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Apple: We're Confident AT&T Can Fix iPhone Issues

Apple executives insist that exclusive U.S. iPhone carrier AT&T is a great partner, despite well-publicized issues that have many subscribers fuming over a perceived lack of sufficient 3G service levels.

In a Q&A during Apple's fiscal first quarter earnings call Monday, Piper Jaffray Senior Analyst Gene Munster asked Apple CFO Tim Cook to reiterate the benefits of carrier exclusivity agreements such as the one AT&T enjoys with the iPhone. As he has done in the past, Cook said nothing to suggest that Apple is growing tired of hearing AT&T's iPhone subscribers complain about subpar 3G and voice service.

"AT&T has acknowledged having some issues in certain cities, and they have detailed plans for addressing these. We have personally reviewed these and have very high confidence that they will make progress in fixing them," Cook said.

Cook suggested that criticisms of AT&T's 3G service should be weighed against the size of its global subscriber base. "It's important to remember that [AT&T has] more mobile broadband users than any other carrier in the world. In the vast majority of locations, we think iPhone customers are having a great experience," Cook said.

Since the iPhone is designed to run on AT&T's network, Apple would have to develop a CDMA version to allow it to run on Verizon, which has been the subject of months of rumors as a potential alternative. Speculation is also flying thick that Apple's rumored forthcoming tablet device could come in GSM and CDMA versions, which would make it available to both AT&T and Verizon.

Apple sold 8.7 million iPhones during its recent quarter, representing 100 percent unit growth from the year-ago quarter and a healthy uptick from the 7.4 million iPhones sold during the previous quarter. But with more iPhone growth being driven more and more by international markets, it would make sense for Apple to allow other U.S. carriers to sell the device.

For AT&T, would the end of iPhone exclusivity be that big of a deal? There has been speculation that AT&T is getting fed up with the damage to its image wrought by iPhone subscriber complaints. After all, AT&T claims that just 3 percent of its smartphone customers use up roughly 40 percent of its wireless broadband bandwidth. One analyst recently estimated that AT&T would need to spend $5 billion on network upgrades to address the situation.

One thing's for certain: If Apple opens iPhone sales to other carriers, and these carriers also begin to experience 3G service issues, AT&T's critics will be eating heaping portions of crow.

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