iPhone mysteries: Cringely on EDGE

Cringely, one of my favorite writers, has a plausible theory on why the iPhone uses dial-up speeds for its phone connection:

I, Cringely . The Pulpit . What's in a Name? | PBS

... The iPhone is this amazing connectivity quad-mode device that can probably make use of as much bandwidth as it can get, so making it suck through the little straw that is EDGE makes no sense from a user perspective. But remember that the parties involved here are Apple and Cingular, neither of which is 100 percent allied with user interests. Cingular has a 3G network called BroadbandConnect or 'MediaNet' if you buy Cingular's associated Cingular Video service.

And there's the problem -- Cingular Video, which is based on RealVideo, NOT QuickTime or H.264.

Apple wants the iPhone to get its content primarily through iTunes, ideally by syncing with a Mac or Windows PC. Apple doesn't like Cingular Video and doesn't want its customers to know it exists, much less use it. But it would be very hard to introduce a true 3G iPhone, have Cingular promote it strongly, only to say that it can't be used to view the mobile carrier's own video content. So instead Apple falls back to the slower EDGE network, which can support email and widgets and surfing, but which also forces iPhone users to get most of their higher-resolution video through iTunes, where Apple makes money and Cingular doesn't.

It comes down to an accommodation. Cingular wants an iPhone exclusive and is probably paying Apple money for that privilege. Apple doesn't want Cingular Video. So the only elegant way around that problem is to make the iPhone incapable of operating on the 3G network. If you watch his Macworld keynote you'll notice Jobs says that Apple may eventually make 3G iPhone models. Yeah, right: I'm 100 percent convinced that all it would take to turn an EDGE iPhone into a 3G iPhone is a firmware upgrade, if that.

Mobile phone carriers are eager for video to succeed on their 3G and 4G platforms because it represents a major new source of revenue. Apple's iPhone is the best handset yet for displaying that video. But Apple isn't going to allow this to happen without Cupertino gaining a substantial piece of the action. I'm sure discussions are taking place right now with Cingular where Apple is arguing that the carrier should make its video service iTunes-compatible.

The media and the market's ecstatic response to the iPhone will put strong pressure on Cingular, which has what is apparently a multiyear exclusive with Apple. If Cingular gives in, as I'm sure it will, the iPhones will suddenly become faster and have more features. And if Apple is correct, Cingular will then have the mojo to take them to the top of the U.S. mobile market.

And what happens when the Cingular exclusive ends? We can probably look to Europe in the months ahead for hints on that. Apple doesn't intend simply to enter the mobile phone market, they intend to dominate it, and ultimately to gain service revenue through iTunes, no matter whose phone you buy.

Speaking of service revenue, word is the iPhone will work like Jobs original Macintosh vision -- a closed device with software produced only by carefully vetted and controlled developers. Software will be sold through the iTunes store only ...