AT&T CEO Reveals Upcoming '3G' iPhone

Investors reacted favorably to AT&T CEO Randall Stephenson's revelation Wednesday night that Apple would release a '3G' version of the iPhone sometime in 2008. The next generation of the iPhone will be capable of surfing the web at much higher speeds than the existing version of Apple's breakthrough phone. Apple shares closed up 2.26%, while AT&T's were up 1.41% Thursday; both continued higher in after-hours trading.

Tech Trader Daily's Eric Savitz blogged live from Stephenson's Wednesday night interview with Forbes's Quentin Hardy. Among his key takeaways: Stephenson didn't disclose details about AT&T's iPhone revenue-sharing deal with Apple (one analyst claims AT&T pays Apple $18 per month per iPhone customer), but did say a 3G iPhone was on its way "next year." Stephenson also took a swipe at Verizon, saying Verizon's recent decision to open its wireless network to third-party mobile devices (full summary) was "overblown." On Google's new handset operating system, Stephenson remarked that if it is successful, AT&T will certainly offer it to its customers.

Financial blogger Larry Dignan summed up the reaction of many analysts when he wondered aloud if Stephenson's remarks will "freeze demand for the iPhone. Why buy a relatively slow iPhone when you can get a 3G one next year? 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."

Sources: Summary of Interview with AT&T CEO Randall Stephenson [Barron's], Wall Street Journal, AP, Reuters, paidContent.org
Commentary: AT&T CEO Promises 3G iPhone Soon - Will it Freeze Demand? • iPhone: The Gift That Keeps Giving • iPhone’s Competitors: How Are They Doing?
Stocks to watch: AAPL, T. Competitors: VZ, RIMM, GOOG. ETFs: WMH, IAH
Earnings call transcript: AT&T Q3 2007 • Apple F4Q07 (Qtr End 9/29/07)

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Comments

[Tom B]

"Financial blogger Larry Dignan summed up the reaction of many analysts when he wondered aloud if Stephenson's remarks will "freeze demand for the iPhone. Why buy a relatively slow iPhone when you can get a 3G one next year?"

UMMM-- maybe because 2.5G gives you longer battery life? You can't please EVERYBODY, it seems. People SHOULD be "surfing" on wifi instead of the cell network, anyway, because wifi is enormously faster than even 3G.

[brewer]

Uh, Dignan isn't a financial blogger, he is a shill for Microsoft and ZD-Net C-Net.

He is hoping this will hurt Apple, plain and simple. But it won't. Also, if you read the comments (or know the truth) you already know that Steve Jobs himself told the crowd last summer that the 3G iPhone will be out in 2008. So, this isn't news, especially not coming from AT&T which, frankly, is posturing or trying to get back at Apple.

The real news is that apparently Apple sold AT&T rights to 5 years selling the iPhone, but tricked them in that this is only for the initial iPhone, not for the next generation iPhone which will be out if not at MacWorld in January, then at some other point in 2008, and will be open for use on any network. AT&T is losing it's exclusivity.

[Tom B]

"The real news is that apparently Apple sold AT&T rights to 5 years selling the iPhone, but tricked them"

This is news to me; can you provide a link? T wasn't smart enough to lock down "iPhone 1.0 plus derivative models"?