Is The AT&T Apple Marriage Having Its BP Oil Spill Moment?

It is still too early to tell what is really going on and of course this is only over a smartphone and not something as life altering as BP’s oil spill in the Gulf of Mexico, but from a PR perspective, this might just be the straw that broke the proverbial camel’s back in the Apple AT&T marriage.

Again, at the moment no one from Apple or AT&T is commenting on what appears to be a massive failure in their combined systems for pre-ordering the new iPhone. But from what we are hearing, (and experiencing) it sounds pretty bad. Whether you try the Apple Store on the web or the AT&T website you’ll be met with errors, messages that your order can’t be processed, and well frustration. A local friend told me that he tried the local AT&T store and Radio Shack here (they are next door to each other) and neither could process an order, although AT&T would gladly take your credit card number and call you back.

Gizmodo is reporting that there may be some security issues going on, and other anecdotal failures as well. Many of the early finger pointing is being aimed at AT&T since other sites, including Apple, have to interface with AT&T to check on accounts before bestowing the “generous” upgrade pricing.

Technologically, this will all get worked out in the long run, although there will be some yelling and screaming. But Apple has taken a lot of flack for hanging onto its exclusive with AT&T for so long in the wake of that network’s failures that this might be just enough of a public humilation to change that pattern. AT&T has become such the butt of a national joke that is quickly moving beyond the cliche stage into the cultural icon phase. Apple had been on a roll on many fronts, but as the leader of the pack Apple has been taking shots from everyone including the Federal Government on its policies. So neither company is in a position to withstand a big disaster, which this will turn out to be if it goes on much longer. (I think the problems have been running for about 7 hours or so now.) Neither Apple or AT&T are free flowing when it comes to communicating problems (witness the iPad security breach) and look for ways to save face more than to assuage frustrated customers, so it will be interesting to see how this whole thing plays out.

Of course once it is all worked out, it will be interesting to see if the demand that is obviously contributing to the server and system issues continues at the same pace. It’s easy to let people laugh at you when you’re making money hand over fist at their expense. But you can only play the “heavy demand” spin game so far and so many times. With the baggage that has accompanied the iPhone/AT&T saga so far, it might prove to be too heavy a load to spin it that way again.

Picture via Gizmodo

11 Comments

  1. GET

    06/15/2010 at 11:25 am

    Steve, have you broken another network!?!?

    Reply

  2. Ben

    06/15/2010 at 11:33 am

    And this is different from previous “New” iphone launch with the 3G?

    Reply

  3. Yoda IBM

    06/15/2010 at 11:39 am

    Steve,
    The Force is within everything and makes everything work together. Cooperation it is. Accommodate it does. Control, and dominate it does not! Exclude and isolate it does not. Proud self possessed nerds it avoids. Marketing and image, the dark side they are. The Force, a PR appellation it is. Better to call it the Pull, the Attraction, the Working.

    Reply

  4. GoodThings2Life

    06/15/2010 at 12:25 pm

    I want to say I agree with you, but AT&T and Apple are completely immune to what customers actually *want*. Indeed, they tell customers what they want, and the customers fall in line like lemmings on practically every Apple product launch. Will demand fall? No way… if you tell people everyone wants our product, that’s why there are problems, well they just try harder to beat the problem to get what everyone else wants.

    Reply

    • Warner Crocker

      06/15/2010 at 5:46 pm

      Yep, while the engineers responsible for the network woes at Apple and AT&T are probably feeling like they have a gazillion vuvuzelas howling in their heads, the accountants and execs are laughing all the way to the bank.

      Reply

  5. aftermath

    06/15/2010 at 12:41 pm

    I fear that the name that Apple’s marketing department selecting for this device is going to explode in AT&T’ face. This is the 4th device in the series, but in terms of the hardware it really is like the 2 nd or 3rd generation of the phone (many documents call this phone “3,1”). It’s not a huge reach to call it the “iPhone 4”, but it’s enough of a reach to make me wonder “why?”. I suspect that Apple’s decision to title this device “iPhone 4” was partially motivated to cash on the forthcoming swell of hype for Sprint’s 4G network and devices that will support it like the HTC Evo 4G. Average consumers aren’t exactly well informed or careful, and I’m sure a lot of people re-map “iPhone 4” to “iPhone 4G”. I know they do. I’ve read it all over the web this last week.

    I’m legitimately alarmed by how many times I’ve seen this next version of the iPhone referred to as the “iPhone 4G”. Do a search for this erroneous term on Google or Twitter. You’ll be shocked by how many people write this and where it turns up. The problem here is that AT&T doesn’t have a 4G network for the iPhone, and the iPhone doesn’t have the radio for a 4G network. There WILL be people who want the brand spanking new 4G because it’s the trendy technology but want a super trendy Apple phone too. They’re going to get their imaginary “iPhone 4G”, and when they compare it to their friend’s 4G phone on Sprint and realize that what they bought isn’t what they think that bought, it’s of course going to be all AT&T’s fault for not having a 4G network and not Apple’s fault for branding the phone with a potentially confusing name. Doesn’t anybody sees this as a VERY avoidable problem that’s bounded to hurt AT&T?

    Reply

  6. Sumocat

    06/15/2010 at 1:39 pm

    Wow. Sucks to be all of those morons standing in an actual line. Me, I’ve been standing in a virtual line from the comfort of my office. Just got through.

    One word of advice: for current customers, shipping is limited to your AT&T billing address. Problem for me since that’s my home address and no one will be there to sign for delivery, so I changed it to my work address and will change it back later. Why anyone would wait in two actual lines is beyond me.

    Reply

  7. eplasm

    06/16/2010 at 12:18 am

    In brief response to aftermath’s comment … I think we are all equally capable of determining that the ‘G’ in IPhone 4G = 4th Generation version. Or maybe it should it have been named the IPhone 4V = 4th Version, so as not to confused the easily befuddled masses

    Reply

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