Wired  has a huge, comprehensive piece up about the relationship between Apple  and AT&T since negotiations over the original iPhone began back in 2007. For those who have been following the life of the iPhone obsessively, there's a lot we already knew--but there's also some particularly juicy tidbits from some anonymous sources.
Those anonymous sources aren't necessarily to be discredited out of hand: Any Apple employee blabbing to the press about these upper-level meetings would certainly be axed, so the fact that the quotes are anonymous doesn't make them false. Of course, it doesn't make them true, either, but for the most part the story squares with what we've heard already in terms of attitude.
AT&T's network is disappointing, especially in some major cities, like San Francisco and New York City, where the iPhone is particularly popular. What's interesting is that AT&T was and is fully aware of its network shortcomings. The carrier actually asked Apple to impose restrictions on its iPhone software to ease the load on the network. Those requested restrictions, back in 2007, focused on YouTube: Could Apple perhaps make YouTube a Wi-Fi-only feature, stream at a heinously low resolution, or simply cut off videos after one minute? Apple, of course, refused to budge, telling AT&T those issues were "not our problem. They're your problem."
There are lots of other fun little details, including a killer quote from one of Steve Jobs's deputies. When an AT&T rep suggested Jobs wear a suit to meet with AT&T's CEO, the deputy replied, "We're Apple. We don't wear suits. We don't even own suits." Zing!
Then, of course, there are the Verizon iPhone rumors . There are, as we already know, two primary reasons why it hasn't happened yet: contractual obligations and technical hurdles. AT&T and Verizon use two entirely different wireless bands, necessitating a totally new chipset--it's not as easy as plopping an iPhone in a Verizon store. And, of course, AT&T has exclusive rights to the iPhone in the States for an unclear period of time.
But according to the Wired piece, that hasn't stopped Jobs and the other Apple higher-ups from Apple "seriously" considering a switch to Verizon as early as a few months after the original iPhone's release in 2007.
The group — which included iPhone software boss Scott Forstall — took the job seriously, even visiting the San Diego headquarters of Qualcomm, the company that supplies the chips for Verizon phones. But in the end, switching to Verizon would have been just too complicated and expensive. The new chips were a different size, which would require Apple basically to rebuild the iPhone from scratch. Meanwhile, changing carriers could mean voiding AT&T’s exclusivity agreement and inviting a nasty lawsuit. And it wasn’t clear that Verizon would be an improvement; at the time, it wasn’t any better equipped than AT&T to deal with the iPhone’s bandwidth demands.
Check out the piece --it's a pretty interesting look at the politics inside the AT&T/Apple relationship, and how that relationship changed the very way smartphones are made and sold today.