AT&T iPhone Exclusivity to Expire in June 2010?
Fortune reports on comments last Friday from Broadpoint AmTech analyst Brian Marshall that have been receiving a fair amount of attention today. The primary item of interest has been Marshall's claim that AT&T's exclusive agreement to distribute the iPhone in the U.S. will expire in June 2010, opening the door for other carriers to begin offering the device. Marshall's comments specifically point to Verizon as a carrier with which Apple would likely look to partner, with rumors of revised iPhone hardware capable of running on Verizon's network suggesting that a late 2010 launch could be possible.
AT&T's exclusivity window has been the subject of much discussion since the iPhone's introduction in mid-2007, with initial reports of the window extending until 2012. Other reports have claimed that the original exclusivity agreement had extended only 2009 but had subsequently been extended until 2010 as part of negotiations surrounding handset subsidies from AT&T. More recently, AT&T has been said to be seeking a further extension of exclusivity into 2011.
One of the questions raised in the move from exclusive to non-exclusive distribution models has been the effect on subsidies paid to Apple by wireless carriers such as AT&T. Marshall pegs the current subsidy paid by AT&T at approximately $450, and includes a shift to a "conservative" subsidy of $300 once other U.S. carriers come onboard. The drop in subsidy, however, would be much more than offset by increased sales volume under a multiple-carrier arrangement, according to Marshall. For its part, Apple has stated several times over the past six weeks that it has in fact been able to maintain subsidy levels in formerly-exclusive markets that have recently expanded to include multiple carriers.
The full video of Marshall's interview on Bloomberg Television is available online.
AT&T's exclusivity window has been the subject of much discussion since the iPhone's introduction in mid-2007, with initial reports of the window extending until 2012. Other reports have claimed that the original exclusivity agreement had extended only 2009 but had subsequently been extended until 2010 as part of negotiations surrounding handset subsidies from AT&T. More recently, AT&T has been said to be seeking a further extension of exclusivity into 2011.
One of the questions raised in the move from exclusive to non-exclusive distribution models has been the effect on subsidies paid to Apple by wireless carriers such as AT&T. Marshall pegs the current subsidy paid by AT&T at approximately $450, and includes a shift to a "conservative" subsidy of $300 once other U.S. carriers come onboard. The drop in subsidy, however, would be much more than offset by increased sales volume under a multiple-carrier arrangement, according to Marshall. For its part, Apple has stated several times over the past six weeks that it has in fact been able to maintain subsidy levels in formerly-exclusive markets that have recently expanded to include multiple carriers.
The full video of Marshall's interview on Bloomberg Television is available online.
Top Rated Comments
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29 months ago
Just in time, as my iPhone is getting kinda beat...cracked housing, 2nd battery...very much looking forward to a VZW iPhone!
29 months ago
The battles lately between AT&T and Verizon, both in ads and in the courtroom, make it interesting to consider how well Apple would be able to work with both companies at once, and how each company would promote the iPhone.
I know there are many iPhone users who would switch carriers, as well as many who wouldn't, but the biggest gain for Apple would be the customers who were loyal to Verizon and never bought iPhones in the first place.
I know there are many iPhone users who would switch carriers, as well as many who wouldn't, but the biggest gain for Apple would be the customers who were loyal to Verizon and never bought iPhones in the first place.
29 months ago
Apple can barely meet the demands of AT&T when they launch a new iphone refresh, what do you think is going to happen if supply is split between the two largest wireless companies AT&T and Verizon?? Also Verizon and Apple won't mix well if Verizon doesn't change their ways because they're too controlling of everything they do and allow whereas AT&T sort of lets Apple be in charge of their iphone. So I seriously doubt any of this happens and more than likely AT&T and Apple will just extend their exclusivity contract.
29 months ago
... the biggest gain for Apple would be the customers who were loyal to Verizon and never bought iPhones in the first place.
I think so too. The question is, how many Verizon users will have locked into two year contracts on Droid or Pre models by the time the iPhone comes along? (Assuming it does come along.)
The first iPhone model was announced six months ahead of time, partly in order to give customers a reason to wait for it to go on sale.
Also Verizon and Apple won't mix well if Verizon doesn't change their ways because they're too controlling of everything they do and allow whereas AT&T sort of lets Apple be in charge of their iphone.
ATT had a say in some major apps.
ATT didn't allow Slingplayer over 3G. And they didn't allow VoIP until very recently.
Verizon allows both, at least on other phones. No idea what they'd do for the iPhone.
29 months ago
It's done great for the iPhone in the UK and I'm sure that success will follow in the US.
For those on here who want the iPhone but not on AT&T, I hope your wishes are granted!
For those on here who want the iPhone but not on AT&T, I hope your wishes are granted!
29 months ago
Curious to see how ATT is going to handle iPhone unlocking once they are no longer exclusive and our contracts expire.
29 months ago
Apple can barely meet the demands of AT&T when they launch a new iphone refresh, what do you think is going to happen if supply is split between the two largest wireless companies AT&T and Verizon??
well i think apple just underestimated. Theres nothing saying they couldnt physically make and deliever more phones for a launch. I doubt apple was physically constrained and couldnt make any more phones even if they wanted too.
If apple does jump from att (i still doubt it for 2010) i think att might put some interesting offer like 5 bucks off data plan or free 200 text messages or something. Att cant loose all those iphone people without a fight.
one possibility though is apple will sign one more year with att with the thing that att needs to have tethring or something like that. The update to the iphone in 2010 would be modest and then in 2011...they will bring it to verizon with a different physical form model since more people have 3GS and their contracts would be up in 2011.
29 months ago
And don't you think it would look pretty stupid on Verizon's part to start selling and advertising the iPhone this next year after they just got done bashing it routinely in their DROID campaigns?
29 months ago
And don't you think it would look pretty stupid on Verizon's part to start selling and advertising the iPhone this next year after they just got done bashing it routinely in their DROID campaigns?
You mean like Steve Jobs did with Intel processors and so forth?
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