Where does AT&T go when the iPhone exclusivity ends?

AT&T has a couple tricks ready to try to recover from its reputation for poor quality and the imminent availability of the iPhone on Verizon

Wannabe iPhone users like me are rejoicing at the imminent iPhone availability in the United States from a carrier other than AT&T. (Verizon Wireless today announced that it will begin selling iPhones on February 10, with existing customers able to pre-order one on February 3; see InfoWorld's FAQ on the Verizon iPhone's differences.) AT&T's poor network in many areas has frustrated iPhone users and prevented many more potential customers from getting an iPhone. And losing the iPhone exclusivity could really hurt AT&T, for which the iPhone represented about 65 pecent of its smartphone sales in the last quarter.

But don't pity poor AT&T. The carrier has been preparing for the day when rivals get the iPhone, and many users may find themselves sticking with or even switching to AT&T.

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First, let's be clear on AT&T's problem: Its network coverage and capacity are poor in several large cities, including San Francisco, Washington, D.C., and New York, where many technophiles live. Thus, iPhone users in those cities tend to suffer -- loudly. My own experience with AT&T 3G on my iPad bears that out; I usually get better 3G service in places like Boston, Palm Springs, Bakersfield, and Phoenix than I do in my hometown of San Francisco and its surrounding Bay Area suburbs. Where you live and work is a major factor as to whether the AT&T network is a problem or not. The tech press -- which is concentrated in cities that have poor AT&T networks -- sometimes forget that our experience is not everyone's.

Also, AT&T has about twice as many smartphone users on its network than Verion does, according to my calculations: 53.0 million versus 21.4 million. So AT&T's network has a lot more load to handle. And although AT&T loves to claim its network is faster, the truth is its speed advantage is a theoretical one that AT&T rarely delivers on in practice.

Still, whatever the technical realities, surveys show regularly that AT&T's customers rate its service poorly (it usually comes in dead last), and those respondents come from all over the country. So, AT&T can expect to see its iPhone growth level off or even shrink as Verizon and perhaps other carriers get the iPhone.

To combat that, AT&T is making a few changes.

For several years, AT&T has gotten exclusive rights to the more business-oriented smartphones, cementing a professional user base. In addition to the phenomenally popular iPhone, it had the popular BlackBerry Bold as an exclusive for six months and now has a similar exclusive for the well-regarded BlackBerry Torch. It also will have an exclusive deal for the forthcoming Motorola Atrix, the innovative "post-PC" smartphone that can dock to a monitor and keyboard.

AT&T has focused on having the best, most innovative smartphones, and it will redouble its efforts now. Ironically, it'll rely more on the iPhone's main rival to do so: the Android OS. Verizon Wireless has been the biggest champion of Android devices in the United States, with hits such as the Motorola Droid, but AT&T is moving fast to ride the Android horse as well. If Windows Phone 7 or WebOS ever become viable, you can bet AT&T will cherry-pick devices on those platforms as well.

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