AT&T CEO Promises 3G iPhone Soon - Will it Freeze Demand?

AT&T (T) CEO Randall Stephenson stated the obvious: A 3G version of the iPhone is coming in 2008. But Stephenson’s comments may freeze demand for the iPhone. Why buy a relatively slow iPhone when you can get a 3G one next year?

Sometimes you have to wonder how coordinated Apple (APPL) and AT&T are. Apple CEO Steve Jobs has alluded to the 3G iPhone before, but never put out a rough timeline like Stephenson did. According to Bloomberg, Stephenson said “You’ll have it next year.” Stephenson was speaking at the Churchhill Club in Santa Clara on Wednesday.

So why could Stephenson inadvertently put the freeze on iPhone sales? With the iPhone (all resources) it’s all about the network. And the biggest complaint about the iPhone is AT&T’s slow EDGE network. Turbo charge the iPhone with 3G and a lot of complaints disappear.

Perhaps the average iPhone craving bear won’t wait for the 3G version, but some percentage of prospective buyers will. That means Stephenson’s comments can’t be music to Jobs’ ears. To bring up the 3G phone explicitly during this holiday shopping season isn’t the way Jobs likes to operate. He treats Apple’s product plans, even if obvious, like state secrets. Those who violate the cone of silence are infidels to be banished from the tribe or sued.

Stephenson won’t be banished by Jobs for violating Apple protocol. It’s not the first time he has stated the obvious, although he was more specific this time. On October 23 Stephenson said there would be a 3G iPhone, during his visit to the Web 2.0 Summit. But Jobs can’t be too happy this morning, especially if the 3G iPhone continues to be the buzz and it won’t be ready soon, as in for Macworld in January. If not, iPhone sales could be dragged down as customers wait for the second coming.

Comments

[Tommo_UK]

Actually Larry is completely wrong. At the UK iPhone launch in October, Jobs specifically stated he hoped to have a 3G iPhone out by "late 2008," as far as I recall (or words to that effect).

This is not news, except for headline writers with too much time on their hands. Nothing to see. Move along.

[wagonjumper]

I received my iPod touch yesterday. The guy next door ordered one hundred. The Fedex guy said he had "one million" in his truck ...

[thompson]

Larry,

What Wall Street analysts, and apparently bloggers like you as well, don't realize is that the average consumer rarely, if ever, hears ANY of this stuff. They only know what they see on the commercials and what their friends show off. Suppose you stand in front of an Apple store and take a poll on the following question: "When will Apple have a 3G iPhone available for sale." I would wager that the majority of the responses will be: "What's 3G"?

I mean seriously, a lot of people are flocking to the iPhone based upon its strengths, and they have no clue about its weaknesses. For those of us that DO know about 3G and the iPhone's lack thereof, we were pretty much already assuming that the 3G version was imminent. I didn't need the AT&T CEO to tell me that.

My conclusion is that this "revelation" about the 3G iPhone won't put a damper on sales at all.

Thompson

[Dan Poarch]

Look, the iPhone is so good that most people live happily knowing that is EDGE is all that's wrong with it that it's not the end of the world. As well, every iPhone owner I know plans to upgrade their iPhone the moment a 3G iPhone drops. That's $800-$1000 in one year's time, on a cell phone. Sounds crazy right? But that's how much people love the iPhone.

There's a lot of expensive tech out there that just doesn't deliver. People love the iPhone because it delivers.

Slowly. Over. The. ... ED---GE. Network.

[T Muller]

Do people think 3G is going to be that much better? Sure it is, but how can people claim EDGE is so slow when there is not a 3G iphone to compare it to. It seems slow compared to WIFI, that's as fast as desktop. Even faster if using slow IE explorer.

I have had 3G on windows mobile phone and EDGE is most of the time faster than 3G was, which the phone and browser makes up for.

I think people get false impression due to the speed of wifi. 3G will speed it up a good bit, but will the internet ever be fast enough ???? Customers will still bitch. And that's the easiest target.

The phone not being 3G is not a good reason to hold out. I don't think it will make major difference since most of the delay is establishing a connection, then the data transfer is fast. The WiFi will still be so much faster it will both will still be slow. It won't help out with ATT's coverage and dead zones.