AT&T, Apple Optimizations Improve iPhone Performance
AT&T has found a way to improve iPhone performance on its network, and its network's overall 3G performance in general -- and it didn't involve billions in new infrastructure investment.
It simply had to help Apple (NASDAQ: AAPL) tweak the iPhone to behave itself.
An article in the Wall Street Journal reported that "Apple rejiggered how its phones communicate with AT&T's towers. As a result, the phones now put less of a load on the network for such simple tasks as finding the closest tower or checking for available text messages."
AT&T (NYSE: T) CTO John Donovan said he and other executives visited Apple to give iPhone designers a "master class" in wireless networking and showed them how to create new technologies to limit the strain on the wireless provider. The report did not disclose exactly what kinds of changes were made, how they are implemented, or whether they are in place now.
A spokesperson for AT&T confirmed the Journal report that it has indeed worked with Apple to improve iPhone behavior on its networks, but declined to elaborate further. Apple did not return a request for comment.
The program was part of a bigger plan on the part of AT&T to improve the much-maligned performance of its network, addressing network speed and dealing with dropped calls -- two of the biggest complaints. The program paid off, as PC World found AT&T to have the best performance of the four big wireless networks in a series of tests run last February.
The Journal speculated that one reason AT&T, the No. 2 U.S. carrier, is under pressure is because Apple is preparing a new iPhone for Verizon Wireless, the largest wireless network in the U.S. The Journal caused a stir earlier this week with a report that Apple was preparing a phone for Verizon Wireless's CDMA network after three years as an exclusive partner with AT&T, which uses the more popular GSM wireless technology.
The big question is the duration of AT&T's exclusive partnership with Apple. Some have said it runs three years, which would mean it expires at the end of this year, while another report said it was for five years. Neither party has disclosed the length of the contract.
Apple's New Mobile Device iPad on AT&T
Despite rampant rumors, a Verizon iPhone has yet to appear, and Apple is launching its new iPad with 3G wireless capabilities this week with AT&T as its exclusive provider, even though there had been earlier speculation the company might go to Verizon as its new mobile device partner.
Morgan Stanley analyst Katy Huberty issued a research note earlier this week revising her 2010 projections for iPad sales, up to 6 million units from a previous projection of 3 million to 4 million units. iPad suppliers currently forecast 8 million to 10 million units being shipped during 2010, up from prior expectations of 5 million-plus.
That increase will be very profitable for Apple, Huberty notes. "Every incremental one million iPads shipped equates to roughly $0.25 EPS, setting up for significant earnings upside in [the second quarter of 2010]," she wrote.