AT&T is very confident the iPhone experience will overcome any perception of a steep price tag for the device, according to the Seattle Times. The newspaper cited Glenn Lurie, AT&T’s president of national distribution, as saying the buzz ahead of release has surpassed expectations.

"The anticipation that we’re seeing, the buzz we’re seeing, at least for me, has far exceeded our expectations of how important this would be to the business and us," Mr. Laurie said.

Even so, Brier Dudley was skeptical about the price gap between the iPhone and other phones, and he asked Mr. Laurie about how customers would react to a US$600 mobile phone.

"Here’s how I’d explain it," Mr. Laurie said. "The most popular iPod, a 4-gigabyte Nano, costs $200. If you’ve got a RIM BlackBerry or Palm Treo, you probably paid $200 minimum. Then you’ve got a phone that you got for free or paid maybe $50.

"You’re at $450 or $500. The question you’ve got to be able to ask yourself is, is this device going to be able to replace those three, so you carry one? That’s the question.

"I think when people get their hands on it and really experience it — the touch screen is phenomenal, this touch screen is like nothing you’ve ever used — to experience that, the skepticism, I think, around some of those things will go away.

"There are other things — you have the widgets, some of the Google applications that are coming — there are just so many things here that the price will not be an issue."

When asked about the [Safari] Browser in the iPhone and whether that might hurt AT&T, Mr. Laurie reiterated that the iPhone and its Browser won’t function unless the user has a package with AT&T.

Finally, Mr. Laurie had great praise for Apple’s design sense: "I think the other thing people haven’t really thought through is that Apple’s so good at simplifying things. That’s just what they’re known for; they’ve really simplified the phone. The standard phone applications are really intuitive, whether it’s receiving a phone call, putting that person on hold, adding another party and bringing a conference call together."

We all knew that Apple was very good at these these kinds of things. What’s encouraging is that the culture of excellence in the customer experience is bleeding over the fence and affecting (and infecting) AT&T as well. That’s a dynamic that’s been missing in the rest of the mobile phone industry.