At the Apple iPhone 3G S Unveiling, AT&T Gets Lousy Reception: Los Angeles Times, June 2009

In the secrecy that often surrounds Apple Inc.’s every move, industry cryptologists had plenty to study in Monday’s otherwise widely hailed unveiling of the company’s newest iPhone, the 3G S.

The focus was on AT&T Inc., the only U.S. provider of the iPhone. That’s because Apple left its partner in an uncomfortable position.

Some of the new features that iPhone users have clamored for, including the ability to use photos and video in text messages and to tether the phone’s Internet connection to a laptop, won’t be immediately available on AT&T’s network.

But they will be available in many countries around the world.

“Poor AT&T. They got totally flayed today,” said Rana Sobhany, vice president of marketing for Medialets, a New York firm that sells ads on cellphones. “Apple was positioning them as the villain.”

She said Apple’s move might be aimed at pressuring AT&T to end its exclusive agreement now or face the possibility that Apple won’t extend its ties to the carrier beyond the contract’s expiration in 2010.

Apple showed off the iPhone 3G S — the S stands for speed, to signify how much faster the new phone is — at its Worldwide Developers Conference in San Francisco, a gathering for the people who write software for Apple computers and phones. More than 5,200 developers from 54 countries attended, Apple said. And though the developers largely cheered each new feature announced for the iPhone 3G S, they jeered every mention of AT&T.

“You know you’ve got a problem when you’re at an Apple developers’ conference and you get booed more than Microsoft,” said analyst Michael Gartenberg, a vice president at research firm Interpret.

AT&T said it would offer the new features eventually. Sending photos and videos in text messages, known as MMS, will be available by the end of summer. The carrier did not say when “tethering,” the practice of using an iPhone’s Internet connection on an accompanying laptop, would be available.

AT&T would probably charge for tethering but not for MMS, a company spokesman said.

In addition, some existing iPhone users were rankled to learn that they would have to pay steep prices to upgrade to the iPhone 3G S. New AT&T subscribers will pay $199 for a 16-gigabyte version or $299 for a 32-gigabyte version, but existing customers will have to pay $399 and $499, respectively, for the new phones.

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