Why Did AT&T Execs Lie About iPad Data Consumption?

I've mentioned before how weird it was that AT&T execs dismissed the strain the iPad was going to put on their cellular system. Well, what should they have said? Kind of like what these European telecom executives say in anticipation of the UK iPad release:

iPad Will Consume Tons of Data

Now, we could credit this to a better educational system in the old country, or maybe that they hire smarter executives over there. But the real issue is not the lack of intelligence of AT&T's leadership, we already know it is subpar, but why it is they are so quick to simply lie when confronted with facts they don't like.

Even clueless AT&T exec's knew the iPad would put a strain on their system, and consume tons of data, but for various reasons they wanted to downplay it. I can understand that, but what I can't understand is how executives of a major telecom in this day and age think they can get away with lying to the public over matters they will quickly be proven to be wrong on. There's something very dysfunctional in that thinking and it seems to be a pattern in AT&T's entire operation. Lying to people that they are getting a rate cut, when in fact it's a rate increase, lying that a service contract is a good deal, when it's a bad one. Saying dropped calls are a design flaw in the iPhone. Saying they're going to come out with tethering when they have no intention to. This feels like an institutional problem, and they are going to be stunned at how quickly iPhone customer's flee for another carrier the moment they have a chance. Habitual liars are the last to know when people are fed up with their lies.

Now, of course, the European execs quoted aren't beyond distorting the truth. They say increased iPad traffic will speed up the switch to tiered pricing, something that they say is inevitable (it isn't). But at least they are consistent, AT&T execs desperately hunger for the scam of tiered pricing (the better to confuse and rip off it's customers) but they fumbled with the iPad like a liar who has told so many untruths they can't figure out what to say when confronted with the fact that nothing they are saying makes sense.

If tiered pricing is necessary for the "survival" of telecoms, the iPad is a device that absolutely would require it. AT&T execs should have said exactly what the European ones did. The iPad is going to demand a lot of data, and to "survive" we'll have to charge extra for it.

But tiered pricing is not enviable, and in fact makes no technological or business sense except as a way to inflate customer bills for short term profits. (Long term, it's better for customers to have access to limitedness data. The internet has already proven that time and time again.) Ironically, the fumbling of AT&T execs over the launch of the iPad may have killed any chance AT&T has of pushing through tiered pricing. It may be too late to put that horse back in the barn. And we can thank AT&T's knee jerk dishonesty for exposing that.

More on Sprint iPhone Rumors

The rumors of a Sprint iPhone continue despite the lack of any real confirmation:

Welcome Sprint iPhone

Barron's Apple/Sprint Deal?

Mobile Sprint Rumored

There is no "news" here, and no new here either. We simply have the repetition of a rumor which happens a lot about anything involving new Apple products. These things come and go quickly in the Apple gossip world. But something about this particular rumor is keeping it alive despite any new facts.

The thing is, it just makes a hell of a lot of sense. We've been waiting for some time to see what Apple's move is going to be in regard to dumping it's exclusive deal with AT&T. If it isn't true, then, boy, there was a missed opportunity. One thing that I don't think anyone considered until now was the huge value of free publicity Sprint would get (and which it needs) if it was the first carrier to have a non-AT&T iPhone. The publicity is worth millions already.

In fact, the publicity is so good, it's possible someone involved in Sprint might be behind the leak. Got no proof of that either, but it's interesting to think about. I'm still digging an I'll keep you posted.

Sprint iPhone: Why Apple Picked Sprint Over Verizon and Why AT&T is Crying

The internet is still buzzing about the news of a possible Sprint iPhone. Of course, the "news" is simply a completely untraceable and unverifiable rumor. So it's pretty irresponsible journalism to even treat this like a real story, let alone to devote any print to commenting on something that could turn out to be nothing.

But I'm not a responsible journalist, so fuck it. This is too juicy and fun to think about.

So lets just pretend that it's true. Let's say there really is a Sprint iPhone and it's going to be released next week. Better yet, let's say that not only did Apple make a deal with Sprint to provide service for the iPhone, but that it DIDN'T make a deal with Verizon, yet. Wow, that is news! (Or it would be, if it turns out to be true.)

So let's jump to the post (possibly imaginary) Sprint iPhone announcement commentary and analysis.

What a fuck you to Verizon! What a bitch slap to AT&T! Apple really is showing the telecom world who's it's daddy.

Everyone (especially anyone with an iPhone) knows that AT&T service seriously sucks, so it was just a question of time before Apple opened the iPhone up to other carriers. Remember, to a large extent, Apple originally made it's deal with AT&T exactly because they were bunglers. It was a second tier company that desperately needed a hot product. Verizon was the top company, and it was luke warm about the iPhone, and unwilling to make a deal on Apple's terms. Now, of course, the iPhone's enormous success lined the pockets of AT&T and gave it huge profits for several years and made it a strong number two.

Verizon is still the number one cell carrier in terms of market share, but it's profits have been in the toilet and not having the iPhone is the main reason. Clearly, Verizon needs to make a deal. At this point Apple can demand and get better terms. But how much better? Also, if Apple does make a deal with Verizon, it's possible that once Verizon sucks in some of that iPhone cash, it could look for ways to stab Apple in the back. Clearly these companies don't have a lot of love for each other and neither Verizon or AT&T are happy about how much they need Apple.

Enter Sprint. Sprint is the number three company and in serious trouble. It desperately needs to make a big move. And Sprint made it. It bet the farm on a 4g network and rolled it out well ahead of Verizon and AT&T. But what to put on that network? Is it possible Sprint made this bet knowing that it would get the iPhone once the network was ready?

Well, I don't have any inside information or sources. So let's just pretend I do. My inside source at Apple says that Sprint and Apple have been in deep secret discussions about this all along, and Apple knew it would come out with a Sprint enabled CDMA iPhone in June. Apple threw AT&T a bone by giving it an exclusive window on the iPad. (According to my imaginary source, a CDMA iPad will come out in time for Christmas.)

Which brings us back to Verizon. One of the key reasons Apple hasn't had a Verizon iPhone is that the iPhone chipset is GSM rather than CDMA. Since most of the world is GSM, it made a lot of sense for Apple to focus on that market first. It was a brilliant move. But if Apple comes out with a CDMA iPhone for the US market why not give it to BOTH Verizon and Sprint?

That's were the fuck you to Verizon comes in. My imaginary sources at Apple say Steve Jobs is still pissed off that Verizon has tried to play hardball in negotiations for so long, and, he's still pissed off at AT&T for just sucking up iPhone profits and not reinvesting in a better network (Which the iPad in particular needs). So making deal that allows Sprint first crack at the new iPhone is great revenge. Moreover, propping up the third place telecom makes sure there will be plenty of competition in carriers in the foreseeable future which is very good for Apple.

This is bad news for both Verizon and AT&T. Those companies would prefer if the cell phone business was an Oligarchy with only two top bosses. A resurgent Sprint is not in either of their best interests. If Apple had come out with only a Verizon iPhone, or even let Sprint and Verizon have them at the same time, Verizon could continue to use it's size to take away market share and hopefully Sprint would fade away.

But the publicity of being the first non-AT&T iPhone is worth millions in advertising for Sprint, much more than for Verizon. It really makes Sprint a major player again. And what can Verizon do if Apple says it can't have the iPhone until months later? Nothing. Absolutely nothing.

Talk about playing hardball. But that's the way Apple rolls. Let's be realistic, these telecoms have been ripping off customers for a long time, fighting technology and fighting the future. Well, the future just landed on top of them.

We'll find out next week if any of this is real, but boy, I sure hope so! I'm looking forward to my Sprint iPhone and put a Sprint iPad on my Christmas list!

UPDATE: Here's a piece predicting a Verizon iPhone won't come in June, but saying nothing about a Sprint iPhone.

No Verizon iPhone at WWDC

Best Buy to Sell Sprint iPhone? Goodbye AT&T!

So this is just a rumor, but it's one I really believe. An anonymous Best Buy employee says that Sprint will be offering an iPhone for it's service this June:

Best Buy to Sell Sprint iPhone?

This is just weeks away! Now, why do I believe this, since there isn't really any proof? Well, first off, Apple absolutely needs to open the iPhone up to other carriers, and soon. The Android is finally getting some traction, and the hatred of AT&T by iPhone users has gotten to a point where Apple is starting to look bad by sticking with them.

Also, Sprint has been running ads already touting how iPhone users (and iPad users) can use their wireless hotspot to connect to the internet faster than AT&T's 3g network.

Finally, Sprint has the only up and running 4g network (AT&T decided to wait on upgrading, the better to line the pockets of it's executives in short term bonuses). Sprint actually makes a better choice for Apple than Verizon. Verizon, because it's the biggest carrier, has been more demanding of terms for any deal with Apple. And Apple is a company that doesn't like to get pushed around.

Finally, Sprint really needs the iPhone. The company bet the farm on 4g, and it had to be working hard behind the scenes to get the iPhone. It didn't run those iPhone ads without checking in with Steve, I'm sure.

So how long will it take Uncle Bell to dump AT&T once Sprint offers up a 4g iPhone?

Faster than you can said: buh-bye!

AT&T's Doesn't Get it: Part 2,871

AT&T's shortsightedness and greed reached a new height… scratch that…

AT&T's shortsightedness and greed unpredictably… scratch that…

As usual, AT&T's shortsightedness and greed are evidence in it's latest attempt to piss of it's most important customers to make a quick buck:

In Advance of New iPhone, AT&T Raises Rates to Buy One

So you're a loyal AT&T iPhone customer. Want to buy the new one? Pay extra. Want to buy a crappy non-smart phone no one wants, play a little less.

Unbelievable. No… scratch that.

Typical.

AT&T Finally Learns to Stop Hating and Love the iPad. Or Does It?

AT&T executives are finally backpedaling (a little) from damning the iPad with faint praise. Today, at the JPMorgan tech conference, Ralph de la Vega, CEO of AT&T Wireless, gushed about the iPad. He said that it had "changed the way he worked."

So is AT&T finally on the iPad bandwagon? Do they realize they have a once in a lifetime opportunity to be a leader in providing service to a ground breaking cloud computer? Well, no. Ralph went on to say that he personally uses his iPad on wi-fi but that "if customers want 3g, we'll give them 3g." He told a story about using the wi-fi on his flight to empty out his e-mail box with the iPad. Nothing, zilch, about him using his own AT&T wireless service, even in an emergency. (Did he buy the iPad without 3g?) Let's repeat, the guy in charge of AT&T wireless talks about how he doesn't use his own service on the most important new wireless enabled product of the year and probably decade. One that AT&T is the EXCLUSIVE service provider for. (But he is a great advertisement for wi-fi services on airplanes, which, to my knowledge, AT&T doesn't provide.)

Ah, yes, the idiocy at AT&T never ends.

I'll admit his comment is an improvement over his boss AT&T CEO Randall Stephenson's incredibly moronic prediction that the iPad was a "wi-fi" device. At least Mr. de la Vega acknowledges that "some" people might want 3g, which AT&T sells.

But it's kind of like the head of Exxon talking about how much he loves his new BMW. He prefers to sit in it in the driveway, but if "customers want to drive one around, I guess we can sell them gas." Yep, nice that car thing uses gas and it just so happens Exxon sells gas, but it sure looks good parked the driveway. Or perhaps the president of the peanut butter division of a food company saying, "I like my bread plain. But if people want to put peanut butter between two slices, well that's okay too."

The crazy thing is, that in the past AT&T execs have talked about how they want sell people data per bit (with tiered pricing) like "water." Well, the iPad needs data like a fish needs water. So why aren't AT&T execs more excited about offering service for it? Oh, right, it's one price for all the data you want. And what about those evil "data hogs" that we're ruining AT&T's iPhone service for everyone? No iPad "data hogs" on the map yet?

I've mentioned before the reasons why AT&T hates the iPad and Mr. Stephenson would have been perfectly happy if it had turned out to be a failure. But the game is up. The iPad is a massive success, and, yes, the 3g version is selling out like crazy. Time for AT&T to wake up and embrace it.

Now, I suppose when your boss says something incredibly stupid, you can't just turn around a couple months later and completely contradict him. So maybe this was just Mr. de la Vega gently back pedaling for the entire company. "Did we say no one will use 3g? What we meant was, it's okay if people want to." But would it really be so difficult to say something like: "I used mine at the airport on the 3g AT&T service, then seamlessly switched to wi-fi on the plane." Even if it isn't true, can't you be a little better of a salesman? Can't you at least throw a bone to Apple fans who can't stand that your company has exclusive rights to our technologies connections and yet acts clueless or worse? Even if your 3g service sucks, can't you say something like, "in a pinch, 3g is better than no connection."

More importantly, doesn't anyone at AT&T get what an important new tool this is? Is AT&T the ONLY company in the world that isn't working on exciting products for it? Isn't it time for AT&T to have something more to offer for it's iPad customers than 3g (if for some crazy reason they want it). Like apps, additional services, checking iPhone messages, VoIP? Or at least an announcement of them "coming soon"?

Why don't you think about that, Ralph, next time you find your e-mail box empty?

Where is AT&T's iPad Strategy? Maybe It's Time to Come Up With One

So it's no surprise to Uncle Bell that the iPad is a huge success, and even less of a surprise that the 3G version is also a best seller. This despite AT&T CEO Randall Stephenson's prediction that the iPad was a "wi-fi" device. Nope. The 3G version is selling great:

3G iPad's Sell Out Fast

What's particularly interesting in the above article is that it references a survey saying that customers are particularly interested in the lowest priced 3G version, the 16g. What this says is that it's more important to customers to have connectivity than storage. So yep, the whole cloud computing thing is happening fast, and people get that the iPad is a cloud computer (unlike the iPod). It also says that the people who are standing in line and getting on waiting lists for the 3g version aren't just a bunch of rich Apple fans who are buying the most tricked out version they can. These people don't want to throw their money away, they just understand that a 3g iPad is more useful than a wi-fi version. So budget minded people are not only willing to pay $130 extra to be connected, they are willing to pay that for the chance to spend an extra $29.95 a month in service.

It's still a little early to fully eviscerate Mr. Stephenson for his incredibly moronic iPad prediction… well, no. I guess now it is time.

The announcement that the 3G version is selling out should be great news for AT&T, but it isn't, and not just because it makes Mr. Stephenson look like a boob for saying stupid things. The iPad is very bad news for AT&T as I pointed out in an earlier post, Five Reasons AT&T Fears and Hates the iPad. It could be the beginning of the end for AT&T's hold on Apple iPhone customers. As I also predicted, many people are considering the iPad to be an iPhone alternative, mostly due to their hatred of AT&T service pricing and contracts.

Of course, it doesn't have to be that way. The iPad could be a huge opportunity for AT&T to expand it's customer base and influence. The problem is it would require a major change in AT&T strategy to take advantage of what should be a competitive lead. First, AT&T would have to FIX IT'S SERVICE. Something it doesn't seem to be willing or able to do. So instead of giving AT&T a change to bring in a new range of customers, the iPad is likely to introduce a growing number of people to the cult of hating AT&T service and desperately lobbying Apple for an alternative. It would also require AT&T to give up dreams of tiered pricing, addiction to abusive long term service contracts and locked down devices. It would also require AT&T to invest in innovative services for the iPad, to lure customers to spend more than $29.95 a month. None of which AT&T's clueless leadership seems to be willing to do. After all, they think it's a "wi-fi device."

So this is what I'm predicting, AT&T will continue to have no iPad strategy, will continue to downplay it's importance because it can't understand what to do about it, and will force Apple to unlock the iPhone and give competitors a shot at the iPad. Short term, AT&T profits will be great, boosted by the success of the iPad, but the company will be suffer enormously once it has real competition for Apple customers. AT&T might not even survive once the iPhone is unlocked, since it's so dependent on iPhone profits. At minimum, what should be a huge opportunity to be a leader in servicing cloud computers will be thrown away.

So, Mr. Stephenson, time to admit you were wrong. The iPad is a mobile cloud computer that needs good 3G service. If your company doesn't provide it, another will. And meanwhile, thousands of companies are rushing to create great products to take advantage of the iPad, while you company is silent about the issue. Maybe it's time to Rethink Possible.

iPad Sucks on AT&T Service (No Surprise)

Well, the 3G iPad just started shipping and, predictably, we already have our first AT&T service sucks blog story:

AT&T Blocks Video on iPad

Too early for Uncle Bell to tell if this really is an AT&T problem or a glitch or possibly Apple being overly cautious, but AT&T should have prepared for what is going to be a coming storm of criticism of it's iPad service. The comments section on the post features a lively discussion about who is to blame. Recommended reading, but I couldn't come to a firm conclusion.

I do have to reprint this one comment on the post by Jfrank:

"i worked for AT&T, all entities, as a consultant for years. They still have a utility mentality, and their decision makers are too old and too anti-deluvian to make smart consumer decisions.

As one poster said here, at least Rogers opens their pipes. Hell, in Japan, you can get 200 MBPS over your phone for $29/mo. The USA is soooooo behind-the-eight-ball when it comes to networks that it’s laughable."

Yep, couldn't have said it better myself.