I, Cringely . The Pulpit . What's in a Name? | PBS:
The iPhone is this amazing connectivity quad-mode device that can probably make use of as much bandwidth as it can get, so making it suck through the little straw that is EDGE makes no sense from a user perspective. But remember that the parties involved here are Apple and Cingular, neither of which is 100 percent allied with user interests. Cingular has a 3G network called BroadbandConnect or "MediaNet" if you buy Cingular's associated Cingular Video service.
And there's the problem -- Cingular Video, which is based on RealVideo, NOT QuickTime or H.264.
Apple wants the iPhone to get its content primarily through iTunes, ideally by syncing with a Mac or Windows PC. Apple doesn't like Cingular Video and doesn't want its customers to know it exists, much less use it. But it would be very hard to introduce a true 3G iPhone, have Cingular promote it strongly, only to say that it can't be used to view the mobile carrier's own video content. So instead Apple falls back to the slower EDGE network, which can support email and widgets and surfing, but which also forces iPhone users to get most of their higher-resolution video through iTunes, where Apple makes money and Cingular doesn't.
It comes down to an accommodation. Cingular wants an iPhone exclusive and is probably paying Apple money for that privilege. Apple doesn't want Cingular Video. So the only elegant way around that problem is to make the iPhone incapable of operating on the 3G network. If you watch his Macworld keynote you'll notice Jobs says that Apple may eventually make 3G iPhone models. Yeah, right: I'm 100 percent convinced that all it would take to turn an EDGE iPhone into a 3G iPhone is a firmware upgrade, if that.