Apple's Cook Embraces AT&T, Defends App Store

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Draw up a list of iPhone-related snits and quarrels, and it's likely that two items will be near the top of most lists--AT&T's service and the App Store approval process. The former has come under fire from iPhone users who find the wireless carrier's coverage wanting and its unwillingness to add support for features like tethering mystifying; the latter raises the ire of developers frustrated by Apple's slow turnaround in OK'ing mobile apps.

Apple executives tackled both topics Monday during a conference call to discuss the company's first quarter earnings. And while the company's responses are unlikely to appease critics of either AT&T or the way Apple goes about approving iPhone apps, they do provide a glimpse into what Apple thinks of both subjects--a rarity for a company that tends to parcel out its public pronouncements like a miser does his gold.

Here's a quick summary of the issues at hand, what Apple executives said Monday, and one man's interpretation of the latest word out of Cupertino.


The Background: Among iPhone users, the exclusive carrier for Apple's smartphone is about as popular as Jay Leno's show in Conan O'Brien's house. In recent months, AT&T has finished last in a Consumer Reports survey on customer satisfaction with wireless providers. It's also had to concede that smartphone service has been particularly poor in New York and San Francisco, while at the same time suggesting that its users are consuming too much data. (Never mind that iPhone subscribers must pay $30 a month for unlimited data when they sign up with AT&T.) And iPhone users are still waiting for the carrier to support tethering, after AT&T similarly delayed support for MMS messaging.

What Apple Says: Piper Jaffray analyst Gene Munster brought up AT&T's bad press during Monday's call with Apple executives, asking them to list the virtues of sticking with a single carrier.

Apple chief operating officer Tim Cook responded by saying, "AT&T is a great partner... In the vast majority of locations, we think that iPhone customers are having a great experience." Cook also noted that AT&T has acknowledged the issues it's having in "a few cities" and alluded to the carrier's "very detailed plans" to boost its 3G coverage. (Indeed, earlier this month, AT&T announced it had deployed HSPA 7.2 at all its 3G cell sites.)

"We have personally reviewed [AT&T's] plans, and we have very high confidence that they'll make very significant progress toward fixing them," Cook added.

What We Think: Apple usually doesn't pass up the chance to ding partners if it feels the other side isn't holding up its end of the deal--remember last June's Worldwide Developer Conference keynote when Apple's Scott Forstall pointedly noted AT&T's tardiness with MMS and tethering support? So Cook's embrace of AT&T Monday is clearly a vote of confidence in the carrier.

Still, I wouldn't take that as a sign that the Apple-AT&T exclusivity deal--rumored to be ending this year--will go on indefinitely. There's no reason for Apple to bad-mouth AT&T's service and further put off would-be customers who may already be waiting for other carriers to enter the picture. And, if it turns out that Apple's Wednesday product event does include a tablet that--according to rumors--will include AT&T among the wireless service providers, it makes little business sense for Apple to pile on its iPhone partner. In that context, it makes perfect sense for Cook to give a measured endorsement of AT&T's network, with the promise of improved service to come.

The App Store

The Background: By many measures, the App Store has been a tremendous addition to Apple's arsenal. Since opening its doors a year and a half ago, the online store for iPhone and iPod touch apps has grown to offer more than 140,000 apps, topping 3 billion downloads earlier this month. On Monday, chief financial officer Peter Oppenheimer hailed the App Store as an "unparalleled success."

App developers who've run into a brick wall trying to get Apple to approve their offerings may disagree. Developers have complained that Apple provides little in the way of feedback, that apps are rejected for seemingly arbitrary reasons, and that there's often a lengthy delay between submitting an app and seeing it arrive on the store. With Apple as the sole gatekeeper and more developers lining up to build products for the iPhone, the situation doesn't figure to work itself out.

Perhaps that's why Charles Wolf of Needham & Company raised the issue of the App Store approval process during Monday's Q&A session. Wolf noted the criticism for delays and arbitrary guidelines and asked Apple executives whether the problem was the App Store approval model itself or the way Apple implemented it.

What Apple Says: Cook responded by pointing out that Apple approves 90 percent of iPhone apps within two weeks of submission. (A cynic might point out that's small comfort to the makers of the 10 percent of apps that take longer than that.) And while some apps get rejected for content reasons, Cook said, "most of the rejections... are actually bugs in the code itself. This is protecting both the customer and the developer to a great extent, because they don't want customers that are unhappy with the app."

"What you have here is something that, the noise on it occasionally may be much higher than the reality," Cook said. "With over 90 percent [of submitted apps] approved within 14 days, I think this is pretty good."

What We Think: It sure doesn't sound like Apple has any changes planned for its app approval process, beyond introducing the occasional tweak, such as its November move to give developers limited status updates on where their apps are in the approval process.

To be sure, Cook is right that you're more likely to hear about developers who run into approval roadblocks--developers who sail on through Apple's vetting are unlikely to kick up too much of a fuss. And that can create a skewed impression about how effective Apple's process really is.

Still, left unsaid was whether Apple thinks it can continue handling iPhone app submissions in this way, particularly if more developers bring more apps forward. As Matt Deatherage asked at last week, what happens when the amount of apps under review doubles from its current total? Does Apple hire more reviewers? Or does that two-week backlog grow a little bit?

Tim Cook's response on Monday provided some welcome context to the question about how long it takes for an app to reach Apple's virtual retail shelves. But it won't be the last word on the subject until Apple provides more clarity on its long-term App Store plans.

This story, "Apple's Cook Embraces AT&T, Defends App Store" was originally published by Macworld.

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