Dropped iPhone Calls Really Are an AT&T Thing

When Steve Jobs introduced Apple's (Nasdaq: AAPL  ) iPad, his confession that its cellular access would be available only through AT&T (NYSE: T  ) brought audible groans from the audience.

The iPhone was notorious for dropped calls, particularly in the San Francisco Bay Area -- where the iPad launch was held -- and New York City. iPhone owners in those areas are known to have so much trouble with AT&T that they use Skype's iPhone app and a wireless network for iPhone calls. Some of their neighbors compromise with a two-device solution, carrying an iPod Touch and a cell phone from another service provider such as Verizon (NYSE: VZ  ) , Sprint Nextel (NYSE: S  ) , or Deutsche Telekom's T-Mobile.

Whose fault was it? AT&T took most of the heat, but it was never clear that the dropped iPhone calls were not the iPhone's fault. And last year's Antennagate episode with the new iPhone 4 was not exactly an endorsement of Apple's cellular-technology capabilities.

The proof is in the Verizon iPhone
A Verizon version of the iPhone 4 came out in January, to the delight of many an iPhone fan who prizes reliable cellular service. The rollout also allows us to answer that nagging question: Is the iPhone's dropped-call problem AT&T's or Apple's fault?

According to a March study by ChangeWave Research, AT&T is the reason the iPhone drops calls. Users of the Verizon iPhone 4 reported a 1.8% dropped-call rate, the same rate as users of other Verizon phones. Users of the AT&T iPhone 4 reported a 4.8% dropped-call rate, 2.7 times the rate of Verizon iPhone users.

AT&T has been touting network improvements since at least last summer, no doubt over concerns that Verizon would get the iPhone. The ChangeWave survey was last month. Just imagine what AT&T's dropped-call rate was before its network improvements!  

Foolish takeaway
Settling the dropped-call debate is a clear negative for AT&T. And it's a positive for Verizon, although concerns remain that if Verizon signs up too many iPhone users, its network could suffer from overloading and dropped calls, much like AT&T's.

Settling the debate could also boost iPhone sales, a positive for Apple. It could help mitigate some of the pressure from smartphones based on Google's Android, such as Motorola Mobility's (NYSE: MMI  ) Droid series or HTC's Thunderbolt, which was recently reported to be briskly selling at Verizon stores.

Just don't tell anyone "I told you so."

To stay updated on iPhone news, add Apple or any of the wireless carriers to our new free watchlist service today:

Fool contributor Cindy Johnson owns no shares of any company named above. Google and AT&T are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor choice. Motley Fool Options has recommended a bull call spread position on Apple. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (10) | Recommend This Article (8)

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 April 17, 2011, at 5:16 PM, Gnostradamus wrote:

    Wasn't the Verizon iPhone redesigned a little bit? Didn't Steve Jobs say iPhone 4 increased dropped calls by 1% (with the industry average at 1.5% or so)?

  • Report this Comment On April 17, 2011, at 5:49 PM, spencerj84 wrote:

    The survey by ChangeWave asked customers in March how many calls they dropped over the past 90 days. Verizon's iPhone 4 launched in Mid Feb only giving 2 or 3 weeks worth of data where AT&T had iPhone for the entire survey period.

    A better survey for this article would be the the drop call rate of Blackberry vs. Apple vs. Android vs. some other handset makers.

    While I dont live in New York or San Fran, I have 2 AT&T devices (1 work blackberry, 1 personal iPhone 4). While neither drops calls that often in my area, I cant remember a time when the blackberry torch dropped a call where the iPhone 4 drops 2 or 3 calls a month.

    Not saying AT&T doesn't have its issues in markets where it has more heavy users than it has capacity, but Apple might be to blame as well (just a little)

  • Report this Comment On April 17, 2011, at 8:58 PM, Henry3Dogg wrote:

    This isn't exactly news since the same GSM versions have been sold all over the world for 4 years without AT&T's dropped call problems.

  • Report this Comment On April 17, 2011, at 9:59 PM, AussieMac wrote:

    No dropout problems in Australia on Telstra - I think it is a AT&T issue. We enjoyed the free covers from Apple but didn't need them.. Also no drop outs on 02 in the UK

  • Report this Comment On April 17, 2011, at 10:37 PM, Jim98122x wrote:

    My friend in Miami just got a CDMA iPhone on Verizon. He complains that it drops calls all the time while his old phone didn't. I still believe the phone plays some role.

  • Report this Comment On April 17, 2011, at 10:58 PM, foolpost11 wrote:

    Wondering why these analysts keep hyping on Ipad2 and Iphone4. Just hope the delayed Iphone5 will carry more up-to-date components to ward off the Android devices flooding the market.

    Competition is good for consumers!!

    Lots of interests/stakes by big institutions, plus recent past Q:

    http://blogs.wsj.com/financial-adviser/2011/04/07/4-billiona...

    Android, Honeycomb/Gingerbread,Cloud music invasion would put more pressure early 2012.

  • Report this Comment On April 17, 2011, at 11:04 PM, jonkai wrote:

    it actually isn't a Verizon or ATT or an iPhone problem, it is a Government problem, as in NY and SanFrancisco governments will not allow Cell phone towers to be built without jumping through a hoop the size of the eye of a needle that is buried in a haystack that is itself buried on a different planet...

    NY and SanFrancisco deserve what wrath they have befallen their citizens...

    Verizon got their towers in those towns from hook and crook and buying out...

    but it still means that the problem lies with the Governments of NY and SanFrancisco and a few other cities.

    lets put blame where it really needs to be people.

  • Report this Comment On April 17, 2011, at 11:15 PM, therealanswer wrote:

    In my humble opinion the author is forgetting one very crucial element in evaluating an iphone from both carriers...the cellular radio. In order to have a fair comparison we must wait til the iPhone 5, where rumor has it that Apple will use on radio from Qualcomm that will handle both CDMA and GSM services. Apple uses a Qualcomm chip in the VZW version today and a different GSM chip in the AT&T version. It could be the use of a non-standard chip in the AT&T phone that could really be the problem, and we won't know until they are both built with the same components. This theory certainly explains why other phones on AT&T's network do not have nearly as many problems as the iPhone.

  • Report this Comment On April 18, 2011, at 12:29 AM, msteg01 wrote:

    comparison of new verizon handset to old handsets on the installed base of at&t networks - of course the older i-phones (at&t) have more problems than the new sets on Verizon.

  • Report this Comment On April 18, 2011, at 11:39 AM, tdc129 wrote:

    First off, this whole article is based around a survey whose results are purely based on opinion. As everyone knows perception is always greater than reality. When writing an article with splashy headlines like this, please try to incorporate actual data like those taken from independent drive testing firms who have ACTUAL results and not just opinions. AT&T dropped call statistics show less than a 2% drop rate throughout the country yet people are saying they "feel" as if they drop at a 4-6% rate on thier iPhone. Please. If all I read everyday on the internet was "AT&T has a drop call problem" then I would probably say that as well.

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