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Apple seen extending exclusive iPhone deal with AT&T

post #1 of 76
Thread Starter 
Two new analysts said Tuesday that the iPad-AT&T deal suggests Apple may extend its exclusive iPhone agreement through 2011, leaving the wireless provider as the sole carrier of the handset in the U.S. this year.

While speculation was rife for months (1, 2, 3, 4, 5) that Apple would partner with Verizon for a new CDMA-compatible iPhone this summer, sentiment has changed in recent weeks, after Apple publicly stood by AT&T and also announced an agreement with the carrier for the iPad's domestic 3G data plan. Lending its support for that line of thinking Tuesday was Barclays Capital, which issued a new note to investors with the conclusion that Apple and AT&T will likely remain exclusive for the remainder of 2010.

Analyst Vijay Jayant said the iPad announcement, with no-contract 3G data plans available exclusively through AT&T, showed that Apple remains content in its ongoing partnership with the nation's second-largest wireless carrier.

"(The) launch of Apple's iPad on AT&T's network is a vote of confidence in AT&T's network by the equipment maker," Jayant wrote. "While iPad sales are unlikely to materially impact wireless revenues in the short term, selecting AT&T to launch its second major communications product reflects Apple's bias for the global GSM platform and the prospects of AT&T's network capability. Moreover, it could suggest the iPhone exclusivity may continue, at least through the end of 2010."

In addition, Steve Clement with Pacific Crest said he believes the odds of exclusivity being extended have improved, in light of the recent announcements. He noted that the tone from Apple regarding AT&T has become noticeably more positive in recent months.

Clement has long believed that AT&T would not be able to retain exclusivity until 2011, but a number of recent developments, he said, may suggest otherwise. He noted that AT&T's plan to increase capital expenditures in 2010 could be a sign that the carrier intends to increase its bandwidth capacity to accommodate keeping the iPhone solely on its network. In addition, he said the carrier's wireless-margin guidance for 2010 does not seem to factor in the margin benefit the company would gain by losing exclusivity in the second half of the year.

Both analysts join Credit Suisse, which last week predicted there is a 75 percent chance AT&T will remain the exclusive carrier of the iPhone in the U.S. in 2010. Their assessment said the iPhone will inevitably be available on multiple carriers in the U.S., but a probability analysis suggests it is not likely to occur in this calendar year.



The role that the iPhone plays in AT&T's business is huge: Barclays Capital estimates that Apple's handset is 47 percent of the AT&T smart device base. Because smartphone users mean more average revenue for carriers, the iPhone has become a significant part of AT&T's success.

Credit Suisse and Barclays Capital have both concluded that retaining exclusivity over the iPhone would be a major coup, both in the short and long term, for AT&T. The added time would give the provider a chance to improve its network capacity and alleviate bandwidth issues that have plagued the carrier for some time. But both also believe that AT&T will lose exclusive rights to the iPhone by 2011 at the latest.
post #2 of 76
Well duh!

The only people who didn't see this coming are the Verizon fanbois...
post #3 of 76
Those analysts should have just asked me. I've said all along that Apple won't be on Verizon until they have very good 4G coverage. CDMA is near end-of-life.

You guys got that? Good, so shut up with your idiotic speculation and start using your brain.
post #4 of 76
well i won't play armchair CEO here...if they extend the exclusive with AT&T, limiting their growth by staying with only one carrier and ignoring the other 150 million potential customers with the other big 3 then they must have a good reason to do it. AT&T is probably paying a super "bribe" for Apple to determine that they'd rather keep their marketshare limited...

It must be good business for Apple, but bad for consumers...if AT&T is desperate and willing to shell out even more to Apple just to keep it exclusive it means higher rates for iPhone users as there won't be any competition.
post #5 of 76
It's all good. Apple, please unlock the iPhone in the US. There is no competition to AT&T in the US (especially for 3G) as long as the current iPhone GSM frequency ranges are replicated in each new iPhone release. Additionally, we are already locked into our 2-year AT&T contracts. So, what's the harm in providing the official carrier unlock with the new OS release? It's not like we can use any other provider in the US. Well, ok, we could use T-Mobile, but we would have to continue to pay AT&T for the remainder of our contracts. Additionally, why would I want to change from a not-so-good coverage to the completely horrible coverage while paying to both companies? Moreover, I would not be able to get 3G from T-Mobile. I just don't see many people leaving AT&T to take their iPhones to T-Mobile even after their AT&T contracts expire.

However, when traveling overseas, having an unlocked iPhone would come in handy. Additionally, by providing an official carrier unlock, Apple would dramatically reduce the number of people willing to jailbreak their phones because most people jailbreak their iPhone in order to unlock it.
post #6 of 76
Well that'd be a real shame, choice is good after all.

It's just a shame that all the networks require specific frequencies/chips etc.
post #7 of 76
Blah blah AnalystZZZZZZzzzzzz......

Riddle: What is functional, controlling and optional, but not commanding?


Answer: PageUp on a Macbook keyboard.

How is this intuitive ?

Many of the most important software concepts were invented in the 70s and forgotten in the 80s.

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post #8 of 76
Quote:
Originally Posted by DocNo42 View Post

Well duh!

The only people who didn't see this coming are the Verizon fanbois...

Ok... Now this is bizarre. Can someone really explain to me why it would be SO BAD for Apple to also go with VZW and other carriers?

It's better for the consumer AND it's better for Apple (long-term).

Why is this such a hard concept for you pro-AT&T people to grasp? Also, this concept of "pro-AT&T" is truly making my head hurt. Why anyone would "support" AT&T is truly beyond my understanding.

w00master
post #9 of 76
Nooooooooo!!!! Why oh why Apple? Please bail on the sleezy, lying monopolistic AT$T. Since the day I stood in line for the very first iPhone, until now, I have had nothing but trouble and network issues with my iPhone and lies from AT$T whenever I tried to get them resolved. How about "it's not our networks fault..it's your fault, it's Apple's fault, it's the iPhone's fault. it's your tree's, it's your refrigerator, or it's your microwave." 3 bars to none in those years and even Apple replacing a phone to prove it wasn't them. Nooooooooooooo!!!!!!!
post #10 of 76
Seems like the most common situation after the iPad announcement but I'd love another carrier to come on board to get AT&T to fight more for users, get the stock price jumping, and get posters to STFU about AT&T. T-Mobile seems the obvious next fit but the unlocked iPad doesn't have the 1700Mhz band.


Next week: an article stating that AT&T will not retain exclusivity.


Quote:
Originally Posted by B747 View Post

Well that'd be a real shame, choice is good after all.

It's just a shame that all the networks require specific frequencies/chips etc.

In a decade all the US carriers will be using LTE, even Sprint after they're bought out . By then there will likely be rules governing exclusivity and carrier locking. I can dream, can't I?
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post #11 of 76
Quote:
Originally Posted by DocNo42 View Post

Well duh!

The only people who didn't see this coming are the Verizon fanbois...

Yep. Doesn't matter to Apple if the customer is having a good experience as long they're getting paid.
post #12 of 76
when my two years are up in October I'll have to get an HTC or Palm or something if the iPhone's not on Verizon. What good would an AT&T iPhone be without reception.
post #13 of 76
Quote:
Originally Posted by solipsism View Post

In a decade all the US carriers will be using LTE, even Sprint after they're bought out . By then there will likely be rules governing exclusivity and carrier locking. I can dream, can't I?

I think the ongoing exclusivity is more a function of the iphone technology than favouritism. Were it not for VZ's CDMA technology they'd have the iPhone by now. There are too many new accounts at stake. Apple is talking ATT up because VZ is not an option.
post #14 of 76
Well, one of two things are going to happen this year for me.

1. If Apple sticks with AT&T, then I won't be getting a new iPhone this year because I'm not going to renew my contract, but go month to month.

2. I'm going to try out the Nexus on Verizon. If I like it enough then I'll drop AT&T. If not then I'll pay AT&T by the month until the iPhone moves to Verizon.

Either way, my next iPhone won't be until Apple supports Verizon. It has reached the point where it doesn't matter what flashy new features Apple adds to the iPhone, I don't want to deal with AT&T's shit anymore.
post #15 of 76
The entire world uses GSM (except some US and Japanese carriers) ... why bother with a CDMA phone??
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post #16 of 76
Shoot... I live in the Dropped-Call capital of the USA, New York City. My iPhone contract is up in August and I was planning on getting another iPhone, as long as I could use the iPhone where live. Now I'll have to rethink the iPhone. I have zero faith in AT&T. I have had so much frustation...
post #17 of 76
Quote:
Originally Posted by KingOfSomewhereHot View Post

The entire world uses GSM (except some US and Japanese carriers) ... why bother with a CDMA phone??


Because with Verizon you can actually get signal 99.99999% of the time.
post #18 of 76
First, we'll have to see if this is true. If so, I can live with it. AT&T has been very good to Apple and I can't stand the arrogance of Verizon.

Regarding T-Mobile, the Germans are currently investigating how to best get rid of it. When they came here a decade ago, their CEO boldly stated that they would be the largest wireless provider in the USA. Not.

Again, AT&T would be fine.
post #19 of 76
Quote:
Analyst Vijay Jayant said the iPad announcement, with no-contract 3G data plans available exclusively through AT&T, showed that Apple remains content in its ongoing partnership with the nation's second-largest wireless carrier.

The iPad is an unlocked device. AT&T is just an option. Jobs himself said that it works with any micro-sim. And the reason no Verizon? CDMA. Why retool and make new hardware when the current GSM works globally.
post #20 of 76
Apple is getting into the wireless biz.

Provided AT&T can clean up their act a little and keep up with demand, they stand to gain big. By the looks of the current numbers, they've improved.
post #21 of 76
Quote:
Originally Posted by paxman View Post

I think the ongoing exclusivity is more a function of the iphone technology than favouritism. Were it not for VZ's CDMA technology they'd have the iPhone by now. There are too many new accounts at stake. Apple is talking ATT up because VZ is not an option.

But T-Mobile is. With 35M subs and only needing to add a single little radio for 1700MHz spectrum. These chips are cheap and small, and are within the number of radios allowed for the next gen baseband processors.
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post #22 of 76
Quote:
Originally Posted by w00master View Post

Ok... Now this is bizarre. Can someone really explain to me why it would be SO BAD for Apple to also go with VZW and other carriers?

It's better for the consumer AND it's better for Apple (long-term).

Why is this such a hard concept for you pro-AT&T people to grasp? Also, this concept of "pro-AT&T" is truly making my head hurt. Why anyone would "support" AT&T is truly beyond my understanding.

First off: I'm not pro-AT&T. In fact, I don't have an iPhone yet because of AT&T.

But I completely understand Apple's position on this. A Verizon iPhone would be bad for Apple.

Currently Apple builds one iPhone. It works around the world with multiple carriers. This matches Apple's ease of use model. If they were to build a Verizon version of the iPhone, it would be for one segment of one market. When a Verizon iPhone user went on holiday overseas and their iPhone wouldn't work, Apple would catch the the flack. "My friend's iPhone worked in Europe. Why won't mine!!!" People don't want a technical explanation, they just want it to work.

While most countries regulated (yeah there's that nasty word) their carriers, requiring them to standardize on one system, the USA took a hands off approach. This let carriers develop separate standards. This allowed them to further lock in customers.

The simple fact is, until the other US carriers move to world standard protocols (as will happen with 4G), there is little to no chance Apple will support them. Apple is all about standards and one-size fits all. The American cell industry is not.
post #23 of 76
Give folks an option!

We know or can guess, that AT&T is funding the damn iPad, and because of it, we all get stuck with only one carrier for a bit longer.

Steve's real dream or "Biggest thing I've ever created" was the flucking of folks who want their Verizon, T-Mobile, Sprint or whatever.

Hell, it would be in Apples best interest to give AT&T a few billion to up-grade the network. Hell what ever they give them could be in shares, and with a few billion they could own AT&T and fix whatever is wrong themselves.

Even Apple can only stand so much negative press before they have to fell it.

- The iPad isn't even out, and folks have some issues with it.
- AT&T is NOT in Apples best interest (at least from what we see and know)

If AT&T is padding Apple, then they have got their nose, tongue so far up Steve's rss that they
can clean his colon.

He may go down in history for not creating the greatest product, but for getting the most out of a company, in the process of hurting his company.

There is NO way, Steve isn't hearing these kinds of complaints, and concerns, so based on that, whatever deal he / Apple has with AT&T has got to be worth ever penny, dollar or whatever they are getting.

Knowing that based on what folks say, that the number of iPhone sales would increase 2 or 3 fold, tells me, they are getting a TON from AT&T. Why else would any one stay with one company that seems to be hurting them more then helping them?
post #24 of 76
Quote:
Originally Posted by Wings View Post

Those analysts should have just asked me. I've said all along that Apple won't be on Verizon until they have very good 4G coverage. CDMA is near end-of-life.

You guys got that? Good, so shut up with your idiotic speculation and start using your brain.

Bravo!
post #25 of 76
Quote:
Originally Posted by johnwhite1000 View Post

Because with Verizon you can actually get signal 99.99999% of the time.

Not in my experience. I was with Verizon for the last 10+ years and I dropped as many calls with them on average as I do with AT&T. As a matter of fact, my neighbor (on Verizon) still gets crap signal at his house while I get full 3G from AT&T right next door.
post #26 of 76
People might say that CDMA is too limited a market or will be soon be replaced so Apple shouldn't bother. However, other companies such as Motorola seem to think it is worthwhile and are busy releasing competing smartphones. Analysts have predicted that if Apple releases a CDMA phone it could mean an extra 10 million iPhone sales over the next two years.

And it is not just the short term. Once somebody buys an Android phone and start investing in apps for it, then it becomes much less likely these people will ever switch to the iPhone.
post #27 of 76
Quote:
Originally Posted by bdkennedy1 View Post

2. I'm going to try out the Nexus on Verizon. If I like it enough then I'll drop AT&T. If not then I'll pay AT&T by the month until the iPhone moves to Verizon.

Recently FCC certified Nexus One phone with 3G frequences supported by AT&T. And AT&T is planning to introduce 5 Android phones.
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post #28 of 76
Guess I am in for another year's wait.
post #29 of 76
Quote:
Originally Posted by KingOfSomewhereHot View Post

The entire world uses GSM (except some US and Japanese carriers) ... why bother with a CDMA phone??

You are not right. Yes, GSM is still most popular standard, but there are a lof of CDMA2000 networks in the world - http://en.wikipedia.org/wiki/List_of_CDMA2000_networks
The main issue is the different frequencies they use (450, 800, 850, 1800, 1900 MHz)
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post #30 of 76
Now I know what all that wailing and gnashing of teeth I heard earlier today was - the Verizon zealots crying over not getting the iPhone on their beloved network in a few months as they hoped/wished/expected.

Sarcasm aside, that's too bad...more networks equals more choice equals good for consumers.
post #31 of 76
Quote:
Originally Posted by kirkgray View Post

The simple fact is, until the other US carriers move to world standard protocols (as will happen with 4G), there is little to no chance Apple will support them. Apple is all about standards and one-size fits all. The American cell industry is not.

I hope so. But there is a possibility that different carriers will use different frequencies for their 4G networks and it will be impossible to switch to another carrier.
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post #32 of 76
i was just at a coffee shop this morning in hayes valley (sf). i was talking to the owner outside and there were no clouds in the sky. he was attempting to make a call on his iphone. i asked him how he liked it. he said the dropped calls were far too frequent. then, he proceeded to show me how many 'bars' he had at that moment. it was more like a 'flat line' than a bar.

it seems illegal that at&t should be charging any fee for that. now here's where a class action would actually be a worthwhile thing.

i, personally, will not get an iphone, mainly because i hate at&t—and this was long before the iphone came along. they're too big, and don't care about the customer.

quite frankly, i think they're too concerned about short-term profits and paying out dividends to their investors to care about their infrastructure—kinda like our government.
post #33 of 76
Quote:
Originally Posted by Rob55 View Post

Not in my experience. I was with Verizon for the last 10+ years and I dropped as many calls with them on average as I do with AT&T. As a matter of fact, my neighbor (on Verizon) still gets crap signal at his house while I get full 3G from AT&T right next door.

Good point, and bad point.

Good because on a national level, they all suck. They all have dead zones, dropped calls, etc, etc. My experience over the last decade is just that with all the players (AT&T, Cingular, Verizon, Nextel, Sprint, T-Mobile) - I've had them all, they all have issues.

Bad because for most people who never leave their own little neck of the world, the rest of the world doesn't matter. Doesn't matter what you get on your street, it matters what they get on their street.

The best cell provider is the one that has a signal in the places you frequent, at the price you like, with the phone you want.

All the rest of this T-Mobile vs Verizon vs AT&T vs GSM vs CDMA is just a bunch of fanboi noise and chest thumping.
post #34 of 76
Who cares....they all suck. Some places Verizon is the best, some places they are garbage. Same applies to all cell companies.
post #35 of 76
Don't any of you fools get it?

Apple and ATT&T have their respective very good reasons for continuing their exclusivity agreements. They get to conduct their business in the way they see fit. They obviously aren't oblivious to all this whining. So they must consider weathering the criticism worth it or bearable in relation to the benefits.

Going on what I've observed myself with my iPhone service, I just replaced my 1st-gen phone with a 3GS, and the performance and service is much better than with my first iPhone. But there were also no problems with the first one, either. Over three years, very infrequent dropped calls and occasional weak signals, but overall quite acceptable.

None of us know the real reasons for the continuance of exclusivity. But I would guess that it has to do with mutual technological dependence.

The evidence seems to be that there are lots of happy iPhone customers, and both Apple and AT&T are making good profits. Nothing wrong with any of that.

To those for whom AT&T hasn't yet established good or any service, I don't see why AT&T wouldn't be working on expanding its infrastructure. So you just have to be patient. It's billions of dollars worth and that takes time.

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post #36 of 76
Quote:
Originally Posted by johnwhite1000 View Post

Because with Verizon you can actually get signal 99.99999% of the time.

I get that with AT&T ... I didn't with Sprint. (never used VZ)
I've never had a problem getting a signal with ATT ... all over the US ... not to mention that I get a GSM signal all over the WORLD! (while that's useful to me, I'll concede that it would be a useless feature to most Americans.)
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post #37 of 76
Quote:
Originally Posted by w00master View Post

Ok... Now this is bizarre. Can someone really explain to me why it would be SO BAD for Apple to also go with VZW and other carriers?

I don't know that it's bad, but the ball was firmly in Verizon's court and they rejected the iPhone first. Sucks to be them now. I'm sure there were further discussions even after that point, and a deal obviously still couldn't be worked out. Verizon, apparently, believes their own press releases about how superior their network is and how that's all that matters

Finally, for all the posturing about how it's no big deal to have another SKU with CDMA chips - yes it is! All you have to do is compare Apple's profitability to other makers and it's pretty obvious they know what they are doing. Why do you think Southwest Airlines is far more profitable than United? They have a very simplified fleet that reaps savings in training, maintenance, parts and on down the line. It's a huge ripple effect and common sense to anyone who has had to manage any kind of product or system in the real world. Simplicity pays off huge in multiple, complex, interrelated ways that aren't obvious until you start diving into the details.

If true, it's a done deal. No verizon iPhone until 4G is prevelant - two years or more at least. How long was 3G out before chips that had the power profiles Apple was comfortable with to finally launch the iPhone 3G?

I can't say I'm surprised because I'm not - it was rather obvious when it became apparent Verizon passed on the iPhone the first time that a CDMA iPhone was highly unlikely.
post #38 of 76
Quote:
Originally Posted by LouisTheXIV View Post

well i won't play armchair CEO here...if they extend the exclusive with AT&T, limiting their growth by staying with only one carrier and ignoring the other 150 million potential customers with the other big 3 then they must have a good reason to do it. AT&T is probably paying a super "bribe" for Apple to determine that they'd rather keep their marketshare limited...

It must be good business for Apple, but bad for consumers...if AT&T is desperate and willing to shell out even more to Apple just to keep it exclusive it means higher rates for iPhone users as there won't be any competition.

Get real. There are no 150 million other users in the US.

This 2011 is a clear shot at both AT&T and Verizon to get their 4G services ready and then the options will still only be open to both, IF APPLE CONTROLS ITS PRODUCTS on their network.

Verizon either changes it's entire business philosophy or continues to see losses.
post #39 of 76
Quote:
Originally Posted by BenRoethig View Post

Yep. Doesn't matter to Apple if the customer is having a good experience as long they're getting paid.

While that's one aspect (and I submit there are far more like me that have a perfectly fine experience with AT&T than those that don't - you don't sell tens of millions of something if the experience is complete crap) it's obvious Verizon didn't want to play ball. Whatever the sticking points were, we may never known but given Verizon's past history again I am puzzled why anyone is honestly surprised at this.

Given their past stubbornness, AT&T will have to shoot to 75% of the smartphone market (not unpossible) before Verizon will come to their senses.
post #40 of 76
Quote:
Originally Posted by johnwhite1000 View Post

Because with Verizon you can actually get signal 99.99999% of the time.

That's a load of crap. No one carrier has 100% (or even 90%) coverage. It's impossible. It may stink where you are - if so, sucks to be you - but enough of the V hyperbole, please. It may work for TV commercials but not here in the real world.
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