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AT&T Mobility Chief: New 3G iPhone Is a Game-changer

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After months of rumor-driven frenzy, the much talked about 3G iPhone from Apple finally became a reality, promising yet another revolution in the mobile Internet experience. Offering a combination of great user interface with (slow) DSL-level speeds and location-based technologies, the new 3G iPhone is a game-changer.

Those are not my views; they come to use from Ralph de la Vega, president and chief executive officer of AT&T Mobility, the wireless division of San Antonio, Texas-based AT&T. A few hours after the release of the new phone, de la Vega chatted with me about the iPhone, its impact on location-based services, enterprise mobility and of course, the wireless web revolution it will unleash. Here are excerpts from our interview: [digg=]

Om Malik: What are your thoughts on this new iPhone?
Ralph de la Vega (RDLV): This device is a true game-changer. Why? The immediacy of the data at your fingertips is huge. Imagine, looking up anything, anywhere. It (3G iPhone) allows you to leave your computer at home. It totally and completely mobilizes your data. Before this device you weren’t really untethered, but with this you are. I think people have tried to build a $100 laptop, and here is a $200 phone that can do all that over 3G. It will have a big impact, and will be ubiquitous.

OM: What are the big changes you think it will bring?
RDLV: When I was at the last CIO Forum, I thought people would ask me about lowering wireless prices. Instead I had CIOs asking me about push mail and security on the iPhone. I imagine they were getting questions from people within their company. I think what’s going to happen is that small groups of developers will start writing applications for their enterprise, and this is going to lead to the mobilization of the enterprise like never before.

OM: Do you think today is a red-letter day for location-based services?
RDLV: Absolutely! I think you will see a whole lot of applications using LBS and there are entrepreneurs who are going to be building them. This is such a huge opportunity. I think it will be interesting to see the combination of social networking apps with LBS.

OM: Ralph, as I wrote earlier today, I think the biggest concern is the ability of AT&T to handle the 3G network traffic that would emanate as people start using this new 3G iPhone. What are your thoughts?
RDLV: We have tried to model the usage of the new phone and prepared the network accordingly. We have taken our 2G iPhone usage data and we feel extremely comfortable to be able to deal with the demand. We have a maximum throughput of 3.6 Mbps and soon it will be 20 Mbps. The core of the network is going to run faster as well.

As Steve Jobs said in his speech, our 3G networks already have Wi-Fi like speeds. There are built in checks. As Steve pointed out in his speech, files above 10 MB will be downloaded over Wi-Fi that is fed by broadband connections. I think most average users are just that average and use data accordingly. There are, of course, bandwidth hogs.

OM: It seems like this is a device that is ready for mobile video and there are a lot of applications being developed for it that encourage mobile video streaming. Isn’t that going to overwhelm your 3G network?
RDLV: Clearly streaming video is the largest bandwidth-consuming application, but it is still not clear how many people will view video on it. We will know when we see the data. We have built the network with a lot of capacity, and we have it in control in the short term. So if we have a problem in the future, we will have the data which we can use to fix the problem.

OM: What are you doing about the bandwidth hogs?
RDLV: We are letting the customers decide the usage.

OM: Has there been a change in the cost of data plans?
RDLV: The data plans are different on the 3G iPhone vs. the 2G iPhone. Consumers will pay $30 a month every month, while enterprises will pay $45 a month. This is what you pay us on other PDA devices such as BlackBerry Curve. The SMS messages are not bundled anymore, and you pay for what you want. Again, the prices are based on what you buy.

Related Link: Robert Scoble interviewed John Donovan, the new CTO of AT&T, about the 3G iPhone and a while slew of topics. Have a look on Scoble/ web site.

85 Responses to “AT&T Mobility Chief: New 3G iPhone Is a Game-changer”

  1. Does anyone realize how much more consumers are going to pay for the ATT Plans. ATT voice and data plan cost for the 3G iphone is a deal breaker for many people that I know. Sure, the phone starts at $200, but I don’t think people will go for it till ATT offers better service plans.

  2. Now text messages are not included??!! AND no stereo bluetooth and no support for a bluetooth keyboard. Wow, no wonder Steve Jobs had to play the commercial 2x during his keynote. He had run out of new features to talk about. I live in Maine where 3G is a non-issue. AT&T is in no hurry to bring 3G to this state or any area away from a big metro concentration so what did we get with this new iPhone? Not much except for more expense.

  3. Great post Om, and some EVEN BETTER comments!

    I recently blogged about the INSANE amount of coverage the BBC gave to the launch of the new iPhone (they gave it BREAKING NEWS status on their new site!) and got more visitors than ever before!

    You REALLY stir some geek-passion when you blog about either Apple, Linux or Microsoft.

    Jim Connolly

  4. I actually reposted this comment many times before. FYI
    Recently I browsed around about the location-based services (LBS). Most people believe it would be the next big thing or killer app. Quite a few others have different opinion. e.g.,

    Here I can possibly present one opinion from the consumer/end-user perspective, which I have posted in some other places too.

    Do we need LBS so badly?

    Before I really go to the details. Let me give a review of one simple concept and theory here, which are called “Home Range Concept” and “Traffic Pattern Theory”.

    Home Range Concept. It is a concept that can be traced back to a publication in 1943 by W. H. Burt, who constructed maps delineating the spatial extent or outside boundary of an animal’s movement during the course of its everyday activities.

    Traffic Pattern Theory. A people’s daily activity pattern is pretty regular, which comprises of several major events, such as school, work, home, shopping.

    As I remember, a technical explanation of traffic pattern theory can be found in a report by Stefan Schonfelder, STRC 2001.

    What happened here is if you are looking at the traffic pattern of a person, saying a full-time employed, 45 years, car, 3-person-household, one child, the regular activity route is so LIMITED. So, does this mean …

    A more detailed explanation of LBS for mobiles can be found by

  5. @Robert
    AT&T knows they can charge insane amounts of money, since it’s the iPhone, and people will be inclined to buy it anyway. AT&T is making it seem as if a 3G network is new technology, which, sadly, some people will believe.

    So basically the AT&T service plans for the iPhone are broken up, and more expensive? That’s great. Now my bill will be in the triple digits.

  6. This could be a deal if you’ve got a family plan. If my wife and I could both share unlimited 3G internet and share 200 text messages for $35 on top of our current plan, that would be a deal.

  7. Robert

    I don’t know about the average person but this is very expensive. My family was hoping to drop our land line and move exclusively to ATT but not anymore.

    Wonder if there’s a family plan?

    ATT is being a pig here, period, end of story.

  8. Justin

    My current iPhone is $20/month unlimited. Now they are saying $30/month for data ONLY? Add another $10/month for texting and you really have an $80/month phone + taxes people’s sell phone bills will be pushing $100/month!! That is out of control. I’ll never buy this thing I’ll keep my jailbroken original until Verizon or something comes out with a reasonable deal.

  9. No freakin way, this guy is saying that Texting is NOT included anymore?

    So my $60/m iPhone is gonna cost new 3G people $85/m for the same thing? Screw AT&T I’ll stick with this they can goto hell

  10. So the price of the phone goes way down but the data plan goes up and you have to pay for texting. Someone needs to do the math and figure out if that’s a fair trade off. Personally, I may have wanted to pay more for the phone and keep my monthly costs down.

  11. Jacob Varghese

    I love the phone, but I really think at this point it’s just too expensive for most consumers.
    $40 for 450 minutes
    $30 for unlimited data
    $15 for 1500 text messages (or $5 for 200 text messages)
    $85 for a heavy texter or $75 for a lite texter

    I think they charge way too much for data on a phone.
    If they are going to charge $30 for unlimited data, then it should include unlimited texting as well.

    If you have a family of iphone lovers, each person pays $30 for data.

  12. No video recording? No focus or zoom camera? No voice recording? No MMS messaging? $15 extra a month for the same plan on the 2G phone? $100 for a account? No Flash player? A 320×480 screen resolution? No QWERTY keyboard?

    But the biggest drawback of all is the closed system of the iPhone. Good luck waiting for Apple to approve the killer application that you want.

    Fortunately, the browser will enable us to use web apps like Gmail, Gcal, Google apps, etc.

    Beware the hype though. Nokia sells more phones in a week than Apple has ever sold iPhones.

  13. “This device is a true game changer. Why? The immediacy of the data at your fingertips is huge. Imagine, looking up anything, anywhere. It (3G iPhone) allows you to leave your computer at home. It totally and completely mobilizes your data. Before this device you weren’t really un-tethered, but with this you are.”

    Not hard to imagine since other devices have been doing it for years. My AT&T 8525 (with that guy’s company logo stamped right on it) has been doing everything that he claims the iphone will do and more for years. When will people wake up and realize the iphone brings absolutely NOTHING new to the table.

  14. cpinto

    I’ll have to just disagree on a particular point, that of 3G for the iPhone having speeds similar to WiFi. The iPhone 3G has HSDPA, which gives a maximum 14.4Mbps is way off what’s now standard wifi speed (54mbps) unless he’s talking about 802.1b which is 11Mbps. But then again, I’m hailing from Europe, I don’t know how the US market looks like.

    Even then what I’ve witnessed, through using an actual 3G phone and living in a country at which 3G and it’s iterations have been rolled out over the past 7 years or so, is that mobile phones usually have a 384Kbps connection, some may even go to slightly over 1Mbps. If I were you I really, really wouldn’t count on having “wifi speed”. But mind you, 384Kbps is great for the mobile web and ~1Mbps is also great when you turn on bluetooth on the phone and use an internet tablet to access the “real” web. Usually 3.6 and 7.2 speeds are achieved by plugging a 3G dongle onto a laptop.

    As a side note, I remember the ads when 3G was rolled out and on the tellie everything looked snappy, video calls had high resolution and didn’t suffer from any lag. It was being pitched as something “as fast as your cable connection” (remember that this was way back in 2001). Then it hit the market, the market was utterly disappointed with the result. The lesson to learn here is that you shouldn’t pitch 3G, whichever version of it, against faster, fixed alternatives but instead pitch it as a big boost against what’s currently out there in the mobile market. Vodafone has, in my opinion, been doing this successfully, ATT Mobile should borrow a page from their book.