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AT&T Preps for Heightened Verizon iPhone Competition

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By SHARA TIBKEN

NEW YORK—AT&T Inc. cut its price for Apple Inc.’s iPhone 3GS to $49 from $99 as the carrier prepares for heightened competition from a Verizon Wireless iPhone launch expected early this year.

AT&T, which currently is the exclusive network operator for the iPhone in the U.S., said the iPhone 3GS will be available at the lower price starting Friday. The iPhone 4, released in June, sells for $299.

The move comes as AT&T faces increasing pressure from customers and critics alike, who have complained about the reliability of the company’s wireless data and voice network. Additional competitive pressure is expected from new smartphones showcased at the Consumer Electronics Show in Las Vegas this week, and from Verizon Wireless once it starts selling the iPhone, potentially as early as the first quarter.

AT&T added a record number of iPhone subscribers in the third quarter but paid a heavy price to do so. While the activations require AT&T to pay Apple high subsidies that cut into its near-term profit, they also lock in new and existing customers to a two-year contract. AT&T is banking on those contracts to blunt any potential defections if the carrier loses its iPhone exclusivity.

The latest offer from AT&T is available to both new and certain existing customers and requires a two-year wireless-service contract of at least $39.99 a month, plus $15 data plan.

AT&T isn’t the first company to discount the iPhone, with retailers such as Wal-Mart Stores Inc. and Radio Shack Corp. offering promotions.

—Tess Stynes contributed to this article.

Apple iPhone Alarm Fails, Again.

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Happy 2011! As many of you may have already noticed, Apple tried to help you ring in the new year by making you sleep in the first couple mornings of 2011 thanks to another alarm clock bug. Don’t worry though: now that it’s January 3, this particular problem should have remedied itself. But how long until the next one?

Like the Daylight Saving Time bug before it, the New Year bug was first exposed by our friends in New Zealand, who discovered that their non-repeating alarm clocks simply wouldn’t go off once the calendar flipped over. iPhone users across Asia, and then Europe, also unexpectedly got to sleep in on New Year’s Day. By the time morning came to the US, many of us had become aware of the bug—but that didn’t stop it from affecting a few readers here and there.

The glitch only affected people who had set non-repeating alarms (the DST bug from November 2010 affected both repeating and non-repeating ones), and Apple confirmed with Engadget that all alarms would begin working properly again on January 3 (that’s today). So, if you missed the hubbub, you don’t have much to worry about this time around. Still, some of us are left uneasy: this is the second iOS alarm problem to expose itself in two months. When will the next one strike, and will iPhone users ever be able to trust their phones to wake them up on time? You know how the saying goes: fool me once, shame on you. Fool me twice..