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Chiefs of Apple and AT&T defend their iPhone choices

Chiefs of Apple and AT&T defend their iPhone choices
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First Published: Fri, Jun 29 2007. 11 36 AM IST
Updated: Fri, Jun 29 2007. 11 36 AM IST
San Francisco: On the eve of the Apple iPhone's sale, the two top executives of Apple and AT&T defended their decision to rely upon AT&T's slow edge wireless data network, rather than a faster network that is less widely available.
Early reviews of the iPhone, while positive, have faulted the slower network because it will limit the palm-size wireless computer's greatest strength -- making the Internet easily accessible on the go.
"It doesn't concern me," said Randall L. Stephenson, the AT&T chief executive, in a joint telephone interview with Steve Jobs, Apple's chief executive. The fact that the iPhone offers faster Wi-Fi networking would more than make up for the relatively slow 300-kilobit-a-second pace of its cellular data network, he suggested.
The phone goes on sale on Friday (29 June) at 6 p.m. at Apple and AT&T stores.
Both executives said they were not certain what to expect at the stores on 29 June , evening. Lines have begun to form in some parts of the country, but there is uncertainty whether a $500-to-$600 consumer product can attract millions, rather than tens of thousands, of early customers.
"We've certainly built a lot of iPhones, although it may not be enough," Jobs said. Changing forecasts in the consumer electronics industry is difficult, he said, because of the long lead times necessary to build components like semiconductors.
And Stephenson said, "I think it's going to be an exciting evening." He said his company had added about 2,000 employees in an effort to handle what it expects will be large crowds.
Jobs said Apple planned to limit sales to two for each customer, and Stephenson said AT&T would restrict purchases to a single phone.
Concerns surrounding the AT&T network could be one of the biggest unknowns as the product rolls out. That did not diminish Stephenson's enthusiasm.
"I got to tell you, carrying this thing around and experiencing those kinds of speeds on a wireless handset, your imagination begins to run in terms of what's possible," he said, "and by the way, there's not a 3G network available in Ottumwa, Iowa," referring to the third generation of web-enabled cell phones that require faster networks. "If you want to sell these devices in a variety of places. Edge is the only opportunity you have," he said.
AT&T has invested $16 billion into its network over the past two years and it is now designed to handle the expected increase in wireless data users, he said. "Capacity won't be an issue. The network is ready."
The decision to hold off on using AT&T's faster HSDPA network was a tradeoff, said Jobs. "Edge is good, but you'd like it to be faster," he said. The availability of local Wi-Fi networks would make up for the slower speed of the Edge network.
Jobs also said that Apple's hardware design team had decided against using the more advanced 3G chip-sets because were relatively power hungry. As result, Apple improved the battery life of the iPhone.
"We felt it wasn't the right tradeoff now," he said. "I'm sure that will all change in the future."
The iPhone could have an impact on the cell phone industry akin to the influence the company's Macintosh had on the personal computer industry in 1984, Jobs said. The iPhone's "multitouch" control system, in which the fingers are used to scroll through data or enlarge photos on the screen, was the biggest shift in a computer's user interface since the Macintosh was introduced, he said.
"It's the first thing to come a long since the mouse and the bit-mapped display and take things to the next level" he said.
Jobs seized on the multitouch technology after Apple product designers proposed it as a "Safari Pad," a portable web surfing appliance. Instead, he saw the technology as something that could be used for a similar purpose in a cell phone, said a former Apple employee.
The two executives said they were comfortable with the unexplored implications of the business relationship they have forged. In a break with the tradition of the cell phone industry, Apple is taking responsibility for the activation of the iPhone as well as account maintenance through its iTunes software on a customers' Mac or PC. Account control has been jealously guarded by the cell phone carriers.
"That's what the customers want and you can give them a good experience," Stephenson said. "Why would we not do that? I like this model a lot."
"We're doing the front end and AT&T is doing the back end on the same computers they would normally use to manage their network," said Jobs. The new system would create a "higher velocity" of serving customers, he said, permitting store personnel to help people more rapidly by letting customers handle the set up themselves at home.
Jobs also hinted that there would be announcements about services for corporate users within several weeks. "There's already corporations who have been running pilots hooking up to exchange servers and other kinds of mail servers and they have gone very well," he said.
Neither man was willing to describe where the partnership between the two companies might lead if it turns out to be a success. AT&T has partnered with Microsoft as part of its effort to enter into direct competition with cable companies, but Stephenson acknowledged that he was intrigued by Apple's Apple TV system.
Recently, Jobs referred to the system, which is intended to transfer Internet video to televisions and computers, as a "hobby," suggesting that Apple is still refining its strategy in the market.
Stephenson, however, said, "AT&T is interested in anything that drives more bandwidth requirements and Apple TV drives significant bandwidth and the iPhone drives significant bandwidth, and so I think it's a very logical fit."
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First Published: Fri, Jun 29 2007. 11 36 AM IST
More Topics: iPhone | Apple | AT&T | 3G chip-sets | Technology |