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Apple defends AT&T, says partner will fix iPhone problems

After seeing AT&T's fix-it plans, Apple has 'high confidence' they'll do the trick

January 26, 2010 02:39 PM ET

Computerworld - Apple Inc. executives yesterday again stuck up for their exclusive U.S. iPhone partner, AT&T Inc., and said that they approved the carrier's solutions to long-running problems handling iPhone traffic.

During Apple's quarterly earnings conference call with Wall Street analysts on Monday, Gene Munster of Piper Jaffray & Co. asked about AT&T's troubles. "AT&T has had a lot of bad press here recently, and obviously that impacts your brand," Munster said. "Can you remind us what the benefits and the virtues of sticking with a single carrier in the U.S. are?"

Tim Cook, Apple's chief operating officer, repeated what the company has said before: "AT&T is a great partner."

He also downplayed the "bad press" that Munster alluded to. "I think it is important to remember that they have more mobile broadband usage than any other carrier in the world," said Cook. "In the vast majority of locations, we think that iPhone customers are having a great experience from the research that we have done."

Many iPhone owners would disagree.

They've complained about AT&T's network since Apple unveiled its smartphone in June 2007, and they ramped up their sniping after the July 2008 release of the iPhone 3G, the first model to use AT&T's faster data network. A dozen lawsuits from consumers tired of their iPhone 3G devices constantly dropping calls or having trouble connecting to AT&T's network are still pending, although they were consolidated by a federal judge last summer.

Apple's Cook admitted that AT&T service isn't trouble-free, but he said the carrier is on the case. "AT&T has acknowledged that they are having some issues in a few cities, and they have very detailed plans to address these," Cook said yesterday. "We have personally reviewed these plans, and we have very high confidence that they will make significant progress toward fixing them."

AT&T has conceded that its network has suffered performance problems in Manhattan and parts of San Francisco, but it has promised to address the situation. "You'll see this is going to be fixed. We'll do a lot better," Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, said during a December 2009 financial conference.

There's an app for that

AT&T has taken other steps to address its service problems. Among other things, it released an iPhone application that lets customers submit complaints of poor reception directly from their smartphones.

Many analysts believe that AT&T's exclusive contract to offer service for the iPhone will end this June, three years after the debut of the original model. Even so, Apple has continued to defend AT&T when it came under attack by Verizon, the rival most often mentioned as the likely addition to the list of carriers allowed to sell the iPhone. Apple television advertisements last November, for example, stuck up for AT&T as Verizon belittled the carrier's 3G coverage in a still-running campaign.

AT&T relies heavily on the iPhone to boost its subscriber numbers, according to Brian Marshall, an analyst at BroadPoint AmTech. Marshall estimates that the iPhone is responsible for over 90% of AT&T's net additions to its customer rolls. "The iPhone is by far the single most important driver of the postpaid subscriber addition market in the U.S. today," Marshall said in a research note recently released to clients.

Apple sold 8.7 million iPhones in the quarter that ended Dec. 31. That's a 100% jump over the number sold during the same quarter a year earlier and almost 1.4 million more units than the previous quarterly record of 7.4 million, which was set in the quarter that ended Sept. 30, 2009.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at Twitter@gkeizer, send e-mail to gkeizer@ix.netcom.com or subscribe to Gregg's RSS feed Keizer RSS.

Read more about Mobile/Wireless in Computerworld's Mobile/Wireless Topic Center.



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