Apple Inc.’s announcement Wednesday that its upcoming iPad tablet computer will connect to the Internet through AT&T Inc.’s 3G wireless network was a big win for the Dallas-based telecommunications company.
In fact, many people had expected Wednesday to be something of a bloodletting for AT&T.
When Apple made AT&T the exclusive U.S. carrier of the iPhone three years ago, it was a huge boon for the phone company.
Its wireless division has seen its sales soar over that time, hitting $13.7 billion in third-quarter 2009, up from $10.9 billion in the third quarter of 2007. AT&T releases fourth-quarter 2009 results today.
But as the iPhone became more popular, customers complained that AT&T’s network was creaking under the strain of so many new users downloading a flood of music, video and other data.
AT&T has acknowledged network problems in New York and San Francisco but said that overall its network has held up well as it has invested billions of dollars to upgrade its coverage.
Still, the volume of complaints led many to speculate that Apple would bestow the iPad on Verizon Wireless, and perhaps also announce a version of the iPhone for Verizon’s network. But neither happened Wednesday.
Earlier this week, during a conference call to discuss Apple’s strong first-quarter financial results, Apple chief operating officer Timothy Cook defended AT&T’s performance with the iPhone.
“AT&T is a great partner,” he said. “I think it is important to remember that they have more mobile broadband usage than any other carrier in the world. In the vast majority of locations, we think that iPhone customers are having a great experience, from the research that we have done.
“As you know, AT&T has acknowledged that they are having some issues in a few cities, and they have very detailed plans to address these. We have personally reviewed these plans, and we have very high confidence that they will make significant progress toward fixing them.”
Independent telecom industry analyst Jeff Kagan said the iPad-AT&T linkup indicates that Apple still has faith in AT&T.
“I think Apple is saying they understand the problems AT&T is having are due to Apple and not AT&T,” Kagan wrote in an e-mail. “Other networks don’t have the kind of record-breaking demand on their networks that Apple’s iPhone puts on AT&T.”
A Verizon version of the iPhone could still be in the works.
Wednesday, though, was nothing but good news for AT&T. But the company was surprisingly reluctant to talk about its good fortune.
When contacted Wednesday by The Dallas Morning News, the company said it had a short official statement but could only deliver it over the phone and not by e-mail.
“We have a great relationship with Apple, and we’re delighted they have announced AT&T as the 3G U.S. network provider for iPad,” AT&T said.
The company declined to discuss how it negotiated the iPad deal with Apple or whether the iPad will run Internet voice programs like Skype, and it would not answer any other questions related to the device.
It’s possible that AT&T will answer some of those questions today during its conference call to discuss its quarterly earnings.
source: dallasnews.com
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