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AT&T may have had iPhone exclusive extended for iPad deal

updated 03:05 pm EDT, Thu May 6, 2010

ATT possibly buying time through cheap iPad plans

AT&T may have used the launch of the iPad to buy a last-minute extension of its iPhone exclusivity deal, BroadPoint AmTech analyst Brian Marshall claimed late Wednesday. He believed that AT&T cut its deal for $30 unlimited, contract-free iPad data in exchange for extending its sole rights to the iPhone in the US until 2011. The evidence was the purported rejection of a Verizon iPad deal that Marshall's sources had said was virtually certain.

Marshall didn't cite any direct evidence of a delay in a Computerworld interview.

AT&T is widely thought eager to draw out its exclusivity as long as possible and may have allowed the heavily subsidized iPhone 3G in 2008 in return for an extension until 2010. It had been struggling to compete with Verizon up until the iPhone deal and since then has regularly posted record quarters where many, if not most, of its net subscriber additions were iPhone buyers.

Verizon is currently larger and growing but has counted mostly on its Alltel buyout for its numerical advantage. It has repeatedly tried to offer "halo" phones as a lure, but until Android phones like the Motorola Droid and HTC Droid Incredible hasn't had much success. These phones have sold well relative to Verizon's lineup but have usually sold at considerably slower rates than the iPhone.

The currently second-place AT&T may be aware of the potential for a sudden halt to its growth should the iPhone be available at another major US network. A recent study by ChangeWave has pointed out that as much as 19 percent of existing Verizon customers would buy an iPhone and that the possible defection rate at AT&T is lower than at most other carriers because of the iPhone, at 8 percent. When the exclusivity ends, analysts have speculated that AT&T may see a large-scale defection to whichever other carrier has the Apple handset, primarily in areas with oversaturated AT&T networks like New York City and San Francisco.

Marshall now estimates that a Verizon launch at the start of 2011 could see it sell as many as 11 million iPhones by itself, or enough to compete with results like those seen by AT&T in the past year.



By Electronista Staff
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Comments

  1. lkrupp

    Junior Member

    Joined: May 2001

    +6

    Ho boy...

    The news just gets worse and more worse for at&t haters/Verizon fanboys.

  1. ebeyer

    Fresh-Faced Recruit

    Joined: Jun 2004

    +5

    Duh

    Of course it had its exclusivity deal extended in exchange for its iPad plan. In terms of price, no other wireless carrier comes close on unlimited 3G data. AT&T was willing to go "cheap", at least as the market goes rather than risk having to compete with another carrier entirely. To actually have to _compete_ for our business? How absurd!

    EB

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +1

    I hate to take the greedy stance

    since the iPhone has been making money for Apple all these past few years, but I wonder how much more money could Apple have made if it had been on both Verizon and AT&T. I'm sure Apple knows best how to run its business so it might have been too much for Apple to handle with two or three times as many iPhones in production. At least the whole iPhone ecosystem has had the time to mature and Apple has been able to learn and keep things tight. Second-guessing the AT&T and Apple union doesn't mean much at this point in time since both seem to be doing fairly well. If AT&T were struggling that badly they would have released Apple some time back. 2011 will see another iDevice numbers explosion when Apple branches out to another U.S. carrier. Android will be severely tested as far as loyalty goes.

  1. Salty

    Professional Poster

    Joined: Jul 2005

    0

    Company Rivalries

    Company rivalries are fun to watch. Whoever at Verizon has kept Apple from joining their handset lineup should be shot. Every carrier who has gotten it has benefited. They're trying to keep from being a dumb pipe, but they just ending up being the unwanted pipe.

  1. TheSnarkmeister

    Fresh-Faced Recruit

    Joined: Jun 2007

    +2

    Face Holes

    Apple is only shooting themselves in the foot by doing this. There are likely many similar to myself who have been burned in the past by AT&T and who have chosen to do without an iPhone specifically because of its tether to AT&T. Apple gains little by continuing this arrangement and it has only the world to gain by scrapping it. When the iPhone is untethered from AT&T, or at least unburdened by a contract, I'll be knocking down the door to buy one. I'll even pay full cash fare for it, but I will never again sign a contract with AT&T.

  1. aristotles

    Grizzled Veteran

    Joined: Jul 2004

    -1

    Exclusivity deals not required in US

    The largest barrier for other carrier support is not an supposed "exclusivity" deal but rather a technological one. Other countries such as Canada, Japan, UK, Germany, Italy, Switzerland, France to name a few are able to have multiple carriers in the same frequency bands meaning that unlocked phones will work on any carrier in that country as long it supports the frequencies used by them. The quad-band iPhone works in the US on AT&T, Canada on Roger, Fido, Bell or Telus and NTT Docomo or Softbank in Japan. NTT Docomo is the official roaming partner for people visiting Japan while Softbank in the official carrier of the iPhone.

    Verizon and Sprint "world" phones do not work in Japan from what Americans told me when I was there.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Re: Company Rivalries

    Company rivalries are fun to watch. Whoever at Verizon has kept Apple from joining their handset lineup should be shot.

    Um, that would be Steve Jobs. But he isn't at Verizon.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Exclusivity deals


    The largest barrier for other carrier support is not an supposed "exclusivity" deal but rather a technological one.


    Except the technological barrier is built by Apple. They could easily make a phone that works on Verizon's network (h***, Motorola even figured that out). They could also easily build phones that would work on Verizon's, Sprints, T-Mobile's, ATT's, as well as in Europe and Asia.

    It is just that Apple chooses not to do this.

    Other countries...are able to have multiple carriers in the same frequency bands meaning that unlocked phones will work on any carrier in that country as long it supports the frequencies used by them

    That's great. Except, if you recall, Apple started out with exclusivity deals in most of those countries anyway. In a few they've had to offer unlocked phones, but that's because the law states it as such, not that Apple wanted to do this. As it stands right now, you still cannot buy an unlocked iPhone in the US.

    BTW, the iPhone also works on T-Mobile, and there are many people who've unlocked their phones to work on that network. However, Apple still doesn't allow it as an option. Again, not because of some 'technical' block, but because they choose to. It is their option to do this.

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