AT&T Logo

Take the following example Megan Lavey’s position in a recent TUAW post:

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.

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.

I don’t think this is going to happen, and here’s why. Just by chance I watched Steve Jobs’s interview with Walt Mossberg at 2007′s All Things D (D5) Conference, and I was struck by the sense of loyalty that Jobs expressed when referring to how Cingular took a risk on Apple in accepting the iPhone to their network while Verizon (we hear) wouldn’t give them access. The quote arrives just before the two minute mark:

“I think Cingular invested in us, they took a gamble on us, and likewise we took a gamble on them. So, I will never forget that.”

Apple CEO Steve Jobs at the Wall Street Journal and Walt Mossberg’s ‘D’ Conference in 2007

AT&T, at the time called Cingular, may not be the strongest network, but as CEO Randall Stephenson mentioned in this year’s D Conference, the top complaint for all mobile phone networks in the US is signal; it’s not unique to Cingular. There’s no saying there will be any less of a mob decrying Verizon signal strengths were Apple to release an iPhone CDMA version. I imagine Apple could likely keep a level of pragmatism and institutional memory in its decision making process – it wants the best business result but it also wants a carrier in the US that it can actually deal with, and back in 2007 (let alone 2004 when they started working on the iPhone), Verizon was so locked up in their own software packages, network restrictions and carrier lock-ins, I can’t imagine how a pairing of such companies would have worked.  The cultures are, ironically, too similar; both Apple and Verizon want to have full control over their ‘product’ and thus a melding of minds just wouldn’t have worked at the time.

This is not to say that there is no possibility of Apple adopting Verizon as a partner, but I think the importance of institutional memory and personal relationships is incredibly within Apple, evidenced by the number of times that key employees have been hired and rehired again after any attempts to jump ship, taking people like Jon Rubinstein and Craig Federighi as obvious examples.  Who knows whether Verizon will care about Apple’s products once they’ve got them. For the moment the iPhone is AT&T’s golden egg and thus they work to retain it. Once it’s gone how will that relationship with Apple play out? Will AT&T remain accommodating? Verizon might be added as a carrier, but it won’t be without considerable fight and, I’m guessing, significant anguish.