The Digital Home

When the App Store was announced and Steve Jobs was discussing the possibility of iPhone applications totally transforming the way we use Apple's devices, he was asked if it would support VoIP on the iPhone. In response, Apple confirmed that VoIP would be available in the App Store as long as it was running on Wi-Fi, but not AT&T's 3G network. The company claimed that any VoIP solution running on 3G would be in violation of its exclusivity deal with AT&T.

But now that Global IP Solutions has released VoIP software for the developer community, I think it's time we explore why AT&T doesn't want iPhone VoIP running on its network.

Now I know that the first response will be because the company will lose substantial revenue as people use VoIP instead of its own network, resulting in less usage and fewer overage charges, but I think that's a bit short-sighted.

First off, no one is telling AT&T to allow VoIP on all its devices, just the iPhone. Secondly, why can't AT&T get in on the sale of VoIP solutions and encourage people to buy them from the App Store as way to reduce overages?

It may sound radical, but it just might work.

According to USA Today, AT&T and Apple have agreed to extend their exclusivity relationship through 2009, meaning the next iPhone will be made specifically for AT&T service.

The report claims that Apple originally signed the deal with AT&T through 2008 and next year would start selling iPhones on other carrier services. But after AT&T offered a $300 subsidy on each iPhone instead of the revenue-sharing model that became such a hot issue last year, Apple decided it was in its best interests to stay on with AT&T for one more year and take the subsidy.

Undoubtedly some will say that AT&T may have made the best deal in quite some time and I tend to agree. But still others will say that Apple did the right thing in taking the money and although it's forced to sign up for another year with AT&T, it's still the right move.

Those people are dead wrong.

Apple's decision to stay in this deal with AT&T not only makes me wonder if Steve Jobs is thinking clearly, but it also solidifies my belief that Apple has a little too much faith in its product.

While everyone else was calling the iPhone the greatest device of all time and putting Steve Jobs on that pedestal he enjoys so much yesterday, AT&T quietly told its investors that the revenue sharing deal it had with Apple for the past year has ended.

At first glance, that development may not matter to most. After all, that agreement really only affected Apple and AT&T and consumers were still forced to pay the same price regardless of the revenue sharing.

But if you take another look, you might find that there may be more to this story than meets the eye.

Now that Apple and AT&T have squeaked out of the deal, what's holding the two companies together? Certainly some would say that it's that oft-mentioned exclusivity agreement the companies signed, but I don't know of one person who actually read the thing and no one really knows if Apple can get out or not.

But if I had to take a guess, step one in getting out of its contract with AT&T revolved around the revenue sharing deal. And before you know it, Steve Jobs' latest blockbuster may be on other carriers.

Over the past few weeks, rumors have swirled about the possibility of Apple's iPhone being available on more cell phone carriers' services. Of course, this has already been announced overseas in a number of countries, including Italy, Australia and India, but so far, there has been no indication that it'll happen in the US. But if you look at the writing on the wall, it becomes abundantly clear that it will.

iPhone should be set free!

(Credit: Apple)

Although I believe it will happen this year, there's no doubt that there are a number of hurdles in Apple's path if it truly wants to open the iPhone up to different carriers. First off, the company will lose its revenue sharing deal with AT&T and ostensibly back out of a five-year exclusivity agreement with the carrier. And while these two issues are important to consider, I have no reason to believe Apple can't come out on top by backing out of both agreements.

When the deal was signed with AT&T, one important element that's missing now was true back then -- Apple was an unproven entrant into the cell phone market and the company was trying to establish a foothold. Because of that, it entered into an exclusive agreement with AT&T and used that deal to build up considerable demand. But now, the iPhone is a known quantity and Apple carries all the leverage. Beyond that, it's being faced with a major contender in Google Android-based phones that will be available on almost every carrier, and thus, must act before it's too late.

Suffice it to say that Apple will back out of this deal and make the iPhone available on all carriers. Here's why:

Why is everyone making such a big deal about this $200 iPhone report from Fortune? Evidently, the same folks who are praising AT&T and Apple didn't read the report and are naive enough to believe that this is ever going to happen. There's no chance that the next iteration of the iPhone, presumably featuring 3G, will sport such a low price tag.

According to Fortune, "When the 3G iPhone is introduced this summer, AT&T, the exclusive U.S. iPhone sales partner with Apple, will cut the price by as much as $200, according to a person familiar with the strategy."

That price cut will put the two versions of the iPhone -- an 8GB model and a 16GB model -- at $199 and $299, respectively.

Fortune said that a person close to the dealings believes the subsidy will only apply to AT&T stores and if anyone purchases the 3G iPhone in an Apple store, they will be forced to pay full price. According to the report, all cash lost on the subsidy would be recouped on the service charges after a few months.

Fortune and its hotshot source is kidding, right?

In the long and arduous battle between P2P file sharing services and ISPs, the former have done all they can to stay on top, while the latter have done all they can to eliminate them as quickly as possible. And just when I started losing hope, Verizon, for once, made me feel just a little bit better about ISPs. Will it last? I doubt it.

According to Verizon, it will do everything in its power to ensure that P2P downloading is brought into the new century and given the kind of treatment it has deserved for years. The company researched P2P file sharing and found that when an ISP cooperates with an P2P file sharer, they can speed downloads by a whopping 60 percent.

"This test signifies a turning point in the history of peer-to-peer technology and ISPs," said Robert Levitan, chief executive of file-sharing company Pando Networks Inc. "It will definitely show ISPs that the problem is not peer-to-peer technology, the problem is how you deploy it. It is possible to deploy P2P to their advantage."

But perhaps what's most important to this test is that Verizon is pledging availability of some of its infrastructure information to P2P file sharing services to increase the efficiency of both services.

What? You didn't know that already? I thought I was telling you something you already knew.

In case you missed it, Ad Scheepbouwer, the CEO of a Dutch telecom known as KPN told the Financial Times yesterday that "[He] had [an iPhone] and thought it was a pretty useless phone, to be quite honest. The battery ran out in no time. I didn't like the touch screen."

Of course, the company's CEO still didn't want to leave Steve Jobs and company out in the cold just in case it decides to start selling the iPhone to the Netherlands. Scheepbouwer said that his company would "be more than happy to sell it." After all, he pointed out, his company has "half the market in the Netherlands and hopes it will will be the party of choice."

Even better, this clown has allegedly been wining and dining Steve Jobs at every chance he gets in an attempt to win the deal. Am I missing something? Didn't he say that the product is 'useless'? And didn't he say that the battery runs 'out in no time'? If he believes that, why would Apple want to strike a deal with his company and why would his company want to sell such a junker?

If nothing else, this just goes to show us all how crazy these carriers really are.

What is happening at Apple?

(Credit: Declan McCullagh/CNET Networks)

Amazingly, almost every product Apple has released over the past decade has performed extremely well and there's no debating the fact that the iPhone is one of them.

But unlike the computer industry or the PMP business, the cell phone industry judges success by how well a device can perform over the long-term and keep a steady revenue stream flowing for both the carrier and the manufacturer.

And while the computing industry has become quite competitive over the past few years, driving prices down and forcing companies to make more compelling products, there's no debating the fact that the cell phone industry is the most competitive and strangely unprofitable of them all. After all, who would have thought that Motorola -- one of the proven leaders in the industry -- may be getting out of the handset business for good?

Knowing this, has Apple gotten in over its head trying to play the same game it always has with its other devices without realizing that the cell phone industry is an entirely different beast altogether? Sadly, I think it has.

When will it ever end?

(Credit: Verizon Wireless)

In a move that some have called "groundbreaking" and I have called "a disgusting attempt at trying to look cool", Verizon Wireless has announced that it will be opening its network to "any apps and any device...that meets a minimum technical standard."

What a waste of valuable editorial space. Why is this even news? Does anyone actually believe that Verizon Wireless has become the cell phone industry's latest (or is it first?) good guy? I certainly don't.

One of the more laughable parts of this story is Verizon's insistence on its new service becoming the haven "small device manufacturers and developers" have been waiting for. For some reason, I can't quite grasp why this is true.

In order to get your device or app on the Verizon service, you'll need to send it to the newly created $20 million test lab Verizon has set up and the company will need to approve it for use on its network. Also, it'll need to meet certain technical standards, which could mean it simply needs to light up and make noise, or it could mean it'll need to fly to Mars if it's not made by a well known firm.

To make matters worse, Verizon has yet to announce how it will accomplish this newly devised system and if you've been keeping score, this company that's trying so hard to be "open" has yet to join Google's Android Open Handset Alliance. That seems a bit odd, doesn't it?

But I digress. The real story here is not that Verizon Wireless has announced something without any real details, the real story is the fact that Verizon exemplifies everything that's wrong with the cell phone industry -- it's a place where common sense is thrown out the window and customer loyalty and respect have never existed.