UPDATED: Apple Snubs AT&T, Hoses Early iPhone Buyers


Photo: Gizmodo So much for Apple helping its partner AT&T, the iPhone’s exclusive U.S. wireless carrier, with its wish to look more like an entertainment company. Steve Jobs just rolled out two major iPhone/iPod features — a wi-fi iTunes music store and an iTunes ringtone tool — but cut supposed partner AT&T out of the picture. Just as important, Jobs/Apple delivered a slap in the face to those who bought iPhones during the launch hype — by cutting prices up to $200. To us, this move suggests the phone is not selling as well as Apple had hoped.

iTunes users can now create iPhone ringtones themselves (after paying an additional 99 cents for songs they’ve already bought). And iPhone/new touchscreen iPod owners can now buy music over wi-fi via a mobile iTunes store. Neither of those functions touches AT&T’s cellular network, meaning Apple doesn’t have to share a penny with AT&T. And AT&T loses any chance of capitalising on its fast-growing iPhone user base by selling music or ringtones through competing services — a growth point all wireless carriers are heavily counting on as voice revenue continues to decline.

Even Apple’s new partnership with Starbucks to give iPod/iPhone users free wi-fi iTunes store access in their coffee shops (a nice feature, but not a game changer) sticks it to AT&T: Starbucks’ Internet provider is T-Mobile, one of AT&T’s biggest mobile phone rivals.

And a tip of the hat to my colleague Peter Kafka, who correctly predicted last week that Jobs would unveil ringtones and a touch-screen iPod but would not be bringing the Beatles to iTunes just yet. Apple releases: Wi-Fi store, iPod touch, Starbucks

Updated: Apple’s iPhone Gaffe Explained: It’s Intentional!, iPhone Refund Confirms Sales Below Plan

Related: Analyst: iPhone Price Cut Is Good News, Source: No Beatles on iTunes Next Week, iPhone On Track To Hit Apple Benchmarks