The primary reason was that AT&T was the only cellular carrier that would play ball with Apple. . . all the rest wanted Apple to play the old way. . . allow carrier apps, carrier logos, and limited functionality unless the subscriber paid extra for each addition. Apple refused to go along with that program and persuaded AT&T to go with the whole enchilada for a single price structure. However, AT&T was fearful of load on their infrastructure, especially their newly installed and growing 3G network which was only available in certain core markets. . . so AT&T insisted that as part of their price to agree to accepting Apple's terms, Apple could NOT install a 3G radio in their new phone. . . lest it overwhelm AT&T's networks. Only 2G Edge connection would be allowed.
Apple had to force a re-negotiation of their contract with AT&T before the iPhone 3G could be released, because the original agreement was a FIVE YEAR lock-in. Thank goodness that Apple had enough clout by then they could do that. Insiders say that Steve Jobs threatened to throttle manufacture of iPhones unless AT&T would renegotiate the onerous terms. . . AT&T blinked! Jobs also required that AT&T had to move aggressively on both expanding 3G and 3.75G (called 4G) in that new contract. . . and ended exclusivity in the US. That was one hell of a lot of clout! What kind? iPhone was accounting for better than 60% of the phones sold by AT&T!
I agree with fireman, I’m a sprint customer so my evolution curve on smart phones ultimately went through android. Android only took me so far, I’ve switched my last three phones back to GS3.
Now, Sprint has royally hacked me. My last android phone, an HTC OneX, turned into a brick during a software upgrade and Sprint blew me off when I complained. (switched back to GS3.)
After 14 years of being a Sprint customer, I’m changing to Verizon (best cell at my rural home per several neighbors). I may even buy my first IPhone. Time and availability will tell...
Thank you for the explanation. I had no idea what the motivation was for the original iPhone not having high speed cellular data. At the time my brother was on Verizon using a PCMIA data card and used a Motorola Razr phone. My Sprint plan for the PPC-6700 was less than what my brother paid just for his data card. My tethered phone provided just as fast of a connection and he had some type of cap on his usage.
For me there is no greater recent example of how important capitalistic competition than the advances made in “smart phones”. I have been using the same laptop for several years. It was one of the cheapest I could find when my previous laptop quit working. Recently one of the hinges for the display broke so I started looking to see how many improvements had been made since I purchased it. There were not enough improvements to justify a new purchase. I was able to fix it instead.
In the same time period the capabilities of tablets and phones have increased greatly while the price has dropped significantly. Every Android user should be thanking Apple for making such great products and every Apple user should be thanking Samsung and other major Android manufacturers for making such great products. It is this brutal completion that has fueled major advances to the point where all of these tiny devices now are much more powerful and much easier to use. People who buy entry level DSLRs and mirrorless cameras should be thanking Samsung, Apple and other manufacturers for putting such great cameras in their phones and tablets. Camera makers have had to greatly improve their products because phones and tablets now have cameras that are very good.
I have never purchased an Apple product, but I do thank them for making such great devices. I have got an amazing Samsung Gear 2 watch which interfaces with my phone. My grandson saw it the other day and he asked me if it was an iWatch. I said, “No the iWatch hasn't been released yet.” So he almost immediately lost interest and started bragging about his dad's iPhone 6 and told me he was hoping his dad would give him his iPhone 5. But I am sure when the iPhone comes out it will force Samsung to up the ante with its wearable tech products. Already amazing products will improve even more.