AT&T’s CEO Randall Stephenson is in discussions with Apple (NSDQ: AAPL) to extend its hold on the iPhone until 2011, reports the WSJ, which quotes people familiar with the matter. Without an extension, AT&T’s contract is reportedly set to expire next year.
If the extension is granted, AT&T’s grip on the iPhone would span a total of four years — the equivalent of an eternity in the wireless world. At that duration, it is easy to argue that it’s bad for the consumer, Apple, and maybe even AT&T. For consumers, it limits their choice of carriers. Already, people go to great lengths to unlock the devices. For Apple, it could spell trouble because an easy way to sell more devices is by selling to consumers who are reluctant to switch to AT&T (NYSE: T).
But perhaps an even better question is: what more could AT&T offer Apple to fairly compensate it for that potential loss in revenues from other carriers? If you remember, the exclusivity was justified in the beginning because AT&T was taking a risk on Apple’s first mobile phone (even though that seems hard to believe now). At the time, AT&T was rumored to have the exclusive for a jaw-dropping five years. But when the iPhone 3G launched, supposedly the term was shortened, and as part of it AT&T agreed to start subsidizing the iPhone in return being able to keep 100 percent of the data revenues. As the WSJ points out, this has cost AT&T dearly — or about $1.3 billion or more to discount the phone. How much more would it cost to sweeten the pot even more? Not to mention, what if AT&T puts forward the money and effort only to be disappointed? In a year from now, who knows what device will be the talk of the industry?
I love the iPhone. I will never go with AT&T to get it!
In the meantime, iPhone is the only phone getting smarter overtime.
I'll wait for 3.0 to make the decision
AT&T cannot lose the exclusivity on the iPhone to Verizon, especially since AT&T is not an international operator and limited to the U.S. market. With appropriate incentives such as continued subsidized promotions by AT&T, Apple will concede to extending exclusivity on the iPhone only. AT&T will continue its pitch about "home-phone services" and the telemarketing calls with the salutation of "AT&T Phone Company". However, Apple will reserve its micro-notebook or netbook Mac for Verizon's launch of the 4G LTE network. Will the winner be phones or devices? Apple will be left standing tall – will AT&T or Verizon be the preferred U.S. operator next to them.
AT&T is by far the worse company on the planet. Worse customer service, many ways to rip you off, even after you terminate the contract. So no iPhone for me yet!
Obviously, the consumers don't want to see the exclusivity deal extended, and apple knows that they will sell many more units once they can offer the iphone for other carriers. The only reason that AT&T wants this extension is because they know that it's bad news for the other carriers. It won't be such an advantage to them, however, because pretty much everybody who is going to switch to AT&T has already done so.
AT&T knows that if Verizon gets the Iphone…..they are toast!
quote -
"Already, people already go to great lengths to unlock the devices"
-end quote
Proofread much?
I switch from Verizon after 22 years, to AT&T, just for the IPhone. If Apple goes with Verizon I will switch back in a second.
I've been with AT&T for a long time and my iPhone works great with it. I have no reason to switch.