iPhone Attracts Vo-Fi Users

Implications: The iPhone has the potential to attract users who only want to use the music and Internet features of the device.  The significant issue is using the iPhone for Vo-Fi (Voice over Wi-Fi) instead of voice calls through the AT&T network.

Analysis: The iPhone is a combination of phone, music player and Web browser.  But does the phone have to be used on AT&T network?  The iPhone’s Internet capability creates the potential to be used for Vo-Fi (Voice over Wi-Fi).  AT&T can only argue that the purpose of the device is to be a phone on AT&T’s network and other usage is not authorized by AT&T.  AT&T cannot mandate that the iPhone be used on their network.  AT&T can require that buying an iPhone requires a two-year contract.  However, the iPhone owner can decide to use a different device for the usage of the two-year contract.  AT&T still has a subscriber, but not using the iPhone on the AT&T network.  To prevent a Vo-Fi user, AT&T would need a block to the Wi-Fi access of the iPhone unless activated on the AT&T network.  And unless activated, the Wi-Fi block could not be hacked.  For heavy travelers and international callers, the iPhone could be a second device to the regular wireless handset for only music and Wi-Fi.  The percentage of second device users is probably insignificant to the over 500,000 iPhone owners created during the first week of the launch.  The overwhelming percentage of iPhone owners replaced their current handset and will be calling on the AT&T network.