by Jack Roviere

Created on: July 25, 2010

In the past few years, AT&T has decimated its credibility, and many believe that choosing AT&T as the US carrier for the iPhone was Apple's biggest mistake. But is it completely true that Apple made a mistake choosing AT&T, or was AT&T actually the most sensible choice?

Apple is not a company that makes too many mistakes these days, and there is little reason to believe that AT&T was a mistake for them. In fact, AT&T was the right choice for an iPhone service provider, and here's why.

Imagine that you're Apple circa 2007. You want your product to be available to the widest market of consumers. So who do you go to? In the United States, in the early part of 2007, both Verizon and AT&T vied for the spot as carrier with the greatest number of subscribers, with Verizon's 56.8 million subscribers slightly edging out AT&T's 56.3 million. What we know now is that Apple actually went to Verizon first with the iPhone offer, and Verizon rejected. The reason? Verizon had been used to nearly every other phone creator - especially the established manufacturers - playing by its rules in terms of profit sharing, phone software control, etc., How could it be that Apple, a company that had never produced a phone before, was trying to call shots with a percentage of monthly cell phone fees?

So, Apple took its game to AT&T. AT&T was interested in a phone that could change the neck-and-neck battlefield and provide a clear advantage to its network, so even though AT&T wasn't too happy with Apple's requests (as a Wired.com expose has revealed), it begrudgingly went along.

At first, it seemed like the relationship would go swimmingly. The iPhone indeed brought a mass exodus of subscribers to AT&T. But AT&T knew from the outset that its network was already being taxed, and the new iPhone subscribers have used more data than previous phone users. So, AT&T users on average have experienced more dropped calls and other network mishaps and AT&T has received much of the blame.

Does this mean that AT&T was a bad choice for Apple?

Again, no.

Apple has successfully managed its PR so that most of the blame is on AT&T, but there is no denying that AT&T has given Apple a tremendous foothold in the market, both for the iPhone and for the new iPad. In addition, because of AT&T's use of the GSM technology, while neither Apple nor AT&T officially sanction the unlocking of iPhones, it has always been possible to unlock the phone and use with other cell providers, like T-mobile. Because GSM is an international technology, Apple has not had to significantly revamp the production of iPhones in producing models with radio frequencies required for other nations. Verizon and Sprint, as CDMA carriers, would have significantly limited the iPhone's potential in this area.

Since the iPhone has revolutionized the extent and amount to which consumers use data on phones, the question is whether any carrier could have avoided network connection from taking on the iPhone...and it is unreasonable to assume that Verizon could have fared much better than AT&T had. In the years since the iPhone has first released, Apple has raked in money hand over fist, to the point now that it is a company more valuable than Microsoft. On the contrary, AT&T has been dealt lasting blows to its credibility and reliability as a cell service provider. The question "Did Apple make the right choice in using AT&T for an iPhone service provider?" is a no-brainer - certainly they did. But the question, "Did AT&T make the right choice in choosing to provide Apple's iPhone?" is one that must haunt AT&T's executives to this very day.

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