The Dying Goodwill Toward AT&T

AT&T HQCongratulations! When Apple releases iPhone OS 3.0 next week, we'll finally be gaining the following features ...

Multimedia Messaging Service (MMS)! ... unless you're on AT&T.

Tethering! ... unless you're on AT&T

A brand new 16GB iPhone 3G S for only $199 with a two-year contract! ... unless you're on AT&T and already own an iPhone 3G.

AT&T has long been the subject of grumbling from the community of US iPhone users who want to use their phones legitimately. Ever since the original release back in 2007, it feels like AT&T has been trying to play catch-up when it comes to service and tower availability. But, the release of the iPhone 3G S might be the straw that breaks the camel's back. I can walk down to my local AT&T store and pick up a cheap handset for less than $100 that will have MMS. AT&T knew this day was coming. The company may wail and gnash its teeth, complaining that it aren't ready for this, but it should be, especially since Boy Genius Report tells us that all AT&T needs to do is manually remove the opt-out code!

It was even apparent during the keynote yesterday that Apple sounds pretty disgusted with how far behind AT&T is dragging them. Notice the absence of any AT&T personnel on stage. Had AT&T been on the ball to begin with, it most likely would have taken center stage -- boasting about all the improvements that would garner shiny new services for iPhone users and more money for the corporate coffers. But it didn't, and the tension coming from Apple during the moments when MMS and Tethering were announced was pretty tangible. Apple had all of these features that people have been begging for ready to go, and now Cupertino is forced to wait for AT&T to finish twiddling its thumbs and do what it should have done two years ago. I wouldn't even be surprised if AT&T somehow found a way to block copy/paste!

A small footnote on Apple's iPhone page indicates that MMS support from AT&T will be coming later this summer. Another note on the 3.0 software pages says that tethering isn't available in the U.S. and some other countries, although Engadget cites AT&T sources who say it's coming -- there just isn't anything to announce yet.

Then there comes iPhone pricing. Those expecting a repeat of last summer's offer to replace their current iPhones with the latest model on the cheap are being sorely disappointed. You can read full details on that kerfuffle over at TUAW. Those who bought the first generation iPhone paid the full price right off the bat, but later buyers were able to get the iPhone 3G at a subsidized price. Like with any other subsidized phone with any other carrier, you'll have to pay a pretty hefty price for the privilege to upgrade before you're eligible. For me, that'll be in October 2010. By then, the iPhone 3G s4π will most likely be out. Still, people aren't happy with this one either.

The ramifications for AT&T will come when it sits down at the negotiation table with Apple to extend its current gig as exclusive carrier for the iPhone in the United States. Apple won't forget that AT&T didn't have key features in place when they needed to be there. If Verizon, T-Mobile, Sprint, or any other carrier can convince Apple that they would be ahead of the game while AT&T lags (and, believe me, it wouldn't be that hard of an argument to make), Apple will take its toys and go elsewhere. And loyal iPhone users would follow. I know I would.