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AT&T responds to iPhone 3G S pricing and (lack of) features [UPDATED]

June 8, 2009 |  6:44 pm

AT&T San Francisco -- AT&T looked battered and bruised coming out of today's keynote at the Apple Worldwide Developers Conference (WWDC).

Apple announced a bunch of cool features that would be built in to the new iPhone 3G S when it's available June 19 -- multimedia messaging (MMS) for sending photos, videos and location data, Internet tethering to access the 3G connection from a computer, and faster 3G broadband Internet.

Problem was none of those would be supported by AT&T, the sole U.S. carrier for Apple's smartphone, at launch.

The reality incited boos and hisses from the audience during Apple's announcement, and there was no AT&T representative at the conference to defend the company. But AT&T spokesman Steven Smith assures us that all of those features are coming in due time.

"We absolutely will offer MMS on iPhone 3G S," Smith said. "We're expecting that to be available in the late summer."

But why, as many tech bloggers have pointed out, can't they immediately offer a service that's been available on nearly every other cellphone for the past couple of years?

Smith says there's a technical limitation. AT&T must upgrade ...

... its system to support MMS. But that didn't stop 29 other wireless carriers covering 76 countries from having it ready for launch.

But what about iPhone tethering, which allows you to connect the phone to your computer to access the Internet wirelessly via Bluetooth or using the USB cable that also charges the device? Twenty-two carriers in 42 countries will offer it at launch (again, none of which are AT&T).

Smith says his company definitely plans to offer a tethering service, but it has no dates or prices to announce.

"Typically there's a monthly charge associated with that,"Mark Siegel, another AT&T spokesman, said of Internet tethering. "We have not announced what that will be."

Fine. Faster 3G Internet? AT&T this year said it will support the high-speed 7.2 wireless technology that the iPhone 3G S is built to take advantage of.

The 7.2 standard allows a theoretical download speed of up to 7.2 megabits per second. It doesn't always perform at that speed, but wow! That's like a song download every six seconds or so. Surely, that should at least be close to done? Not so fast.

"AT&T plans to begin deploying ... 7.2 later this year," Smith said. "We anticipate completing that upgraded 3G network by 2011."

The iPhone is a cornerstone of AT&T's device lineup. The company has activated 5.9 million iPhone 3Gs in the year that it's been available. That figure doesn't include those who bought the original phone. Thanks to pricey data plans, iPhone users generate 1.6 times more revenue for AT&T than the typical customer.

If the lack of support from AT&T isn't enough to deter immediate adoption of the 3G S when the phone comes out June 19, maybe the price points for existing customers will.

New and qualifying (those not currently bound by a contract) customers get the competitive 3G S prices -- $199 for the 16-gigabyte model, or $299 for the 32-gigabyte version. But an AT&T subscriber who wants to upgrade their iPhone 3G but is still under contract would have to pay $399 and $499, respectively. Consumers who want the phones without a contract, tack on an additional $200, bringing the price to $599 for the 16-gigabyte version and $699 for the 32-gigabyte model.

"You know, we really feel we've priced this at something that provides our customers with great value," Smith said. "We're certainly hopeful that our customers find that to be the case."

Do you find that to be the case?

Corrected, 8:08 a.m.: A previous version said the 7.2 3G wireless Internet technology is capable of download speeds of up to 7.2 megabytes per second. In reality, it can reach 7.2 megabits per second. Later in the story, the original version said that customers who want the phone without the contract should add $100. Fuzzy math. In fact, it's $200 more than the early upgrade price.

-- Mark Milian and Dan Fost

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