AT&T Sticks It to Apple, Again

If you rushed to buy an Apple (Nasdaq: AAPL  ) iPad 3G to be grandfathered into the unlimited data plan that AT&T (NYSE: T  ) is no longer marketing, the joke may be on you.

Apparently, AT&T's data security has been breached, exposing the email addresses and iPad unit identification numbers for roughly 114,000 early adopters.

It could be worse. There are no Social Security numbers, credit card accounts, or embarrassing hero worship letters addressed to Steve Jobs that were revealed in the hack. It's just a nuisance.

What's your excuse, AT&T?

Let's count the ways that AT&T has tripped up Apple.

  • Spotty network coverage, particularly in New York City and San Francisco, made it easy for Verizon (NYSE: VZ  ) to hit hard with the "there's a map for that" ads.
  • The iPhone is a data-slurping contraption, so AT&T trips up Apple, App Store developers, and future iPhone owners by curbing usage through setting up metered tollbooths.
  • Just two months after charging buyers a $130 premium on iPads with 3G connectivity on the promise of unlimited data for $30 a month, AT&T strips away the unlimited option for new accounts.

AT&T's miscues have to hurt Apple. It may not seem that way because the company is rolling. It cleared 2 million iPads in less than two months (though that includes non-3G models). It sold more than 8.7 million iPhones in its latest quarter (though a lot of that is now abroad, where AT&T isn't an iAlbatross).

One can only imagine how much bigger those numbers would be if there wasn't an exclusivity deal with AT&T. One has to wonder why all of AT&T's missteps aren't grounds for smoking out a wider variety of carriers.

There's probably plenty of fence-straddling going on, with consumers waiting for Verizon Wireless or Sprint Nextel (NYSE: S  ) to give consumers a choice on locked iPhones.

Oddly enough, the only companies that may want to see AT&T's exclusivity continue with Apple are iPhone rivals Research In Motion (Nasdaq: RIMM  ) , Motorola (NYSE: MOT  ) , HTC, and Nokia (NYSE: NOK  ) . They're moving plenty of handsets through Sprint and Verizon Wireless, and Apple would eat into that business.

So AT&T's comedy of errors and meter maids are hurting Apple as it props up rival carriers and smartphone makers.

What's the deal, Apple? Didn't your mother always tell you to watch the company you keep?

Is AT&T good or bad for Apple? Share your thoughts in the comments box below.

Nokia and Sprint Nextel are Motley Fool Inside Value recommendations. Apple is a Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz wonders if AT&T's overtaxed network is why his iPhone turns into a paperweight when he hits Sun Life Stadium with 75,000 fellow Miami Dolphins fans. He does not own shares in any of the stocks in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 10, 2010, at 3:24 PM, NWCubbyBear wrote:

    This should be an editorial instead of journalism. Not sure where this venom and caricasy stems from Rick. Did AT&T or Apple hurt you and you have not healed. Seek therapy.

  • Report this Comment On June 10, 2010, at 3:45 PM, skavanag wrote:

    I bought an iPad 3G without the intention of signing up for an ATT data plan. I bought the 3G for the GPS which a marine navigation app uses. Don't automatically think the only reason to buy a 3G is to surf the Web. There are plenty of GPS-based services out there that don't use a cell-tower infrastructure.

    I love the iPad....hate AT&T's service. In fact, I am one iPhone user who is not renewing until there is another carrier. After 2 years of terrible AT&T service in Southeastern Massachusetts - especially with repeated dropped calls - I am dropping AT&T and getting a Tracfone until another carrier is available. The iPhone 4 looks gorgeous and I'd buy one in a heartbeat...but not with AT&T.

    If I were to get another smartphone...it would have to be Android-based just because there aren't many other viable options.

    AT&T is killing Apple now....

  • Report this Comment On June 10, 2010, at 4:21 PM, skiric0 wrote:

    I never have problems in deep south Texas and routinely watch mlb baseball games on my iphone. So it must be true that this phone is a bandwidth hog, I'm just lucky there aren't many phone hogs on the border. Soon as those new Cisco routers are up and running, the winers will enjoy the cheese and crackers with their wine.

  • Report this Comment On March 21, 2011, at 1:13 PM, smitty000 wrote:

    Simple answer/conclusion. Go with Verizon 4G. LOL

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