose and they will smile while being sodomized.
> Steve Jobs has made it clear, what he hates is stagnant companies that
> waste all their effort by pursuing protectionist agendas and creating
> crippleware in their efforts to deny the customer what they really want.
Then the self loathing he must feel has to be immense.
someone put 2 and 2 together and got 5 it seems
Let me correct the Seth. It is not just the american people sick of those bastards operating telecoms, in fact this is a world issue. I have lived in several countries in two continents. In all countries, people are sick of extortion perpretated by the crooks operating telecoms. The offer crappy service, high rates, bad customer service and they give a damn to you.
In the past, before the VOIP age, I usually paid 2,000 to 2,400 bucks a year in telephony bills, because I generally call several international numbers each month. Now, using a VOIP phone, I pay 40 to 50 bucks a year for at leat 3 times more talking time. How the crooks dare to charge 50 times more for the same service.
I recommend everyone with a telephone to buy a VOIP SIP box that allows you to plug your regular phone and sign in for VOIP service over the web. A Pro service will give you a regular number and charge you 50 times less for the same quality.
I agree wholeheartedly that Steve was making reference after another taking potshots at AT&T. You mentioned Beck’s Cellphone’s Dead. As I was watching the keynote, I noticed that he immediately chose Dylan’s Tangled up in Blue (AT&T hello!), followed with a clip from Wild Hogs in which John Travolta is screaming about a bad contract on the phone. Oh and he made a passing swipe about how fast wifi is compared to the Edge network… knowing full well that Steve is notoriously detailed down every single photograph and playlist in his presentations, isn’t it obvious he’s sending a message to AT&T?
Only one person knows if Steve used movies and songs to take a few swipes at AT&T, but the major thrust of your article doesn’t strike me as correct. As soon as I saw the price cut flash across my screen, I IM’d my colleague (we both have iPhones) something like: “Apple is now going to sell a gazillion iPhones!” I think my first instinct was correct — thanks to the price drop, the iPhone is still the best iPod, AT&T notwithstanding. Apple will sell lots of iPod Touches to people who cannot use the iPhone for coverage or other reasons, but Apple will also sell a ton of iPhones. Expect to see a 16 GB iPhone soon at $499.
he would hate the cell business, 10 % of every single iphone bill goes to apple Steve is making so much money off the iphone and it is driving his stock prices up.
The article makes sense if you do not consider Apple Inc’s long term plans and intended focus for the keynote.
If you’ve noticed the keynote was quite long and a lot of products and information were being announced. Even if it is this was a Stevenote it is still essentially a souped up and more pleasant Powerpoint presentation and the shorter it is the better the more impact his words would have. I would consider ATT & T-mobile are words that did not merit stagetime as it would lengthen the special event even further.
Apple has an event in Sept 25 in Paris, France and that’s when I expect higher capacity iPhone and a HSDPA-based iPhone for Europe to be announced. Deployment may follow months later like the November launch for T-Mobile in Germany.
Ans: Yes he is!!!!!!!!!!!!
Because he knows something most people don’t know yet!!!!!!!!!!!!!!!!
Just remember PT Barnum !!!!!!!!!!!!!!!!!!!!!!!!!
Neil - “As soon as I saw the price cut flash across my screen, I IM’d my colleague (we both have iPhones) something like: “Apple is now going to sell a gazillion iPhones!” I think my first instinct was correct — thanks to the price drop, the iPhone is still the best iPod, AT&T notwithstanding.”
Disagree. The hatred people have of the carrier will override the purchase. I won’t touch the iPhone (it seems sweet) because of the carrier. I have no interest in the baggage the carrier will bring.
Hmm…. can we say iPod Touch, wireless internet….Skype??? What’s that oh yeah…skype connects through the internet. I wonder how long it will take till someone comes out with a skype enabled iPod Touch and a mic with headphone jack? After all if you could use an a mic on a normal iPod why not on the iPod touch?
NOW that would be a middle finger to the phone companies!
Haha, “Oh yeah…one more thing…” this is awesome, considering I’m hearing impaired, and although I do have a cell phone (from Cingular, which is now part of AT&T), I only use it for text messaging when I’m on-the-go. But now…i can has an iTouch?
Why? There’s other phones out there that are open, why couldn’t Apple so that?
The article ignores on important point that sort of negates the argument.
Jobs said right at the start of his presentation (it wasn’t a keynote BTW since it did not start a conference or meeting… nitpicking I know but that’s just me) that they were there to talk about music. The price drop announcement was a tiny little bit of info that got thrown out. Sure it was of great importance but it wasn’t the thrust of the presentation.
Perhaps At&T and T-Mobile weren’t mentioned specifically to avoid that percieved tension.
Look, if a cell industry analyst watches a presentation on music and there are 150 words about a cell productyou can be sure he is going to pick apart and parse every other word to make it fit his suppostions about “how things are”.
Of course, he is a man with vision and that suggests he want to consolidate mobile, ipod, and any handheld portable device into one. And he always keeps user friendliness as first priority.
“Carriers: I hate you. Customers: Here’s the iPhone without having to deal with them, and an extra 8-gigs of memory to play with while you’re at it.”
I disagree. Anyone who buys the iTouch is a complete idiot. Why would buy a device that doesn’t have the all the features of the iPhone? Besides, the new iPhone is coming out on Nov. 9th.
What a croc of crap. I just saw a european add for the new iphones that are coming there w/ 3g speeds. It sounds like you haven’t even used the phone by your descriptive phone capabilities. Visual voicemail is the hottest thing ever. True the att service sucks. Im sure when they release the 3g models in november at 8 and 16gb sizes, they will for sure work on sprint or verizons evdo/cdma network. So piss off
@ Derek: Cuz the Touch gives you all the good parts of the iPhone without the bad (like, ya know, the phone parts, and the bills).
Jobs has himself become one of the “orifices” he claimed to hate.
Phone locked to one carrier.
Stealing subsidies from the user.
Preventing personal ringtones.
Not opening the phone to development.
Trying to brick hacked phones with third party applications or personal customization.
And people call Verizon a control freak. He makes them look angelic.
The IPhone was originally for cinguar. Since cingular is now ATT it seems to be going down the tubes. customer service also seems to be completly uncaring. The actual “bars” also seems to be poorer. lastly the plans are rediculous. I completly see why Steeve is hating the phone bussness
disagree?!?!?!?!?!?!?!? email me “jmarino1124@hotmail.com”
Watcher above is on to something, especially with the news that (a) the Touch is going have crippled versions of iPhone apps like Contacts, Calendar etc, and missing others like Google Maps, and (b) Apple now says updates to the iPhone will “most likely break” any 3rd party apps on the phone. Now the second of these points you could probably chalk up to throwing a bone to AT&T, but why cripple the Touch if you own it outright, unless you’re playing your own marketing-driven customer-lock-in games. I love Apple products but Steve’s no patron saint of consumer freedom. He’s a benevolent despot, and getting less benevolent all the time it seems.
I want to know why T-Mobile wasn’t chosen? Or, if they were the first choice, why didn’t it work out? Did t-mobile not want anything to do with Apple? Was Apple to demanding, or was it t-mobile? I’ve been with T-Mobile since it was Voicestream. I’ve been happy with the service and coverage since. The Customer Service is excellent, in my opinion. I’ve never heard any of my friends complain about tmobile when they had it, but when they switched over to cingular, at&t, verizon, and sprint, they had nothing but problems - phones not working right, outragous bills, and poor customer service. I think the Biggest mistake Apple made, was not going with T-Mobile, or at least not succombing to their demands. Cause, if the iPhone was with t-mobile, I would so have one right now. But, there is no way in hades that I will ever switch from t-mobile. So, in five years I will be getting an 4th? or 5th? generation iPhone… unlocked, or offered by tmobile.
Being a huge apple fan, I love the iphone. But of course I don’t like how it is with at&t. I have been with sprint almost my whole life, and i’m not going to switch now. I think steve jobs made a horrible mistake by just useing one cellular service. If the iphone had other sevices too. They’d sell around 1 milllion more iphones and I would probalby have one if it was with sprint.