The Wall Street Journal’s Amol Sharma and Nick Wingfield have interviewed Apple CEO, Steve Jobs and AT&T CEO Randall Stephenson on the eve of the iPhone launch.
Mr. Jobs acknowledged that the company’s new iPhone won’t surf the Internet as fast as he would like on the network, called “Edge,” but added that the device’s ability to connect to Wi-Fi hotspots would give consumers a speedier alternative for Web browsing. For his part, Mr. Stephenson said the iPhone represents a broader push by AT&T into Wi-Fi services, including, potentially, mobile Internet calling. The two men also discussed the iPod’s “halo effect” and reflected on the origins of their corporate partnership.
WSJ: One of the interesting things for people about the iPhone is the bundling of data and voice into one service plan. We’ve talked to some other smartphone manufacturers in the last couple days who say that would be great if that were extended to other devices because it seems like it would ensure that out-of-the-box people aren’t getting an experience where they’re pressing a button and something doesn’t work. Is that something that you are looking at extending to other phones in the AT&T lineup over time?
Randall Stephenson: It depends on the handset itself. With this particular device, to not have an inclusive data package with a voice package would be almost irrelevant, right? This is a data and a voice product. It’s nonsensical to sell a rate plan separate. As you see devices migrate towards this type of device, I fully expect you’ll see rate plans migrate towards that as well.
WSJ: A lot of attention has been focused in some of the initial reviews of the iPhone on the EDGE network that this phone is going to be on. Steve, we saw somewhere that your concern in putting a 3G chip in the first edition of the iPhone was that the current generation of that technology would drain the battery a lot, and that there were also some issues of coverage of the AT&T 3G network at the time you did this deal. Is that correct and have those issues been resolved over time as we’ve seen the technology evolve?
Mr. Stephenson: If you think about wireless broadband networks, EDGE is the only ubiquitous nationwide broadband network deployed today. It’s a 300-plus kilobit type service. We’re selling in the tens of thousands every single month of smart phones that operate on nothing but EDGE. The service experience is really, really good and what you’re going to see with the iPhone is the caching technology that Steve and the Apple guys have developed here makes the EDGE experience even better. Between the Wi-Fi and the EDGE coverage, this is a really good experience.
We put right south of $16 billion of capital into this network over the last two years. I feel real good about the coverage and the performance. We put tens of thousands of hours of testing this device on this network and it’s performing at the top of any device we have out there.
Mr. Jobs: You know every (AT&T) Blackberry gets its mail over EDGE. It turns out EDGE is great for mail, and it works well for maps and a whole bunch of other stuff. Where you wish you had faster speed is…on a Web browser. It’s good enough, but you wish it was a little faster. That’s where sandwiching EDGE with Wi-Fi really makes sense because Wi-Fi is much faster than any 3G network.
What we’ve done with the iPhone is we’ve made it so that it will automatically switch to a known Wi-Fi network whenever it finds it. So you don’t have to go hunting around, resetting the phone, flipping a switch or doing anything. Most of us have Wi-Fi networks around us most of the time at home and at work. There’s often times a Wi-Fi network that you can join whether you’re sitting in a coffee shop or even walking along the street piggybacking on somebody’s home Wi-Fi network. What we found is the combination is working really well.
When we looked at 3G, the chipsets are not quite mature, in the sense that they’re not low-enough power for what we were looking for. They were not integrated enough, so they took up too much physical space. We cared a lot about battery life and we cared a lot about physical size. Down the road, I’m sure some of those tradeoffs will become more favorable towards 3G but as of now we think we made a pretty good doggone decision.
WSJ: Did you make enough of these to meet demand?
Mr. Jobs: We’re building a fair number of them, but we may not. We had to make our best guess as to what the demand was going to be and what supply we were going to put in place many, many months ago. We built factories to build these things and everything. We’ve taken our best guess but it wouldn’t surprise me at all if it ain’t enough.
