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As expected, AT&T is benefiting from its exclusive relationship with Apple. The telecommunications company reported on Thursday that it has 2 million iPhone customers. iPhone monthly sales figures doubled in December.

As the US market becomes saturated with mobile phone users, the telcos rely more on getting customers and corporate accounts to switch providers. As I discussed on 13 January and 11 January 2008, carriers and manufacturers are rushing new handsets and features to market. it’s a new level of competitive rivalry, and the timing is good for consumers and corporate accounts. Stockholders may suffer, however.

Wired has published a brief history of the iPhone’s development, as mentioned in Engadget. As I mentioned to my IS 7010-T students last Thursday, it is well known that Apple CEO Steve Jobs is a difficult boss. This article provides a few examples of how he led Apple to develop the iPhone, a device that has spurred almost every mobile phone manufacturer and carrier to reevaluate their business models… even Microsoft.

I have 4 more papers to mark this evening, but I’m almost done with the IS 6100 Paper 2 drafts.

Meanwhile, here’s an article from Engadget. There’s a new Blackberry model that offers WiFi connectivity on T-Mobile’s network: the Blackberry Curve 8320.

A similar model (the 8310) offers GPS capabilities instead of the WiFi feature. There’s only so much room inside the phone, so it’s one chipset or the other – not both.

It’s up to the carrier to offer the GPS, WiFi or both versions. So T-Mo went with WiFi.

Engadget also ran articles about a GPS service for iPhones last Wednesday. It’ll do until Apple adds real GPS hardware to the next iPhone.

Sinead Carew of Reuters writes that AT&T and Apple are being watched closely by tech analysts as the June 29th debut of the iPhone approaches. If AT&T stores, web sites, call centers or data services can’t handle the strain, the iPhone introduction could be a Newtonesque flop. Technorati is full of blog posts about the iPhone.

AT&T has a five-year exclusive on the iPhone, so other carriers have been beefing up their offerings. Verizon is now marketing ESPN’s mobile features, which were once part of ESPN Mobile. That service died in 2006, as I reported in my old blog on September 29.

Today, YouTube posted a video clip of Google CEO Eric Schmidt using an iPhone. Google bought YouTube last year, and is also providing some web apps for the iPhone. Schmidt is also an Apple board member. Take a look at 24:30 minutes into the 32-minute clip - it seems Schmidt still needs a bit of practice with his iPhone.

Walt Mossberg brandished his new iPhone during a meeting with college presidents last week. Walt seems a bit worried about the virtual keyboard, and I can’t blame him. Touch typing on an iPhone is impossible. Mossberg’s reviews in the Wall Street Journal can make or break new technology products, so it’s no surprise that Engadget ran a story with a reference to the Chronicle of Higher Education’s original post.

It’s worth noting the the Chronicle’s story spawned a long trail of comments, many of which disputed CenterNetwork’s US$1936 estimate for a user’s first year of iPhone service. I mentioned that figure in my June 6 post.

Management professor Sandy Piderit of Case Western Reserve University isn’t shy about her desire for an iPhone. She’s already opened a wireless account with AT&T, and is considering waiting in line on June 29th to get one. Better wait in line at a rebranded AT&T store, as initial quantities will be quite limited, according to multiple reports. Franchisees and resellers won’t get iPhones.

The iPhone isn’t a business device

Piderit compares the iPhone to the Blackberry and the Treo. She missed the mark: Apple isn’t pursing business customers, and they are the core demographic for the two devices she mentioned. As Wayne Sutton notes, the iPhone may drive more business to BlackBerry, a platform that has several years of brand equity and reputation.

The iPhone is really competing with consumer data devices like Helio’s MySpace phones and T-Mobile’s Sidekick line. I switched from a Cingular 8125 to a Sidekick 3 in April. Frankly, the Sidekick 3 has been more reliable than the Cingular 8125. The only 8125 feature that I miss is WiFi, but I can still use that device without the GSM card. The iPhone will support WiFi data connections.

The iPhone is just an iPod with a data phone

At its heart, the iPhone is a video iPod with a data phone. My Sidekick 3 can accept a miniSD card, so it’s trivial to install additional storage memory. The iPhone has no memory card slot. The initial iPhone models offer 4 or 8 GB of memory, enough to hold few hundred songs on an iPod, but barely enough capacity for videos. As most iPod users know, the iPod is useless without a companion computer. See my March 21 post for more discussion.

Sandy really likes the visual voice mail feature. However, US cell phone users can switch their voice mail to a free service like CallWave and get that feature no. Of course, the visual feature requires a computer. The iPhone will display voice mail on the phone itself.

The only way that third party apps will get into the iPhone is through the Web. While I can install apps directly to my Sidekick, iPhone apps have to work in the Safari web browser. I’m not sure which approach is better. Web-based apps are easier to update - just patch the server. But web-based apps also require a data connection. As I mentioned on April 17th, the mobile web might be the best opportunity that telcos have to build new value into their services.

So I’ll wait for the iPhone to prove its worth. If it’s a success, AT&T will drop prices to a reasonable level within 12 months.

UPDATE 21 June 15:05 HT: AT&T has told stores to get ready for cattle, er, crowd control. Read Clover Thoughts for more details and a screenshot of AT&T’s email to store managers.

USA: Cell phone customers are getting nickled-and-dimed by telecoms, as T-Mobile, AT&T Wireless and others charge customers directly for Federal fees. Congress intended the telecoms to pay the fees themselves. Clever accountants realized that by passing the fees through to customers, the fees would count as revenue. This practice makes a wireless phone bill long and difficult to read. “The explosion of line items has made it all but impossible for consumers to compare rates and shop around,” FCC Commissioner Michael J. Copps said in March. “You need a lawyer and an accountant — preferably both — to root out what you’re being charged for and why.” FCC docket number 04-208 would require telecoms to build the fees directly into their rates, so that wireless consumers know exactly what they will be charged for their plans.