"AT&T struggled to keep up with the load iPhone users placed on its data network, taking most of the PR hit for failings that may have had as much to do with th

"AT&T struggled to keep up with the load iPhone users placed on its data network, taking most of the PR hit for failings that may have had as much to do with the iPhone’s immature hardware and software as with AT&T’s network." Come again? There's zero evidence that it had anything to do with the iPhone, outside of the fact that iPhone users actually, you know, used their data plan. The bottom line is that the iPhone outcome caught ATT on their heels. It's really easy to look at the success story of the iPhone now and consider ATT to be fools for not having prepared, but when the iPhone launched, it was a $500-$600 unsubsidized phone. This was something that virtually no one was doing in the US. There were serious questions as to whether Apple would be successful when executing in the face of what looked like a complete violation of conventional wisdom. I'm sure that more than one ATT senior exec thought it would flop, or be business as usual. Apple sold a couple million in short order. The author does make a good point about how Apple has hacked the carrier model though. By rolling the phone out with no subsidy, Apple placed a bet on its own horse. Once it was proven a success, other carriers rushed to jump on the bandwagon. Now carriers are happy to pay high wholesale rates to Apple for their phone in exchange for a lock in on rate plans that are higher margin than a straight voice plan. Consider also that the cell phone market is saturated. There aren't a large number of subscribers coming online. That is to say, most people who want a cell phone have one. The majority of users have feature phones, however. These phones don't require a data plan, so moving subscribers to smartphones is the last revenue expansion frontier for the carriers. It all adds up to a very sweet deal for handset manufacturers who can distinguish themselves and command high prices.