Will the iPhone fail?

David Platt on his Shockbusters blog wrote a pretty bang up article about why the iPhone will fail. He makes some good points but fails to factor in one thing...a newer smaller phone which removes most, if not all, his arguments from being valid.

Honestly, I was surprised there weren't two phone to begin with. I thought there'd be a MacPhone and MacPhone Pro when they made their big annoucement. The Pro being the current iteration of the iPhone.

Anyway, one thing a lot of people are overlooking as a failure point for the iPhone is something not related to Apple at all. That failure point? AT&T.

A bit of disclosure here, I worked for, at the time, AT&T Wireless for about 18 months while I was in college. For the most part, it was a pretty solid experience. Sure, there were things I didn't like, but there were also a lot of things I did like working there.

When I first started working at AT&T Wireless we were still on the TDMA standard. This was the 2G standard that most of America used. Then, the transition to GSM came. I had a GSM Ericson phone and liked it. I then got a Nokia GSM phone and liked it even more. However, this was back in 2002-2004, before using my phone for data was still something new, and as far as the US market went underdeveloped.

However, things are different now, and phone really push the internet thing, none moreso than the iPhone. The problem is, what happens when this service sucks? In the case for AT&T, they may have been one of the first to push GSM mainframe, but they have floundered when it's come to data speeds.

The fact is the CDMA networks are much better than the GSM networks when it comes to data transmission. In addition, GSM voice and phone quality can arguably be considered more reliable, regardless of what commercials say. A phone is worthless if the service doesn't work for it. THat's what I'm worried about for the iPhone.

AT&T is in a state of flux and catch up. Their data network is slow, and their call quality and customer service quality is in the rear end of the market. However, they now have the hottest product in the market. Anyone should be able to see this catch-22.

What happens if more people come over, specifically for the iPhone, and AT&T can't give them a good experience? Well, for one they're stuck with an expensive device they can't use. They try to leave they get nailed with a 175 dollar ETF. I mean, in the worst case they could be out like 2 grand after a two year contract.

What if the end result of this is that Apple has the best phone in the market that no one wants to use? I think this is a real possibility. If this goes bad, and AT&T get stigmatized, no one will come back to them. A 5 year exclusive contract is worthless if everyone leaves after 2 years and doesn't come back.

I hope Apple has an out in that deal in case a worst case scenario happens. However, the data network is one of the reasons Apple pushed to have the WiFi aspect of the phone pushed so hard. Fact is, they'd almost rather you forget you're even using AT&T to get data, and try to use WiFi as much as possible. WiFi is fast, AT&T's data speed isn't.

I'm pretty sure this won't happen, but it is a possibility. AT&T is working on getting their data network to speed up, but who knows how that will end up.

-Steve