The iPhone has swamped AT&T’s data network and sparked a consumer rebellion.

AT&T has stumbled into a quagmire. When it secured exclusive rights to support Apple’s iPhone on its wireless network in June 2007, investors hailed the deal as a masterstroke. Here was stodgy, safe AT&T positioning itself to gulp profits from a cutting-edge technology. But AT&T and Apple vastly underestimated the iPhone’s appeal. At launch, Real Steve Jobs said he’d be happy if the device could grab 1% of the global cell-phone market, or about 10 million units for 2008. Instead, Apple has sold at least 42.4 million—25.1 million in 2009 alone, 14% of the global smartphone market. AT&T, which markets the iPhone in the U.S., simply can’t handle the traffic.  Business Week

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