Mashable, God love ‘em, is convinced that if (and that’s a BIG IF) AT&T loses exclusivity on the iPhone, they’ll see a major decrease in income and revenue. This just proves, once again, that just because you’ve got a big microphone doesn’t mean you understand the business or the technology behind the mobile industry.

To their credit, the author explains some of the caveats–sure, AT&T isn’t going to lose all it’s iPhone subscribers over night, but then, naturally, he goes right back and contradicts himself:

If, on the other hand, Verizon got the device next year, the incentive to switch to AT&T would go up in a puff of smoke. The number of new wireless subscribers would drop like an iPad thrown out of an airplane.

You are just. wrong. And including juvenile and unrelated Microsoft paint graphics about how tethering means losing your unlimited data plan only exacerbates the fact that you don’t get how this business works.

Harsh? Maybe. True? Yes. Here’s the deal, folks.

If (once again, that’s a big IF) AT&T were to lose exclusivity on the iPhone–which I’m still not convinced will happen until at least 2012 (not to Verizon anyway, to T-mobile is a whole other, much more rational and likely possibility)–then yes the market would change. No, AT&T would not suffer and die because they are just soooooo dependent on the iPhone. That’s nonsense. There’s a couple factors at play here:

1. There’s no such thing as a finite market. This is the number one rule of business, marketing, and well, it’s important and you need to get this. We will never reach a point where every single person on earth is just so satisfied with their cell phone and wireless coverage that they will never ever want to switch or buy a new phone. It’s never going to happen. EVER. Which means that there are always customers to market to, and always new people to buy phones, iPhones or not, AT&T or not. If AT&T loses exclusivity? They’ll keep selling the iPhone to millions of people, along with other networks, and they’ll continue to sell millions of other inferior phones to ignorant customers who don’t understand they’re being ripped off by the quality of their device.
2. Moving to Verizon would be a huge pain in the ass for Apple AND Verizon. On the surface, most people probably don’t see any downside at all to Verizon adding the iPhone to its mobile product line. They’re missing 80% of the substance in this argument. For Apple, they would have to create an entirely new iPhone. Not just a slightly different one, but an entirely different one. Switching to CDMA is not as simple as simply switching out a chip in the phone. With CDMA they would have to rework the entire infrastructure of the iPhone 4, since it’s antennae is specially designed to work on AT&T’s GSM network–meaning this would have to be reconfigured and re-tested, thousands and thousands of times, before they’d let it see the light of day on Verizon’s network. They’d also have to change the software, as the CDMA network will not allow phones to access both the voice network and the data network simultaneously. So all you AT&T customers who enjoy browsing the Web as a distraction while talking to your parents on speakerphone? Kiss that blessed distraction goodbye. For Verizon, they would lose the best mobile partnership they’ve ever, ever had–Google. No, they wouldn’t lose it straight out, but you can bet Google isn’t going to be happy about it. Verizon has now spent over two years all-out marketing the Android operating system and phones (even directly attacking the iPhone on occasion), and going back on all those millions of ad dollars is just about the biggest, most hypocritcal, “f*#$ you” to Google they could pull. Would that stop them? Maybe not alone, but if Android surpasses the iPhone in market sure in the next two years, as has been projected, then Verizon might be crying a little when AT&T starts making bank on both Android and iPhone phones, while Verizon has to catch up by spending millions of dollars in advertising to remind customers that “Oh hey, we have the iPhone now, too! We’re five years late, but trust us, our network can handle it!”
3. Verizon does not have a stronger network, and it won’t take long for customers to figure that out. Regardless of how much the “I’ve got a map for that” ads might be drilled into your brain at this point, Verizon simply doesn’t have a stronger network. They have a better quality network because there is less strain on it. If they get the iPhone, you can kiss that goodbye, too. You think AT&T is bad? Just wait until Verizon unleashes the iPhone on the pitiful networks of San Francisco and New York. AT&T has learned their lesson and is constantly bolstering their network to correct for the insane amount of data usage iPhone customers manage. I’m willing to bet Verizon has underestimated just how much strain the iPhone would put on their network. And if they try to roll it out on 4G… it’ll be like going back to the EDGE network.

But what do I know. I’ll firmly admit I’m not a mobile technology industry expert either. But I’ve spent enough time watching this and learning about it that I think I get it better than most people now. Does it mean that I’m 100% sure of everything I just wrote? No. But ridiculous doomsday theories for AT&T and fanboyish journalism for Verizon is just getting out of hand.

Chances are, nothing will play out like almost anyone has predicted it will, including myself. Chances are I’m wrong about something in this post, just like Mashable is almost certainly wrong in theirs. So let this be your disclaimer before you go off ranting online or in the comments (although feel free, really, I don’t actually mind) about how I don’t know what I’m talking about.

1. Verizon doesn’t want it. They’re making plenty of money. They also know that they do not have the strongest, fastest, most reliable network. AT&T does, although it might not seem like it thanks to all the iPhones clogging up the system.
2. AT&T will do anything to keep the iPhone. Despite the way their PR has suffered thanks to shoddy service (again, thanks to too much data and not enough bandwidth), AT&T knows that the iPhone is the lifeblood of their service. Nobody is that attached to a service provider–as long as it works decent and does what it’s supposed to without ripping you off (too much), people will go to whoever has the best phone. And right now, the iPhone is king (despite competition from Android phones).

So, a couple excerpts from the article:

Newcomers will have two options: Under the DataPlus plan, subscribers can pay $15 a month for 200 megabytes of data; that would handle about 400 photos or 100 minutes of streaming video. The DataPro plan offers 10 times that capacity, 2 gigabytes, for $25.

Good move. Both plans are cheaper than what you’re paying now. And who doesn’t like saving money? Plus, very few will actually have to pay extra for additional data:

AT&T says 65% of its smartphone customers use less than 200 MB a month, and 98% use less than 2 GB… And just 3% of AT&T’s smartphone customers account for as much as 40% of its data traffic, contributing to slow transmissions and dropped calls. AT&T must control heavy users, or at least get them to pay more…

Soon, I can virtually guarantee Verizon will roll out a similar pricing structure (if they haven’t already… I’m not familiar enough with their pricing plans).

But not all is rosy for AT&T today. They made some stupid mistakes too. First, this same pricing structure is in place for the iPad as well, which uses significantly more data, as would be expected. Now I’m not sure this will be quite as big a deal as lots of people are saying, because it sucks using that much data on a 3G network anyway (for streaming movies, etc. most people will hunt down a Wi-Fi signal). Who knows, maybe they’re just kind of testing the water with this–if people get too outraged I wouldn’t be surprised to see them tweak this down the road.

Secondly, the last paragraph just boggles the mind (emphasis mine).

IPhone customers who pay an extra $20 a month soon will be able to use the phones to provide Internet connections for laptops or other devices. That process, called tethering, will be available on 3G iPhones this summer when Apple releases a new operating system, AT&T says.

But wait, you can already do that. Just not in the U.S., and not in many other countries. It’s embarrassing that they are literally re-announcing a feature from last year as if it’s some kind of revolutionary feature. Gimme a break.

[USA Today]

Yesterday, at the social media breakfast here in D.C., Geoff Livingston (as well as Alex Howard and Shashi Bellamkonda, but to a lesser extent) put a huge focus on mobile.

“Get mobile, get mobile now,” he said. He’s convinced mobile is the the place to be for Internet technology, especially social media. I don’t disagree. Mobile is undoubtedly where everyone is heading–the Apple iPhone, Google Android, BlackBerry and even new Nokia phones are putting more of a focus on data, Internet usage, and apps than ever before. It’s what customers want. They want easy access to all the world’s information everywhere, all the time. The development in smart phones over the past three years gives us that.

Now there’s much talk about the upcoming Apple event tomorrow. The topic even came up just a few minutes ago on MSNBC’s morning talk show, Morning Joe. Everyone–even non-geeks–is excited about the announcements Apple will make tomorrow. Will it be the tablet? Almost certainly. Will it be new iPhone software? Maybe. Will it be the iPhone announced for multiple carriers? Well of course, since AT&T’s exclusivity contract runs out this year… right? Why wouldn’t other carriers want the iPhone on their service? Why wouldn’t Verizon want to drive millions and millions of customers to their stores to pick up the newest, hottest iPhone to use on their theoretically better, faster service? Same with Sprint.

I’m not about to suggest the iPhone will stay exclusive to AT&T–I don’t think AT&T wants it exclusive anymore. They got the first boost, it gave them what they needed to keep up with Verizon, and that’s fine. In fact, I think that Apple most likely will announce support for multiple carriers tomorrow. I’m just not so sure that’s a good thing.

Look at it this way. Before Apple released the iPhone on AT&T’s service, were there ever any major complaints about service quality for AT&T? Maybe in rural areas, as with all carriers, but never in places like New York City or San Francisco (two of the most common cities with issues for AT&T). Never were there problems with network overload, never did you hear about concepts such as a carrier simply not being able to handle the amount of usage it’s getting. Ah, the consequences of an unlimited data plan.

I think Apple set off a ticking time bomb in the form of unlimited data with their mini-computer, ultra-connected, always-online little smart phone. The iPhone has destroyed AT&T’s reputation for service, and created seemingly unreachable demand for bandwidth. There’s no going back now; a return to limited data plans would send customers away from any carrier who tried it in droves, especially current iPhone users.

“This app cannot be accessed, you’ve reached your data limit for the month.” Ha, right, like any of us geeks would deal with that kind of message popping up while we try to access Tweetie or Evernote? Not in a million years.

But my point is this. What happens with Apple releases the iPhone on Verizon’s service? On Sprint’s? On T-Mobile?

This could be bad, folks. Not doomsday scenario, end-of-mobile-service-in-the-U.S. kind of bad, but it’s not particularly good for the consumer. I’m certainly in favor of competition, but at what cost? At the end of the day tomorrow, will every customer in the U.S. be on a carrier with horrendous service because of overeager iPhone users sucking up the bandwidth from dreadfully under-equipped telecommunications companies? Will there be 18 million New Yorkers walking around cursing their service, as opposed to the few million AT&T customers now who do it?

Maybe the people in mid-size, midwestern cities will sit back all smug and laugh at all the hi-tech geeks on the east and west coasts trying to compete for data. Maybe in the end we’ll look back and all blame Apple.

Are other carriers ready to take on the iPhone burden?  What do you think? I have no doubt all the carriers will eventually upgrade their infrastructure enough to handle the increased demand for data, but it could be a while. As long as more people keep switching to smart phones–the iPhone isn’t the only one, by the way–there’s going to be more demand for data. It’ll be a while before this trend levels off.

Anyway, there’s your morning musings, folks. Have a good day.