Apple, Business, Companies

Why Apple is really staying with AT&T in the US


This morning while I was skimming around the internet I came upon an interesting article. It was posted over at the Tech Review Source and talked about the possibility that Apple will stick with AT&T for the Next Gen Phone.

In this article they cite Apple?s commitment to AT&T with the launch of the iPad. Many had thought that this would have been an excellent chance for Apple to begin the migration to another [and perhaps more reliable] partner. For some reason Verizon was seen as the carrier of choice. Now, I know that Verizon and Apple have been battling back and forth for some time over who has the better network, but why Verizon? If you really want to get down to it there is no US Cell Phone Carrier that is any good.  Yes, yes I know everyone has the one they like but they all have their problems and issue. It does not matter which one you chose they will not work perfectly in every spot or location in the country [or world].

The article at Tech Review Source does try to go into detail explaining that Apple would not want to use Verizon due to its continued use of CDMA. This older technology has many limitations that apply to the iPhone directly.  One of the ones that is commonly brought up is the simultaneous Voice and Data issue. However, that can actually be done over CDMA if you use EVDO Rev A [or B], in fact the CDMA Development Group announced this last year in August as SVDO. The SVDO protocol allows for a 1x Voice circuit alongside a 1x EVDO data connection. This technology will begin appearing this year [late 1H or early 2H] and will remove the limits that currently exist on CDMA 2000 networks like Sprint and Verizon.  More to the point the iPad does not have voice services so there was no technical reason for Apple to stick with AT&T, at least not for that device.  The iPhone does have that limitation though due to its GSM hardware.

The other side of the coin is GSM Vs CMDA 2000. AT&T and T-Mobile use GSM while Verizon and Sprint use CMDA2000. As it stands right now the iPhone is GSM only, Apple did not include the CMDA hardware so you are stuck with GSM unless Apple chooses to develop a multi-protocol phone [highly unlikely]. Still you have arguments over CMDA Vs GSM popping up all the time. The biggest thing that GSM has in its favor is its global acceptance. Outside the US you will have a hard time finding a CDMA carrier; yes there are a few [I believe India and many countries in Africa use CDMA] but for the most part you are in GSM territory.   

Now, if you are following along at home you may notice a few things. One of the first is that any move to another carrier contains a cost to Apple. This comes in two forms, a move to Sprint or Verizon means a greater cost in hardware as they would need to either make two types of phones or ones with hardware to support both GSM and CMDA. Of course they could just bump up the price of the phone to cover this but that actually could hurt sales if they had to push it up too far. The next impact to Apple?s revenue stream in in subscriber fees; as it stands Apple gets quite a bit of money from AT&T and their monthly charges. If they moved to another carrier they will not get the same amount. Even if they did not have to build different versions of the iPhone and went with T-Mobile they would lose a good deal of money in the switch.

So, we see that the real reason for sticking with AT&T is money, plain and simple. This is not a big shock and I know none of you were surprised to hear it. In fact the whole issue is not relevant until you tie it in with Apple?s public image and their PR machine. Remember that Apple runs on the premise that they always chose the best hardware and software for their customers. It is an image they put forth at every event and in every ad. So how does this image tie in with the real world? It simply doesn?t. Apple is like every corporate entity on the planet. They are in it for the money any other notions are pure fantasy.

So when you buy your iPhone, iPad, or any other iDevice; just remember that while you are buying what is probably going to be a very cool gadget, it is still a gadget that is designed to provide Apple with a continuous revenue stream and because of that you may have to put up with a few nuisances.