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AT&T warns exclusivity for 'a number of attractive handsets' will end

post #1 of 76
Thread Starter 
In its latest filing with the U.S. Securities and Exchange Commission, AT&T has made mention of its exclusivity agreements for smartphones, and attempted to argue that the company would remain strong after those expire, though Apple's iPhone was not specifically named.

Filed late last Friday, the 10Q from AT&T was interpreted by Steven Fox, analyst with CLSA, to mean that the wireless carrier is attempting to prepare investors for the end of exclusivity of the iPhone. He noted the addition of "significant new language about exclusivity," which he said suggests Apple could add Verizon as a carrier in the U.S. by early 2011.

"Offering a number of attractive handsets on an exclusive basis distinguishes us from our competitors," AT&T's filing reads. "As these exclusivity arrangements end, we expect to continue to offer such handsets (based on historical industry practice), and we believe our service plan offerings will help to retain our customers by providing incentives not to move to a new carrier."

AT&T's statements are an effort to ensure investors that the expiration of exclusivity agreements will not spell doom for the company. Of course, the biggest exclusive of all for AT&T is the iPhone, which has only been available on one carrier in the U.S. since the device first launched in 2007.

"Although exclusivity arrangements are important to us, such arrangements may not provide a competitive advantage over time, as the industry continues to introduce new devices and services," the filing reads. "Also, while the expiration of any of our current exclusivity arrangements could increase churn and reduce postpaid customer additions, we do not expect any such terminations to have a material negative impact on our Wireless segment income, consolidated operating margin or our cash from operations."

While the new statements are intriguing, Fox's conclusion is speculation at most, as neither Apple nor AT&T have revealed the terms of their current agreement publicly.

But it wouldn't be the first time AT&T has spoken of a post-exclusivity world, as earlier this year, one of the company's executives said he wasn't concerned about the iPhone becoming available on other carriers. Ralph de la Vega, president and CEO of AT&T's Mobility and Consumer Markets division, downplayed the effect the loss of exclusivity would have on business.

De la Vega said that his company's family talk and business discount plans are "sticky" and keep customers with the carrier, regardless of options from other providers. He believes AT&T will retain iPhone users even if Apple's immensely popular handset becomes available elsewhere.

Rumors of a CDMA iPhone compatible with the Verizon network in the U.S. have persisted for years, but the latest reports have suggested such a device could debut in January 2011. Those reports indicated that manufacturing of the hardware is set to begin late this year.

Apple and AT&T originally agreed to a 5 year deal through 2012 for exclusive access to the iPhone. However, contracts can be amended, canceled or breached due to a variety of factors.

The relationship between Apple and AT&T has been a controversial one, as some customers have been vocal in their displeasure with AT&T's service. One recent behind-the-scenes report suggested that Apple nearly ended its partnership with AT&T multiple times over a myriad of issues, as Apple was unwilling to restrict the Internet capabilities of its phone, and AT&T struggled to meet the overwhelming pressure the smartphone placed on his network.
post #2 of 76
Now we can believe the Verizon rumors.
post #3 of 76
Just pull it out of the hat already
post #4 of 76
The most 'attractive handset' being (of course)... wait for it... Apple's iPhone.
"Why iPhone"... Hmmm?
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"Why iPhone"... Hmmm?
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post #5 of 76
I know what that means...

NOTHING!

I will believe it when an Apple exec is holding a press conference with a new carrier exec.
post #6 of 76
A few months ago, I would have said Vzw will NOT get an iphone until LTE is going strong and there would never be a CDMA version.

However, with the higher ETF and new data packages on AT&T, makes me think maybe Apple is going to go ahead with the CDMA iphone.

What I would love to see: iphone, droid X, motorola droid II, incredible, evo release on ALL 4 US networks.

I for one, Love AT&T. I worked at Vzw and you couldn't pay me to use them again. 3G so slow it makes boost mobile look good and their extra 3 bucks for visual voicemail. No thanks.

I don't care if vzw gets the iPhone or not. I honestly hope sprint and t-mobile get it before vzw, just because. I will stay with my Really Fast 3.5G connection and my WONDERFUL roll-over, AT&T's awesome customer support and my grandfathered unlimited data.
post #7 of 76
if Verizon does get the iphone will it really be any better contract wise? Will Verizon try limiting the itunes ecosystem in favor of that nasty a** Vcast crap?
It remains to be seen huh.
post #8 of 76
Quote:
Originally Posted by Damn_Its_Hot View Post

Now we can believe the Verizon rumors.

From yesterday:

http://forums.appleinsider.com/showt...56#post1692456

post #9 of 76
Quote:
Originally Posted by Damn_Its_Hot View Post

Now we can believe the Verizon rumors.

I should have noted that it makes me no difference - since I will stick with AT&T. I have had a good experience with them. Good reception, no dropped calls, no complaints in general. It will be interesting to see how people react to Verizon once there is a choice - it is the savior now - I bet it'll be something totally different when people start using it and they are overloaded.
post #10 of 76
Quote:
Originally Posted by maccherry View Post

if Verizon does get the iphone will it really be any better contract wise? Will Verizon try limiting the itunes ecosystem in favor of that nasty a** Vcast crap?
It remains to be seen huh.

I'm a firm believer in the "grass is greener" philosophy. At&t and Verizon are the two biggest cellular carriers in the U.S. They didn't get there by screwing their customers and having crappy networks. For all the caterwauling about at&t's network it's not any better or worse than Verizon's, no matter what the at&t haters/Verizon fanboys pontificate. We just hear their loud screams the most, just like very other issue of the day that is blown way out of proportion by the anonymity of the internet. Antennagate comes to mind.

If and when the iPhone comes to Verizon, or any other carrier, there will be fans and haters. The iPhone will be blamed by some, Verizon by others. There will be no mass exodus from at&t as the whiners and screamers predict for all the reasons discussed by at&t executives.

What will be interesting to see is what effect the iPhone will have on Android sales. At&t already has a number of Android phones available. To my knowledge we have no hard information of how Android is doing within the at&t network vs the iPhone. Surveys seem to indicate that a good number of Android users would switch to the iPhone if it were available on their carrier. We already know that Android is not going all that gangbusters in other parts of the world where the iPhone is available on multiple carriers.
post #11 of 76
They will play it like this to the last possible moment to fulfill contract agreements. When iPhone is available on other networks, it will be officially announced the day before it goes into effect and not sooner.

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post #12 of 76
Palm took a dirt nap. Who's next? Any takers?
post #13 of 76
A coworker of mine recently got the latest and greatest HTC Android phone from Verizon. She was so proud of it too when she got it. Then Verizon advised her last week to upgrade to Android 2.2. Big mistake. In the process, the update wiped out all her apps and contact information, and she now claims that her phone runs slower. She is so P.O.'d now. I wonder if she will be one of those folks who decide to switch to an iPhone if it becomes available on Verizon.
post #14 of 76
OK, ***now*** I officially believe that Verizon is getting the iPhone.

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post #15 of 76
I wouldn't worry either. They got quite a head start. That pretty much means they got everyone in the middle (that didn't have loyalty to a certain carrier) and probably converted a few customers to their side from other carriers. The customers that they might lose are the ones that probably didn't have very good service in their area anyway. They probably will not need to pay Apple as much without exclusivity so it might be a slight positive to their profits initially.
post #16 of 76
Lets see how service is on Verizon when they get the Iphone. Of couse they'll gain hundreds of thousands of customers.....will it slow down their system????
post #17 of 76
Quote:
Originally Posted by Damn_Its_Hot View Post

I should have noted that it makes me no difference - since I will stick with AT&T

For those who own shares, the stock price impact could be huge.
post #18 of 76
Quote:
Originally Posted by DaHarder View Post

The most 'attractive handset' being (of course)... wait for it... Apple's iPhone.

They said "a number of attractive handsets"... so must be: iPhone, iPhone 3G, iPhone 3GS, and iPhone 4.
post #19 of 76
Quote:
Originally Posted by anantksundaram View Post

For those who own shares, the stock price impact could be huge.

Not really. AT&Ts dropped call problem is as overhyped as antennagate. There are a few areas that do have legitimate problems, but overall they aren't too bad. Besides... if the rumors are true, it is just a CDMA phone (inferior to AT&Ts much faster 3G network). Things will get more interesting when AT&T and Verizon battle over 4G.
post #20 of 76
I put off getting an iPhone 4 just to avoid renewing with AT&T since I'm month to month. I put off the 3GS too, which I'm about to get used to hold me over since my 3G is super slow now.

AT&T's service in my area is not awful, it's also not good. Voicemails arrive when the phone hasn't rung, dropped calls, the usual. But really, it's screwing me over on roaming when I was with them the last time that did it. Wouldn't have ever been with them again if it weren't for the iPhone, and that was a hard thing to make myself do. (At the time Android wasn't mature enough and I couldn't wait any more). As soon as iPhone is on Verizon or Sprint, I'm gone. Yes it's called holding a grudge, but companies should always treat their subscribers right if they want to expect loyalty.

As for the whole CDMA is an old technology argument, yes, maybe, but it's also used by the most reliable networks. T-Mobile was GSM and highly unreliable when I was on it (maybe better now), and AT&T is only moderately better. I would also bet that the CDMA iPhone has a 4G antennae. I'm sure the major carriers have some idea of what they're going to use and will tell Apple to build it in. The 3GS came with upgraded HSDPA or whatever before it was even widely available. So I don't expect that to be too big of an issue. I'll probably buy it either way. Good news day.
post #21 of 76
Hope the iPhone goes to other carriers soon. This should ease the network "congestion" that AT&T has been experiencing since 2007.
post #22 of 76
Quote:
Originally Posted by rtamesis View Post

A coworker of mine recently got the latest and greatest HTC Android phone from Verizon. She was so proud of it too when she got it. Then Verizon advised her last week to upgrade to Android 2.2. Big mistake. In the process, the update wiped out all her apps and contact information, and she now claims that her phone runs slower. She is so P.O.'d now. I wonder if she will be one of those folks who decide to switch to an iPhone if it becomes available on Verizon.

Stop spreading FUD. I have never - never heard that 2.2 slows down a phone.

http://gizmodo.com/5549260/android-22-review

"In everyday use, the new compiler combined with Android's efficient memory management means that pretty much everything you do, in both the general OS as well as apps, feels more responsive."
post #23 of 76
Quote:
Originally Posted by rtamesis View Post

A coworker of mine recently got the latest and greatest HTC Android phone from Verizon. She was so proud of it too when she got it. Then Verizon advised her last week to upgrade to Android 2.2. Big mistake. In the process, the update wiped out all her apps and contact information, and she now claims that her phone runs slower. She is so P.O.'d now. I wonder if she will be one of those folks who decide to switch to an iPhone if it becomes available on Verizon.

For gosh sakes, don't let your friend get a iPhone 3G and upgrade to iOS4 or she will have the same problem. Apple plays that game too.
post #24 of 76
Quote:
Originally Posted by elliots11 View Post

I put off getting an iPhone 4 just to avoid renewing with AT&T since I'm month to month. I put off the 3GS too, which I'm about to get used to hold me over since my 3G is super slow now.

AT&T's service in my area is not awful, it's also not good. Voicemails arrive when the phone hasn't rung, dropped calls, the usual. But really, it's screwing me over on roaming when I was with them the last time that did it. Wouldn't have ever been with them again if it weren't for the iPhone, and that was a hard thing to make myself do. (At the time Android wasn't mature enough and I couldn't wait any more). As soon as iPhone is on Verizon or Sprint, I'm gone. Yes it's called holding a grudge, but companies should always treat their subscribers right if they want to expect loyalty.

As for the whole CDMA is an old technology argument, yes, maybe, but it's also used by the most reliable networks. T-Mobile was GSM and highly unreliable when I was on it (maybe better now), and AT&T is only moderately better. I would also bet that the CDMA iPhone has a 4G antennae. I'm sure the major carriers have some idea of what they're going to use and will tell Apple to build it in. The 3GS came with upgraded HSDPA or whatever before it was even widely available. So I don't expect that to be too big of an issue. I'll probably buy it either way. Good news day.

I've seen some bad reception areas, but I am almost always in major cities. So I'll stick with AT&T, but I understand why some would want to switch.

I had a problem with calls going straight to voicemail that sounds like what you described. A full factory reset and wipe of all the data fixed it. I just restored contacts from my Mac address book and reloaded the apps without restoring a backup. Kinda drastic, but it worked for me. Some of your problems may not be a problem with the network.
post #25 of 76
Quote:
Originally Posted by Blackintosh View Post

For gosh sakes, don't let your friend get a iPhone 3G and upgrade to iOS4 or she will have the same problem. Apple plays that game too.

Sure there are always odd problems with anything, but I have not heard of any reported problems. Do you have instances of this or are you just spreading FUD. If you do a google search there are many instances of this happening to android phones and none for iPhones.
post #26 of 76
Quote:
Originally Posted by shadash View Post

Stop spreading FUD. I have never - never heard that 2.2 slows down a phone.

http://gizmodo.com/5549260/android-22-review

"In everyday use, the new compiler combined with Android's efficient memory management means that pretty much everything you do, in both the general OS as well as apps, feels more responsive."

Sure you have, from rtamesis. Froyo is a huge improvement over Eclair but the chance of a glitch on some devices during an install which could affect operation or performance is way to likely. Just like with the iPhone 3G being slower for some and faster for others under 4.0, there will be issues that crop up with every new OS update.
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post #27 of 76
I am happy with AT&T and won't be switching. My i4 is a tremendous improvement over all 3 previous generation iPhones here in Houston when it comes to data speeds, reception and dropped call volume. I hope Verizon gets the iPhone so we can see if it really was mostly AT&T or perhaps Apple had some issues programming their end as well. As for vcast, perhaps it could be an app. I am sure Apple will not allow Verizon to be the greedy punks they are. Verizon also won't just bend over, so that is most likely a major sticking point besides money.

Bring it Verizon. Let's see what you got.
post #28 of 76
Quote:
Originally Posted by shadash View Post

Stop spreading FUD. I have never - never heard that 2.2 slows down a phone.

http://gizmodo.com/5549260/android-22-review

"In everyday use, the new compiler combined with Android's efficient memory management means that pretty much everything you do, in both the general OS as well as apps, feels more responsive."


What if he's not spreading FUD? Is it so impossible that not one phone updated to 2.2 has issues? My friend has an iPhone 3G with 4.01 with zero issues. It's silly to to believe that every single person who updated to 2.2 has no issues. No update is 100% reliable.
post #29 of 76
I heard some great new Androids will be available on AT&T, probably that's why the IPhone will go to Verizon too. I hope they update the IPhone to match the top Androids on the market, also fix the antenna issue. I will like to be able to use my IPhone without Bumpers.
post #30 of 76
Quote:
Originally Posted by esummers View Post

Sure there are always odd problems with anything, but I have not heard of any reported problems. Do you have instances of this or are you just spreading FUD. If you do a google search there are many instances of this happening to android phones and none for iPhones.

Sure I have instances. I gave my 3G to my wife when I got my iP4. Like a fool, I trusted Apple and upgraded and the device is unusable. If you want proof, come over to the house and I'll give you a demo. This is a real issue that Apple acknowledged, according to an earlier AI article.
post #31 of 76
Quote:
Originally Posted by solipsism View Post

Sure you have, from rtamesis. Froyo is a huge improvement over Eclair but the chance of a glitch on some devices during an install which could affect operation or performance is way to likely. Just like with the iPhone 3G being slower for some and faster for others under 4.0, there will be issues that crop up with every new OS update.

I'll give you the 1 in a million chance this update slowed down her phone. But even if that's true, this is not like the iPhone 3G with the 4.0 update. The iPhone 4.0 update is a case of the OS being too much for dated hardware. It affects all phones. What you're describing with Froyo is a glitch that only affects her phone. Two different animals.
post #32 of 76
Quote:
Originally Posted by Soulbearer View Post

I heard some great new Androids will be available on AT&T, probably that's why the IPhone will go to Verizon too. I hope they update the IPhone to match the top Androids on the market, also fix the antenna issue. I will like to be able to use my IPhone without Bumpers.

It only really affects things in low signal areas. So you should be fine on Verizon.
post #33 of 76
Quote:
Originally Posted by maccherry View Post

if Verizon does get the iphone will it really be any better contract wise? Will Verizon try limiting the itunes ecosystem in favor of that nasty a** Vcast crap?
It remains to be seen huh.

No it actually doesn't remain to be seen. The "Vcast crap" was left off our Incredible. It is available for download on the Android store if people want it but is not forced on them. Check you facts.
post #34 of 76
Let's see...

September (09) - iPod,
March (03) - iPad,
June (06) - iPhone.

Plus all desktop systems updates...

There're already catastrophic production delays; and the word of the CEO has been dragged through the mire before the eyes of all serious crowds.

Is Apple crazier than the retarded blogosphere?

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post #35 of 76
Quote:
Originally Posted by Blackintosh View Post

For gosh sakes, don't let your friend get a iPhone 3G and upgrade to iOS4 or she will have the same problem. Apple plays that game too.

Nope, they don't. They haven't advised people to upgrade older phones to iOS4 - and they've made clear that it won't be fully functional as older phones won't fully support it.
post #36 of 76
Quote:
Originally Posted by Damn_Its_Hot View Post

I should have noted that it makes me no difference - since I will stick with AT&T. I have had a good experience with them. Good reception, no dropped calls, no complaints in general. It will be interesting to see how people react to Verizon once there is a choice - it is the savior now - I bet it'll be something totally different when people start using it and they are overloaded.

Certainly for the 75% of AT&T's happy iPhone customers it will make no difference.

It is interesting that since Job's last press conference in which he explained the issues in San Francisco re getting towers installed, there appears to be a significant drop in complaints on this site, as well as a significant endorsement of the iPhone and/or AT&T.

I would be happy to see Apple release an iPhone to run on Verizon and T-Mobile networks for a number of reasons.
  • Maximize the Apple's market opportunity
  • Counter the complaints often raised here
  • Offset the general 'cell phone' issues across more service providers
  • Raise the awareness, demand and usage of Apple's iPhones
  • Raise the awareness, demand and usage of all of Apple's offerings
If and when it happens, there will be an obvious and massive new audience of iPhone users. Immediately this will certainly have a negative impact on AT&T's sales and renewing current customer contracts. However, if the functionality of the iPhone model for Verison's network is not the same as as we have now, this will cause many to question on which direction to go. In addition, and more important, the overall interest and opportunity could crush the current movement of the likes of Android and such.

Bottom line: I would predict an overall increase in AT&T's service and customer base as the perceived issues are just that.

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post #37 of 76
Quote:
Originally Posted by esummers View Post

Sure there are always odd problems with anything, but I have not heard of any reported problems. Do you have instances of this or are you just spreading FUD. If you do a google search there are many instances of this happening to android phones and none for iPhones.

It's not FUD unfortunately. Before I got my iPhone 4, my iPhone 3G slowed down dramatically when I "upgraded" to iOS4.
post #38 of 76
Quote:
Originally Posted by shadash View Post

Stop spreading FUD. I have never - never heard that 2.2 slows down a phone.

http://gizmodo.com/5549260/android-22-review

"In everyday use, the new compiler combined with Android's efficient memory management means that pretty much everything you do, in both the general OS as well as apps, feels more responsive."

Well, we won't know for sure until the carriers get around to releasing 2.2 for a significant number of phones - which will occur somewhere around 2014 at the present rate.
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post #39 of 76
Quote:
Originally Posted by shadash View Post

I'll give you the 1 in a million chance this update slowed down her phone. But even if that's true, this is not like the iPhone 3G with the 4.0 update. The iPhone 4.0 update is a case of the OS being too much for dated hardware. It affects all phones. What you're describing with Froyo is a glitch that only affects her phone. Two different animals.

Don't be obtuse and stop spreadimg FUD you know very well Apple trimmed 4.0 to make it viable for the 3G and this is the exact same thing.
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post #40 of 76
Quote:
Originally Posted by lkrupp View Post

I'm a firm believer in the "grass is greener" philosophy. At&t and Verizon are the two biggest cellular carriers in the U.S. They didn't get there by screwing their customers and having crappy networks. For all the caterwauling about at&t's network it's not any better or worse than Verizon's, no matter what the at&t haters/Verizon fanboys pontificate. We just hear their loud screams the most, just like very other issue of the day that is blown way out of proportion by the anonymity of the internet. Antennagate comes to mind.

If and when the iPhone comes to Verizon, or any other carrier, there will be fans and haters. The iPhone will be blamed by some, Verizon by others. There will be no mass exodus from at&t as the whiners and screamers predict for all the reasons discussed by at&t executives.

What will be interesting to see is what effect the iPhone will have on Android sales. At&t already has a number of Android phones available. To my knowledge we have no hard information of how Android is doing within the at&t network vs the iPhone. Surveys seem to indicate that a good number of Android users would switch to the iPhone if it were available on their carrier. We already know that Android is not going all that gangbusters in other parts of the world where the iPhone is available on multiple carriers.

Of course there wont be a mass exodus ATT made sure of that by offering early upgrades and doubling the ETF.
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