Media Wonk

Here's a pop quiz on Apple's $200 iPhone price cut.

Q: What's the worst feature of the iPhone?

A: The slow, AT&T wireless data network it forces you to use.

Q: How could Apple improve the iPhone, given its excluisve service provider agreement with AT&T?

A: Create an iPhone without the phone.

Q: How would you describe the iPod Touch?

A: An iPhone without the phone.

Q: What does the iPod Touch cost?

A: $399.

Q: Would you buy an iPhone with crappy wireless service for $599 if you could buy all the same features without the crappy service for $399?

No need to answer that last one. And no need to wonder why Steve Jobs made no mention of AT&T either in his comments from the stage announcing the price cut, or in his (remarkably ungracious) open letter to iPhone users announcing the $100 credit the company is offering the suckers who stood in line to buy at $599.

An angry-enough AT&T could probably have cooked up a plausible cause of action against its "partner," Apple, had Apple cut the legs out from under the iPhone market by selling one for $200 less without AT&T.

AT&T's tepid endorsement of the move tells you all you need to know about how things are going in that relationship.

"We're very pleased with the customer response from the iPhone before. We expect this new pricing will be even more popular," AT&T's spokesman Michael Coe said.

I wonder what really thrilled sounds like at AT&T?

Apple cut the price because it had to. It may yet make a virtue of necessity, but I doubt the move was really strategic.

It does, however, tell us something about the eagerness of device makers and online content providers to find a way around the wireless carriers.

From the start, Apple insisted on leveraging the iPhone's WiFi capability to establish its own service relationship with users, running in parallel with AT&T's relationship. Now, only a few months into the relationship, Apple is already moving to bypass AT&T altogether by creating the iPod Touch, which does everything the iPhone does except make calls.

The most significant news to come from Apple's announcement, in fact, could be it new relationship with Starbucks. If all goes according to plan, Starbucks cusotmers will soon be able to wireless browse, search for, download and buy music and movies from Apple's WiFi Music Store using their iPod Touch, iPhone, wireless PC or Mac. No cell phone services needed.

A new "Now Playing" feature will even automatically identify the song currently playing in any Starbucks location for iPhone and iPod Touch users, allowing them to instantly purchase and download the track. Clearly, Apple plans to use the iPhone's WiFi capability to establish a network of wireless services that have nothing to do with AT&T.

The same week as Apple's announcement, handset maker Nokia made its own end-run around wireless carriers, announcing the Nokia Music Store and a WiFi-enabled phone to communicate with it directly. Significantly, Nokia made the announcement before any wireless carrier has agreed to support the new phone, presumably on the expectation that the new service and phone will be attractive enough to consumers that wireless carriers will have no choice but to get on board.

In the meantime, an emerging de facto alliance between handset makers and online service providers could become a significant counterweight to wireless providers in the regulatory and legistlative battles to come over open access to wireless broadband networks.