At Monday’s WWDC 2009 keynote address, Phil Schiller looked nominally less lousy than the last few times he’s spoken.  It’s pleasant that Steve Jobs is expected to return to work by the end of the month, since Schiller really never showed the chops to serve up the same excitement and buzz of Jobs.

In full disclosure, following Steve Jobs onto an Apple stage would be like having the Rolling Stones as our opening act.  It’s a rare group who could exceed expectations.  For Schiller, though, it was likely his best chance to show his board a capacity for being the public face of the organization.  Though not a failure, few would call Phil’s performance a success.

Was the product less interesting than previous launches?  It would be unfair to compare Schiller and Jobs if one had a materially more interesting thing to launch.  Here, Phil gets some leeway -- since the new iPhone pricing and American launch is so screwed up that I’m left wondering how Tim Cook still has a job.

Let’s look first at the pricing plan.  The major challenge is that AT&T won’t subsidize upgrades (in full disclosure, this includes both my 3G iPhone and my wife’s 2.5G iPhone) for most existing customers, which leaves those millions with an interesting problem:

1. Do we pay AT&T $175 (or less) to cancel our contracts, then get a $200 discount on the new iPhone, or do we pay $200 more than the announced price to Apple to get the new iPhone.
   

In the realm of pricing, this is a colossal bungle.  Sure, it’s a partnership.  Sure, AT&T wants to make money on the iPhone usage.  Sure, Apple should get paid for delivering a cool product.  But when the network carrier’s subsidy is more than the cost to cancel, someone is in for an ugly shock.

How many people will it take to cancel their contract and buy a new phone before Apple and AT&T realize they’re both screwed?  Do the math:

1. What’s the cost to cancel a contract?  It’s more than zero, since it involves a variety of systems.  Then the cost to subsidize the phone is likely less than the stated $200 discount.  AT&T collects money that Apple could be collecting itself, but is spending money and causing customer churn to do it.
   

The pricing gets even less attractive given many of the new features won’t work on the AT&T network!

MMS? Great feature.  It’ll work by late summer, at best, and requires a manual update...of the millions of iPhone accounts

Tethering?  Super idea.  Not available at this time.

Faster network?  Yeah, let’s hope they get this one right.

The irony that AT&T has done such an impressive job at expanding their network while Apple takes an innovative product and launches it in a half-assed way is a total role reversal.  Who would ever think they’d see that?!

So, will I get the new phone?  Is Verizon Wireless really going to be offering them soon?