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New iPhone, New Gripes About AT&T

Stocks in this article: AAPL T

Brilliant partnerships occasionally end in tears, and there's starting to be some loud whining by Apple (AAPL) customers unhappy with AT&T (T) -- the exclusive network service provider for the iPhone.

During the introduction Monday of Apple's new iPhone and in the days following, grumpy legions of Apple fans have aired their complaints about AT&T.

Chief among the complaints are network quality issues like dropped calls, poor signal coverage, slow data speeds and the most recent insult: AT&T can't or won't support a few new features on the iPhone S.

One service Apple highlighted in its presentation is tethering, or connecting a notebook to the iPhone for wireless data access. Another is multimedia service or MMS, a messaging technology that lets users quickly send songs, pictures or video to other iPhone or smartphone users.

To tech watchers, the lagging feature support sends troubling signals about AT&T's ability to keep up with the wireless data boom that the iPhone and other smartphones have created. These concerns come as AT&T's hopes to renew its exclusive pact with Apple, which expires in one year. Meanwhile, lurking in the background is Verizon (VZ), which would love a new Apple device to help launch its upcoming 4G network.

An AT&T representative says tethering is coming but couldn't provide a time frame. And he said the MMS service will be available in "late summer" as the company makes some "final system upgrades."

The concerns about an underpowered network in an overpowered phone market come as AT&T has been pinching pennies this year. Ma Bell slashed $2.5 billion from its 2009 capital spending budget, and is on track to spend about 15% less on network maintenance and upgrades than the $20 billion it spent last year.

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