The growing disenchantment between Apple and AT&T.

Apple's Worldwide Developers Conference may be as close as the corporate world gets to an old-fashioned revival meeting. Software engineers, gadget addicts, and live bloggers faithfully gather before a gigantic black screen while Steve Jobs—or, more recently, a shorter, blander simulacrum—elicits rapturous applause by unveiling feature after feature that will make their lives incrementally more interesting. You are encouraged to applaud. You are not supposed to laugh—except at Microsoft (MSFT).

This week, when Apple (AAPL) fans gathered again in San Francisco for the conference, there were the usual outbreaks of applause, but scattered between them was irreverent laughter—not at a rival but at AT&T (T), Apple's exclusive and controversial wireless partner for the iPhone. After Scott Forstall, Apple's senior vice president in charge of iPhone software, explained that 29 wireless carriers around the world were supporting MMS technology (which sends things like photos and music through text messages) for the iPhone, their logos appeared on the big black screen behind him. Then he added, "AT&T will be ready at the end of the summer."

The faithful had a good laugh at that, and they laughed again when it became clear AT&T would also delay support for tethering, or using the iPhone to connect a laptop to the Internet. And yet again when they learned that the S in iPhone 3G S stands for speed—an oxymoron on AT&T's clumsy, congested network where dropped calls are the norm and large files intended for broadband download like it's 1999. AT&T says it's upgrading its 3G networks to handle speeds of 7.2 megabits per second—the new iPhones are built for those faster networks—but the "upgrades are slated to begin later this year, with completion expected in 2011," AT&T says. Sigh.

The growing disenchantment with AT&T by even Apple's more loyal followers is starting to become a problem for Apple. Steve Jobs has rooted the company's brand in his vision of enhancing the consumer's experience. Apple wasn't the first to come up with an MP3 music player or a smart phone, but it significantly improved on what others had been offering with a product that seemed radically simpler, more intuitive, and more elegant. Apple products may cost more, and they have drawn criticisms for locking users in to Apple's software. But to Apple, those were small sacrifices to be made on the altar of the enhanced consumer experience.

So it's strange that Apple chose an ally in the wireless industry that was infamous for treating consumers with callous indifference. AT&T would chide other carriers for "slamming"—switching phone service without the customer's permission—but it had no problem slamming others (as it did to me some years back). The company has raised rates in hard times, bitterly fought Net neutrality, and once blocked wireless callers from dialing in to free conference calls.

So why did Apple choose AT&T? Apple first sought an alliance with Verizon. But Verizon (VZ) wouldn't bend to Apple's terms, such as a share of monthly revenue from iPhone plans, control over where the iPhones would be sold, or even who could look at the iPhone before it launched. AT&T—then offering wireless under the Cingular brand—was happy to meet Apple's demands. Apple shunned Verizon, despite its history of high customer satisfaction. So today, AT&T draws new customers with the hottest smart phone on the planet, while Verizon struggles with a less stellar lineup. Verizon users will be able to use the Palm Pre if they can wait until next year.