Another example of why the tech industry and mobile operators don't get along

When you work in consumer electronics, one of the rules that gets drilled into you very early on is that you never do anything to disrupt the holiday selling season. In the US, the month between Thanksgiving and the end of the year can account for three months' worth of sales, if not more. During that time, you don't change prices, you don't alter your ad campaigns, and most of all you don't ever say anything about future products, because that might cause customers to hesitate before making a holiday purchase.

So the CEO of ATT, giving a speech this week in Silicon Valley of all places, says that a 3G version of the iPhone is in the works:

"Has Jobs announced that? I don't think he's announced that, but you'll have it next year."

Not only does he spill the beans, but he acknowledges that Apple hasn't announced it and then talks about it anyway (link). The next day the story is carried by the AP, MSNBC, the Times of London, Wall Street Journal, Bloomberg, the SJ Mercury News (which had the version of the quote above), and 318 other publications according to Google.

In the US, the assessment from a lot of commentators is that this won't have much impact because the iPhone is so popular anyway. Maybe, I guess, although the iPhone isn't sold out, so any loss in sales is still a loss. But in Europe, I think it could be a big problem. iPhone sales there are not going great to begin with, and folks in Europe are generally much more conscious of 3G vs. 2G issues. The acknowledgment that a 3G iPhone is coming could cause a lot of people to hesitate before buying.

If AT&T competed directly with Orange, O2, and T-Mobile Germany, I'd be tempted to speculate that they made the announcement on purpose to hurt the competition. But they don't, so I suspect this is just a case of a CEO who wanted to show that he's not controlled by Steve Jobs but instead demonstrated that he doesn't understand consumer electronics.


Louis L. said...

Valid point. But I think that a 3G iPhone in 2008 was a foregone conclusion. Apple updates its product line (at least) annually and it makes sense that the iPhone's single biggest criticism would be remedied with the update.

Michael Molin said...

An important detail here that a month ago WiMAX became a 3G standard. It's a great success of Intel and Motorola as founders of WiMAX Forum. And AT&T was one of the first carriers that started to work on its deployment in 2005. I guess it's just a question of electronic design - in 3G iPhone a WiFi module will be replaced with a Motorola WiMAX chip. The most important thing about this - a type of 3G iPhone's processor in the light of the fact that Intel announced a Silverthorne processor this spring and planned it for release in the first half of 2008. So, Steve Jobs might make it known at MacWorld 2008 in January. Together with the announcement of development strategy for (3G) iPhone. And the future prospects are connected with Intel's development of Moorestown SoC.

Michael Mace said...

Louis wrote:

>>I think that a 3G iPhone in 2008 was a foregone conclusion.

Agreed. But acknowledging it in public sometimes makes a huge difference in customer behavior (and sometimes doesn't). It's hard to predict what will happen in this case, but I'm sure Apple didn't want to take the risk.

Anonymous said...

In an earlier post you mentioned that Apple will do anything to win this war with Nokia.

That got me thinking about this ATT blunder.

Perhaps this was leaked on purpose to make sure people who might have bought a 3G phone for xmas since iPhone is not, will instead wait until next year. This works for those who are savvy on these issues.

And for those that are not thinking much about this, then no damage done as this is more a techy announcement from ATT rather than official from Apple.

Thanks for this blog.

Nick (Dial-a-Phone blog) said...

Bit of blunder, though anyone that knows Apple's histpry will be expecting a new product in the new year. Can't imagine Apple are too pleased though!

niko said...

Well... iPhone 3G is indeed very easily predictable, as the actual connectivity is the major complain of all the reviewers/users.

Now about the sales in Europe, most of my friends there complain about the price. Apple is known to add a significantly larger premium on its products in Europe vs. US. In addition carriers seems to add their own premium... Milking the cows anyone?