Apple gets reamed by AT&T

Sorry Steve, but AT&T won this battle. They don't have the "Death Star" logo for nothing.

Apple got totally sucker-punched by AT&T by locking the iPhone into AT&T for five years. Consumers don't win with that arrangement.

While Apple may be revolutionizing the mobile user experience with the iPhone, they sure ain't revolutionizing the closed business model. The carriers control what appears on the phone, how locked up it is, and how you use it.

What, no iChat on the iPhone? You have to use SMS? Can't use the iPod or Wi-Fi functions without locking in to AT&T? It really is a brick without activation? Does that surprise you? Not me. Apple is being reamed to the core.

Hey Steve, is that how you want the Mac to be used? Locked in to one Internet provider? At one time Apple partnered with Earthlink for Internet access, but you could use any provider you wanted. Would Apple be alive today to give you the iPhone if they locked the Mac to Earthlink? Nope.

Yet Apple is willing to concede to this business arrangement with AT&T to ensure they are allowed to enter the mobile market. Remember, all the carriers need to do is tell Steve to take a hike and he'd be dead in the water with his great invention.

AT&T didn't tell him to take a hike as they saw a way to capitalize on the Apple coolness factor. That's smart business. And they forced Apple to be locked to AT&T. Great move for AT&T, bad move for Apple.

While Apple may be the puppet-master for folks in the music, and maybe TV and movie business, Steve's certainly getting his strings pulled by AT&T. Does Steve know this? Is he taking a lot of pain now to enter the market so he can stick it to the carriers in five years? (If five years is true, this might as well be forever).

If huge companies like Nokia, Motorola, LG, et. al., are shafted by the carriers, why would Steve think he could fare any better? We'll know in five years if Apple made the strategically correct move.

Of course, you've gotta wonder what's going through the heads of the execs at AT&T. They've got this Apple cobra by the tail and they're flinging it around pretty good and smiling, but if they falter for a second, that cobra is going to turn and sink its fangs in deep.

Meanwhile, the other carrier spectators will start to worship the cobra.

So is this a good deal for consumers? I think in the long run it might work out. Consumers are happy now as they've got the iPhone. Other consumers will be happy as the other mobile phone suppliers try to play catchup and release new features. Eventually, we may all be happy when we get a lot of bells and whistles on our mobile devices.

But we'll likely still be locked to a carrier, and that's only good for the carriers. Well Steve, can you free consumers from the death grip of the carriers? I'm hoping you can, but I don't think you will.

Oh, and why the retro, multi-coloured Apple logo above? When it comes to the cell phone biz, Apple really hasn't changed what's important.