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1/26/2010
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Apple Defends iPhone Partner AT&T

The iPhone maker says it's confident its exclusive U.S. carrier will improve the network traffic problems that have plagued users.

Despite complaints from iPhone customers, Apple is standing by AT&T, the exclusive carrier for the smartphone in the U.S.

In a conference call with Wall Street analysts on Monday, Timothy Cook, Apple's chief operating officer, acknowledged that AT&T's mobile broadband network is slower than AT&T would like in cities with a high concentration of iPhones, such as New York and San Francisco. AT&T says it is in the process of improving service.

"We have very high confidence that they'll make significant progress in fixing them (traffic problems)," Cook said.

He noted that outside of the problem areas, Apple's own research shows that iPhone customers are having a "great experience" in using the smartphone.

Cook made the comments after the company reported a 50% increase year-over-year in profits in the fiscal first quarter, to $3.38 billion. Revenue increased by a third to $15.68 billion.

Cook also addressed questions about developers' complaints with Apple's process for deciding whether to accept an application for the App Store, where customers can choose from among more than 100,000 applications, many of them free, for the iPhone and iPod Touch. Some developers say Apple is inconsistent and sometimes unfair in taking down or refusing to post an application.

Cook said the majority of applications are approved within 14 days of submission, and that most of the rejections are due to bugs in the application's code. "What you have here is something where the noise may be much higher than the reality," Cook said of the complaints.

Cook deflected any attempts to discuss Apple's upcoming product announcement. On Wednesday, Apple is scheduled to unveil a new product at a San Francisco event. While Apple has not said what it will introduce, industry watchers and many analysts believe the company will launch a tablet computer that will be a combined electronic book reader, multimedia player, and personal computer.

Cook declined comment on whether he believed the new product would generate significant revenue in the current fiscal year. "I wouldn't want to lessen your joyous surprise when we unveil our latest creation on Wednesday," he said.

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