Why Apple stuck with AT&T for iPad

Apple named AT&T as the U.S. 3G network provider the new iPad on Wednesday despite hearing iPhone users complain about the carrier's network for years.

Meanwhile, widespread rumors and stories in the press that Verizon Wireless and AT&T would jointly provide 3G coverage for the new tablet proved false.

Questions over the selection of AT&T and the false Verizon Wireless rumors ultimately boil down to whether AT&T can handle the iPad from a wireless perspective. Maybe the most critical application test will be whether the iPad can handle streaming video over 3G as well as much faster Wi-Fi.

We try our best here to answer some of the most pressing questions from Apple fans and potential users of the new device.

Why did Apple pick only AT&T for 3G in the U.S. despite the complaints about the carrier from iPhone users?

Evidently, it was convenient. Phillip Redman, an analyst at Gartner said Apple had already done the design work for AT&T’s GSM/WCDMA network on the iPhone. The time and cost to develop the iPad for Verizon’s CDMA network would have been too high, he suggested.

To be clear, the 3G versions of the iPad are all going to be sold unlocked, and equipped with a GSM micro SIM, Apple said. That means that, starting in June or July, international users could buy a 3G version of iPad and use it with the GSM provider of their choice.

It remains unclear whether an unlocked iPad could be used on another U.S.-based GSM network, such as T-Mobile USA. Apple officials couldn’t be reached today to clarify this point. But it is unlikely, considering that Steve Jobs called the AT&T pact a “breakthrough deal in the U.S.” mostly because of the $30 monthly fee for unlimited 3G data.

An AT&T spokesman refused to call the Apple deal “exclusive,” referring questions about distribution plans to Apple. However, the AT&T spokesman, Mark Siegel, did say in an interview that “We’re delighted AT&T is the U.S. 3G provider for the iPad.”

Is AT&T up to the latest task after disappointing many iPhone users?

Well, AT&T says, at least indirectly, that it’s ready for the iPad. Said spokesman Siegel: “We have a great relationship with Apple. We’ve been the leading smartphone and broadband provider for close to two years now.”

Asked how AT&T would respond to questions from potential iPad customers who are worried about AT&T’s iPhone performance, Siegel cited comments made by Apple COO Tim Cook during Apple's Jan. 25 earnings call. “AT&T is a great partner,” Cook said in response to a question. He added that iPhone customers in the vast majority of locations are “are having a great experience.”

Presumably, Cook was setting the stage for the company’s response to similar questions from potential iPad buyers.

Wednesday’s Apple iPad press release notes that the 3G version of iPad is equipped to handle wireless speeds of 7.2 Mbit/sec over HSDPA. AT&T has been rushing to upgrade its 3G networks to this HSDPA 7.2 standard, with 25 cities coming on in 2010.

However, AT&T still won't say whether any of those cities support 7.2 standard yet, or precisely when they will. Also, analysts have noted that 7.2 Mbit/sec is still theoretical throughput and actual speeds may be much lower.

Can the iPad really view streaming video and run other bandwidh hungry apps over 3G, or will users of those applications have to rely on Wi-Fi connections that feed into fat pipes to the Internet?

Several analysts are unsure what the answer to that question will be. Video will likely stream to the iPad over 3G, as it does today with the iPhone “but,” Redman noted, “the quality most likely be low over cellular.” Jack Gold, an analyst at J. Gold Associates, agreed with Redman.

Redman added that high definition video quality “maybe be restricted to Wi-Fi just because that would make the user experience so much better than over 3G.”

Nobody is really sure how well AT&T’s HSDPA 7.2 will work, or how widely available it will be in April, when the 3G versions of iPad ship.

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