Discovered docs show US iPhone may have 5yr deal

A pair of legal documents found today have confirmed that AT&T's exclusive deal for the iPhone was originally set to last until 2012. As part of an amended motion to dismiss a 2007 lawsuit and a court response denying a dismissal, Apple admitted that a USA Today article leaking the details of the 5-year contract was accurate. Although never officially made public, the term "was not 'secret,'" the company said in the October 2008 court denial.

The statement unearthed by Engadget was an unusual revelation for Apple but had been necessary as the iPhone maker, along with AT&T, had been accused of creating an unfair monopoly by requiring a two-year contract but not telling customers that the exclusive would last three more years, forcing them to renew contracts at least twice if they wanted to keep using the same device.

If the contract held, it would dash rumors of a Verizon iPhone due for the fall or early winter as it would prohibit Apple from making such a move for another two years. However, the exact conditions under which Apple could exit the contract aren't known and may have included clauses allowing an early change depending on service level agreements or changes in the product. AT&T has faced a rash of lawsuits over 3G performance and may have negotiated an extension before Apple could get lower iPad data pricing.

Murmurs of a Verizon or at least CDMA iPhone have intensified in recent weeks and have fueled rumors that Apple had at least found an escape clause or ended the contract early.

The iPhone exclusive is increasingly credited with saving AT&T from a rapid decline, as many of its quarterly reports have shown the iPhone propping up subscriber additions that might have been reduced or resulted in net customer losses. Verizon has managed increases of its own in recent months and, with the advent of Android phones like the Droid and Droid Incredible, may have already have developed a lure for iPhone customers frustrated at the extreme strain placed on AT&T's 3G network by its insistence on exclusivity.

By Electronista Staff