Brainstorm Tech 2010

Where the Fortune 500 and the innovators meet to shape the future of business. (July 22-24, 2010)

The biggest winner in the iPhone fix: AT&T

July 16, 2010: 2:52 PM ET

For once, AT&T CEO Randall Stephenson avoids having his network vilified by Apple-philes.

By Shelley DuBois, reporter

AT&T CEO Randall Stephenson (Photo Credit: Josh Hallett, flickr.com)

You still want the iPhone, Steve Jobs says at the press conference in Cupertino. And Apple (AAPL) still wants you. So he says whoever wants to return for a full refund can go right ahead (you won't) and he's giving away free cases that will allegedly circumvent reception problems, all of it sans recall.

Jobs probably soothed the Apple fan base. But AT&T (T), the other major player tied to this hardware, has got to feel a little vindicated.

The network has taken a lot of heat for the iPhone's service problems. Jobs has hinted that AT&T is the culprit behind the slew of dropped calls and patchy service areas that have plagued Apple phones throughout the partnership. When people started complaining that the new iPhone, Apple engineers said the problem was that it had been overstating coverage. The hidden message: AT&T's network is to blame -- our only flaw was in making the network look better than it really it is.

It wasn't the first time that AT&T was blamed. At last year's Fortune Brainstorm Tech conference, AT&T CEO Randall Stephenson discussed his company's massive market and the challenges of competing with the same companies you have to partner with. But audience members wanted answers about network flaws were driving iPhone users mad.

Stephenson said that the free market would push AT&T to be better. "At the end of the day, you're only going to win in this business if your network quality is the best."

He also indicated that glitches are part of the deal when you roll with the big dogs. "Nobody else in the world experiencing what we're experiencing with the volumes of traffic," he said.

That's Job's claim today. He said that smart phones have issues, and his company's committed to fix the ones that come up.

But unlike other vague service problems, Apple has admitted the glitch is totally on them. Earlier in the week, that wasn't totally clear. There's a gap in the steel band surrounding the phone that receives signals. When a signal goes through the gap, calls and data can get lost.

Less than one more call gets lost on the iPhone4 for every hundred calls on the iPhone 3GS. But with 3 million users buying the new model in the past 3 months, that's a lot of calls down. And in this case at least, AT&T is in the clear.

Posted in: , , ,
Join the Conversation
About This Author
Shelley DuBois
Shelley DuBois
Writer - Reporter, Fortune

Shelley DuBois writes on management issues for Fortune.com. Before joining Fortune, she was a producer for National Public Radio's Science Friday and worked for Wired. Shelley has a graduate degree in science, health and environmental reporting from New York University. She lives in Brooklyn.

Email Shelley
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.