Steve Jobs&#8217; Snow Job
<p>One of my predictions in <a href="http://esr.ibiblio.org/?p=2021">Flattening The Cellphone Market</a> came true today. It suggests that the iPhone&#8217;s Android-induced troubles are about to get much worse.</p>
<p><span id="more-2047"></span></p>
<p>I had written:</p>
<blockquote><p>
Back to Apple. Anybody want to bet that Steve Jobs hasnâ€™t already been on the horn to AT&#038;T demanding that they allow the iPhone 4G to ship with tethering enabled? From his point of view this is now a must-have if the 4G isnâ€™t going to look like a weak second-best. But AT&#038;T is going to push back, oh yes they will, because theyâ€™re already notorious for iPhone service problems stemming from network underprovisioning and congestion. Hilarity, and possibly some bloodletting, will ensue. There are only three possible outcomes here: (a) iPhone 4G fails to ship with tethering, in which case Apple and AT&#038;T both take a hit, (b) iPhone 4G ships with tethering and it sucks, in which case AT&#038;T takes a hit and Apple may dodge a bullet or not, or (c) AT&#038;T ponies up a gigabuck or three to upgrade to 4G at record speed.
</p></blockquote>
<p>It looks like we got outcome (b).  <s>Apple</s> AT&#038;T announced today that the 4G will allow tethering for an extra $20 per month, but there&#8217;s a sting in the tail: only with a new data plan that has a 2G-per-month cap, and the iPhone unlimited-data plan <a href="http://gizmodo.com/5553135/att-iphone-tethering-an-extra-20month">is being scrapped</a>.  I think we can deduce from what wasn&#8217;t announced that there will be no mobile-Wifi-hotspot support, especially since multiple WiFi clients would hit that cap in no time at all.</p>
<p>And yes, iPhone tethering is going to suck.  We learn from <a href="http://www.businessweek.com/news/2010-06-02/at-t-unveils-data-plans-to-help-manage-iphone-demand-update1-.html">Business Week that</a> iPhone users average 7 times the data load of non-iPhone users on AT&#038;T&#8217;s network.  This means the usage cap will hit them 7 times as hard.</p>
<p>It&#8217;s pretty clear that Jobs&#8217;s reality-distortion-field failed and AT&#038;T won this round with Apple.  The net effect will be to decrease the data load on AT&#038;T&#8217;s creaking, underprovisioned network while increasing the toll charged for it. Unfortunately for Apple, this probably also means that the iPhone 4G is <em>not</em> going to achieve feature parity with Android 2.2.  Of course it&#8217;s possible that Jobs is going to pull the mobile-Wifi-hotspot feature out of the air at WWDC in 5 days, but now that looks unlikely. The timing of today&#8217;s announcement tells me that Apple doesn&#8217;t want to be seen to be playing catch-up at WWDC.</p>
<p>Catch-up is, nevertheless, what Apple has to play now.  It&#8217;s significantly behind in features (mobile-Wifi-hotspot, voice recognition, and Flash support are the big ones) and behind in new-unit sales.  It&#8217;s fast alienating app developers with onerous restrictions on development tools and an app-approval policy that looks increasingly murky and arbitrary.  All of which makes me think Steve Jobs&#8217;s cunning has deserted him, that he&#8217;s either losing his grip or overtightening it.</p>
<p>It will be interesting to see how aggressive the Android-using carriers get about kicking Apple when it&#8217;s down.  Sprint, in particular, has a golden opportunity two days from now at the EVO 4G launch.  It&#8217;s already announced that the mobile-WiFi -hotspot feature is on; if Sprint decides to exploit its 4G buildout by making that feature uncapped, Apple will get well and truly hammered among the elite, opinion-molding users it most covets.</p>
<p>This also illustrates the point that Apple&#8217;s bind isn&#8217;t entirely due to Android.  The fact that iPhone has a U.S. exclusive with a  badly underprovisioned carrier is seriously limiting Steve Jobs&#8217;s ability to respond.  One wonders what he will do about that, or can do.</p>
