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Summary:

I was just reading an official AT&T press release, which tells us what we already knew: The carrier is doubling its 3G network speed over the next year or two. This effort will raise the theoretical speeds from 3.6 Mbps to 7.2 Mbps, although in the […]

logoI was just reading an official AT&T press release, which tells us what we already knew: The carrier is doubling its 3G network speed over the next year or two. This effort will raise the theoretical speeds from 3.6 Mbps to 7.2 Mbps, although in the real world we generally see half of that throughput.

Although it seems unrelated, I started thinking about Apple’s iPhone relationship with AT&T and the swirling rumors of other U.S. carriers getting a crack at the iPhone in the future. I don’t think it’s going to happen and a large part of my belief is due to AT&T’s network upgrade plans.

Apple wants its device to shine. For that to happen, three things have to come together like a mobile symphony: hardware, software and the network. Apple covers the first two and depends on AT&T for the third. But it’s been severely let down in some areas of the country, in ways that have caused some to divorce their once true love.

With today’s news, we know that AT&T is spending upwards of $18 billion for this effort along with other network enhancements and offerings. That means not just the bits at the existing cell towers, but more cell towers (2,100 this year) and fiber-optic backhaul to the towers for greater capacity. T-Mobile is the only other U.S. carrier using GSM and HSDPA technology, but it just doesn’t have the footprint offered by AT&T. Verizon and Sprint are on CDMA technology in the near term or are embracing WiMAX services for 4G, so there’s no reason for Apple to go there right now.

Rumors and discussions will likely continue, but I’m thinking that Apple is happy with today’s AT&T news. Happy enough that for another few years it’ll keep the iPhones right where they’ve been all along in the U.S. Once widespread LTE deployment starts by both Verizon and AT&T, the stage could change actors, but it’s too soon to say.

Oh, one other potentially relevant tidbit was tucked in the AT&T news: “AT&T will introduce multiple HSPA 7.2-compatible laptop cards and smartphones beginning later this year.” Makes me wonder if I was right when I said that the next iPhone might support AT&T’s faster network. The phone is likely to be ready before the network, but there’s no reason the hardware can’t already be hidden inside, just waiting for activation of the faster speeds.

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  1. Shawn Roberts Wednesday, May 27, 2009

    If Apple doesn’t put the software for the upgraded network in the phone, then it has a reason for people to buy new iPhones next year.

    Problems with the ATT are well-documented. Does the upgraded speed of the network mean better network coverage? I hope the answer is yes but I am afraid the answer is no.

    1. Additional network coverage won’t come from the upgraded speeds, but it will from the 2,100 new cell towers they announced.

  2. It’s probably going to become a multi-carrier phone as soon as 4G is out and established

  3. Apple wants to own the living room and needs to distribute its handsets as widespread as possible. Apple needed exclusivity until they reach/reached a certain profitability run rate that would allow mass adoption of the handset but it wont last forever. On the flip side, AT&T’s Cap Ex per sub has been lower than all of the other major vendors as it stopped investing in the network to maintain profitability. It seems like this was the ante to maintain exclusivity rather than the winning card that would ensure it.

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