Really, the way I see it, Apple could give a crap what anyone that isn’t named Steve Jobs thinks about what it should or should not do. Apple Stock took a hit for the MacBook Air, but I don’t think Apple is too worried about that. They identify a market and go after it. They push innovation (remember, they killed the floppy and everyone cried foul!). What took the place of floppy drives for sneaker net? USB flash. Who saw that coming?

Get over yourself. Apple does what Steve says. Steve decides who he listens to, and he doesn’t really listen to customers.

Quickly, off the top of my head, at least the following:
1. Simpler activation (not in the store)
2. Visual voicemail
3. $20 flat rate unlimited data (with some exceptions) using a “real” browser.
4. Elimination of the subsidy distortion that hides the true cost and value of the phone, combined with the concept that the phone itself should hold its value for more than 2 years (with continual upgrades).

“But could competition have done the same thing? Imagine if the iPhone had been sold without a contract. You’d have suddenly had a million people looking for a data contract with either AT&T or T-Mobile. Competition between AT&T and T-Mobile (not to mention some of the small local phone companies) would have given you the same discount.”

The two companies know that you need a contract, and know that many people are buying it, so why would they necessarily lower their prices? You don’t know that you could’ve gotten the discount.

But the bigger picture is that for Apple and iPhone to succeed, the carrier needs to succeed. If the carrier doesn’t succeed, no other carrier will copy the model (of unlimited and unlimited access (no walled garden) flat-rate data that includes everything including VoIP), so nothing is changed. So Apple can’t abruptly or radically cut off the carrier’s current source of revenue; Apple will need to demonstrate that it can get the carrier additional revenue through new customers (volume), thus, allowing the business model to change.

As I noted earlier, this is what is happening in the music download world with regard to DRM; songs and iPods were crippled with DRM. As for your CD burning example, Apple probably pointed to the fact that CDs were already rippable and burnable, and with some steps to inconvenience mass reproduction, burning music downloads would not be a problem. Note also that movies are not burnable, probably because DVDs can’t be ripped except with “legally questionable” software.

Remember also iTunes was originally only a Mac-only trial; Jobs said the labels would not agree otherwise until they saw that burning wasn’t a problem. And also remember that the iPod is crippled in terms of copying songs back onto the computer; the Wifi music store is the first step that allows controlled movement back. (I know there are computer hacks that break this restriction, but Apple still can’t allow it in iTunes.)

Finally, let’s see what changes after Leopard gets released, as iPhone is closely connected to it.

Apple gets lots of criticism for being a bit of a lone wolf; then they partner and take even more flak. Apple’s market position has always been the underdog. MSFT can tap Ted Waite and Micheal Dell to go out and bribe IT departments to get PC sales in; Apple has to go directly the USER, and, unfortunately, the USER is a relatively powerless entity. Before the Apple Stores, Apple had to rely on pimply-faced Doom-addicts in CompUSA to sell Macs– we all know how that worked out. Now, having rescued the music industry from irrelevance, Apple has tried to push the industry into the post-DRM era. The labels, intent, it seems, on self-immolation (to preserve a sense of control– or out of spite) are undercutting THEMSELVES to try to pump up iTunes competitors (AMZN, etc). It’s tough to go against the Windows establishment even when you’ve been offering hands-down better options for over 20 years. But, change is happening, slowly.

The very same thing that the customer got when Apple partnered with the big music labels when they introduced the iTunes Music Store: 100+ million iPods, 3 billion songs, a company that passed Dell and HP in market value, without which Apple wouldn’t be around, to say nothing of the iPhone.

For Apple to take risks and innovate it must be financially successful. Apple doesn’t ship tens of millions of other phones so that it can experiment with the iPhone like Nokia does with N81. If the iPhone were to flop, it would have a colossal impact on AAPL. If N81 flops, Nokia will surely survive. So Apple’s margin of error on the iPhone is razor thin.

How does strategic design strategy frame the problem here?

Do you support an endless number of radio standards around the world or GSM? If the answer is GSM, there are really two significant players in the U.S.: AT&T and T-Mobile. Do you select T-Mobile or the largest carrier in the nation to go against Verizon? The choice of AT&T is a no-brainer, once the decision on GSM is made.

Now remember the activation problems AT&T had during the initial days? This is the nation’s largest carrier after months of preparation for the iPhone launch. Now imagine having many carriers to contend with with an unlocked iPhone. In terms of technical integration (not just Visual Voice Mail) or marketing coordination, that’s problematic for Apple and thus its customers.

Equally important is the loss of several billion dollars Apple will get from AT&T as a steady revenue stream in the next couple of years alone.

You see, the AT&T partnership gives Apple a known, steady and lucrative platform to launch a most critical and high-risk product. Just as the big label partnerships did for digital music. Without this cushion, I’m afraid the iPhone would have amounted to not much more than N81, which justifiably you hadn’t heard of. How does that benefit the iPhone customers?

Example: Ringtones. There’s no way Apple could allow customers to make their own ringtones from music they already own without offending the music labels, right? So you’re saying that Apple came up with a “compromise”–they’ll sell ringtones, but they’ll do it cheaper than everybody else.

Now let’s flash back to 2001 or so. At the time, the music industry was quite upset over people burning their own CDs. There were various pushes in Congress to make laws to solve this problem (taxes on blank CDs, some sort of hardware copy protection, etc.). Apple was negotiating with the labels. I’m sure they weren’t thrilled with this idea that people could pay 99 cents and burn music to CDs. Apple stood it’s ground and said, “People want to do this. People expect to be able to do this.” They won and people can buy music from the iTunes Store and burn it to CDs.

Your solution is that Apple should have offered some kind of token payment? “Okay, the songs cost 99 cents each but if you burn it to a CD, you pay an extra penny per track?” You know how well that would have gone over with customers?

I’m now going to ask for a little explanation here. I’ll highlight where I’m confused.

“[Motorola and Nokia] haven’t for instance, challenged operators’ overwhelming dominance in price negotiations, design of device hardware and software, contract terms or service accessibility.”

“Should Apple take into consideration the needs of its carrier partner (AT&T) when deciding what goes into that package? How can it not?”

These two things don’t seem to go together. How is it that Apple negotiated the ability to control their own product but still has to kowtow to the needs of AT&T?

Furthermore, AT&T’s 450 minute plan and their unlimited data plan cost $79.98 (39.99 + 39.99). AT&T’s 450 minute plan with unlimited data for the iPhone is $59.99. So I suppose Apple did manage to get a 25% savings.

But could competition have done the same thing? Imagine if the iPhone had been sold without a contract. You’d have suddenly had a million people looking for a data contract with either AT&T or T-Mobile. Competition between AT&T and T-Mobile (not to mention some of the small local phone companies) would have given you the same discount.

Remember, all those people were lined up for an iPhone–not for AT&T. Do you think that those people would not have been lined up if the phone was sold unlocked? Why? Because of Nokia? Heck, the first time I’d heard of the Nokia N81 was when you mentioned it. In other words, Nokia certainly hasn’t been advertising it.

So I’ll ask the question: What does the customer get out of Apple’s partnership with AT&T that they wouldn’t have gotten if Apple had released it unlocked?

Indeed, Apple could include 100 other features without blinking. But this is version 1.0. There will be many other versions. Other markets. Other demographics. As Apple stated, this is the third leg of revenue for the company, in addition to computers and music. They are building a third of their company anew.

Contrast the first-gen iPod and the iPod touch of today. Pretty stunning pace of innovation and in only five years. Did Apple cripple, say, the 2nd or 3rd gen iPods because they could have put in Wi-Fi but didn’t? Can we really say that the iPhone is crippled because it doesn’t have 3G or GSM?

As I keep saying, technology packaging is a matter of balance. Should Apple take into consideration the needs of its carrier partner (AT&T) when deciding what goes into that package? How can it not? Why wouldn’t Apple want to include iChat otherwise? Do you really think Apple is being incompetent or simply contemptuous of its customers?

The fact of the matter is that Apple has some sort of a business plan over multiple years to gain a significant/leading share of the smartphone/mobile convergence device space. Part of that business model involves subverting the device-maker/carrier landscape. You can do that either by being an outsider or by leveraging your assets to negotiate yourself into a winning position. My assumption here is that the iPhone released with no carrier contract — essentially an iPod touch — would have not managed to alter the alignment in the device-maker/carrier landscape. Just as I’m betting that Nokia N81 won’t either.

Once again, without crippling the iPod in certain ways that allowed Apple to package its devices and services and secure big label support, there’s absolutely no way we would have seen 100 million units and 3 billion songs sold. That’s the cold, hard reality.

You’ll never get everything you want from Apple. Or from anybody else. That doesn’t mean that Apple is selling you out.

Actually, the satisfaction numbers you mention are pretty real. I think the mistake you make is your assumption that the vast majority of early-adopters of the iPhone are the technical cognescentii.

I’ve seen three people with iPhones since they came out here in Orange County and Los Angeles. One of them was a former co-worker–a former fashion model. She is certainly not a “geek.” She’s the only one that I know, but I feel pretty comfortable that at least one of the other two was not a “geek” either (I admit–I’m judging by appearance and that’s it).

Also, let’s face it. For all I may bitch and moan about what’s missing in the iPhone, the reason I’m bitching and moaning is because I want one. I used my former co-worker’s iPhone for about an hour and was ready to go buy one that afternoon. It’s a really great device.

But most of the people I’ve seen on the web talk about their iPhone say, “I love my iPhone, but I really wish it would do this…” I know I would feel that way if I had an iPhone. But I would probably list myself as “satisfied” or “very satisfied.”

But here’s a comment you made that stuck in my craw:

“[Motorola and Nokia] haven’t for instance, challenged operators’ overwhelming dominance in price negotiations, design of device hardware and software, contract terms or service accessibility.”

Now, maybe I missed something, but I don’t see it. I agree that Nokia and Motorola haven’t done this. But I don’t see that Apple won any great victories either.

As I’ve speculated in each message here–AT&T is preventing Apple from doing iChat because it would impinge on MMS (text messaging), which AT&T makes money off of. You’ll notice that AT&T’s iPhone plan does not include unlimited text messages. So it sounds like AT&T has some say in the design of the device software.

Why can’t I use my iPhone as a way to link my MacBook to the Internet via Bluetooth? Because AT&T is charging a flat rate for data and, therefore, does not want you doing potentially bandwidth-intensive things. As we all know, “all you can eat” works fine as long as you don’t eat too much. AT&T wants to ensure that you won’t be costing them money.

So, once again, it sounds like AT&T has some control over this as well. Same with streaming music and other things.

Meanwhile, there’s Nokia’s N81–your cautionary tale. Yet here’s Nokia taking a risk. They are trying to sidestep the providers entirely and sell unlocked phones which link to Nokia’s services (sounds like the iPhone to me). To me, this sounds like a good plan. To succeed, though, Nokia is going to have to market it like crazy. One advantage you get going through the network providers is that they’ll sell and promote your phone for you. Not so here–Nokia’s going to have to take that on all by themselves. That means TV, Radio, and Print advertising–something I don’t see them doing.

So here’s the problem in a nutshell: I don’t see how Apple is “changing the way that the game is played.” It looks like the same-old-same-old to me. Meanwhile, Nokia–who appears to really be trying something new–gets your scorn.

Furthermore, even assuming that Apple is “changing the way that the game is played,” I have yet to see how this is actually helping the customer. Apple’s negotiations may have helped Apple, Inc. And that may be why Wall Street is cheering. But, once again, where’s the love for the customer?

Apple has released three new things in the iPhone that weren’t there on launch: YouTube, .Mac integration, and iTunes.

YouTube? Well, okay, Eric Schmidt sits on Apple’s board.

.Mac integration? Interestingly, there are only two ways to get photos off of your iPhone. Method 1, hook it to your computer. Method 2, give Apple $99 a year for .Mac. Want to upload your photos to Flickr? Sorry. Using a PC? Well, .Mac won’t do you much good. You’d better go buy a Mac.

iTunes? Yup, you can now give Apple 99 cents for a song or a ringtone from any WiFi hotspot (once again, note that you can’t use AT&T’s network for this. Bandwidth, bandwidth, bandwidth!)

So the first things we see from Apple? Ways to give Apple more money! To use a phrase that Wall Street likes–that’s synergy! Maybe it will work out just as well as the synergy within Sony and their various attempts to compete against the iPod…

Meanwhile, people are asking for things like Keychain support (to hold passwords and such, like on Mac OS X), disk mode, RSS in Safari, call duration, AirTunes, and batch of other feature request that I’ve seen just looking around the web for a few minutes.

But, then again, where’s the synergy in that? Low priority.

Now, I’m also going to once again mention that I am speculating on AT&T’s amount of control over the iPhone. It stands to reason, granted, but I have no insider information that tells me it is so.

Why no iChat for iPhone? It could be AT&T or it could be the simple fact that there’s a whole new “chat architecture” is new in Leopard, allowing third-party developers to leverage iChat. Why port the old iChat when there’s a bunch of new and exciting capabilities in Leopard. So ship them in Leopard before trying to get them onto the iPhone.

Why no Bluetooth modem support (ie, using your iPhone to attach your laptop to the Internet)? Low priority. Apple implemented and tested enough Bluetooth to get their headset working and that’s it. Trying to do the whole Bluetooth stack would have taken too long.

Why can’t you use iTunes Store on AT&T? Apple decided that EDGE is too slow.

So there is another explanation than the one I’m proposing–that AT&T is blocking these things. I’m not sure I believe it, granted, but it could very well be the case (especially with iChat).