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Apple inks new iPhone deal with AT&T, all exclusive contracts now over

post #1 of 71
Thread Starter 
Apple announced that in addition to its new non-exclusive agreement with Verizon, it had signed a new non-exclusive agreement with AT&T that brings to a close all carrier-exclusive iPhone contracts worldwide.

Without going into details, Apple's chief operations officer Tim Cook described signing "a multi-year, non-exclusive deal with AT&T," before affirming that "we are not in a contractual exclusivity now in any country in the world; the last one was the US. We have moved away from those."

Cook also noted that "we've seen this in every case where we've moved from exclusive carrier arrangement to a dual- or multi-carrier arrangement: our growth has changed significantly and our market share has increased," although he said that "Not in every country nor are we out doing that [signing up multiple carriers] in every country. Each market has their own parameters and technology."

That raised the question of whether Apple would be using its CDMA iPhone 4, unveiled in its new carrier relationship with Verizon Wireless in the US, to expand its carrier partnerships in other countries, where CDMA offers either another avenue for growth, or a far superior carrier partnership potential.

Cook refused to comment on specifics, saying, "Don't want to comment about any specific country, because any conversations ongoing are confidential in nature," before adding, "I can guarantee you that we always are looking at opportunities to grow."

Responding to a question of whether it was "unreasonable to expect to see more CDMA carriers going forward," Cook replied, "On the CDMA front, I don't have anything specific to announce today other than we are thrilled to be working with the Verizon team. A lot of respect for their customers and some of them have waited a long time for an iPhone."

Cook added, "And non-Verizon customers that wish to buy an iPhone," artfully dodging the idea that a significant number of AT&T's existing iPhone users are expected to jump ship for Verizon simply to have basic service on their phone.

Broadening Apple's Verizons

Outside of the US, India has the second largest deployment of CDMA, offering roughly 100 million subscribers. Apple currently has partnerships with Vodafone and Airtel, but is still only officially offering the iPhone 3G in the country.

A reader reports that the state owned BSNL recently released a carrier settings update for his iPad, suggesting Apple may be bringing its tablet and newer iPhones to the country's largest carrier soon.

However, the CDMA iPhone 4 now enables Apple to also partner with Reliance, which serves around 57 million CDMA subscribers in the country. It also has a smaller GSM business of 30 million users.

Similarly, Apple's current iPhone partner in China, China Unicom, has been its only real choice for partnership because it runs the only real GSM/UMTS network in the country. Its smaller competitor, China Telecom, operates a CDMA mobile network with a stronger presence in the south. The largest Chinese carrier, China Mobile, offers little 3G service but is building out its own proprietary TD-SCDMA network, which is unique to China and would require its own new iPhone design to use.

The CDMA iPhone 4 would similarly enable Apple to partner with China Telecom, establishing dual carriers in the country and reaching areas where its existing carrier offers weaker service. China Telecom appears to serve around 40 million CDMA customers.

While Verizon-compatible CDMA mobile service is being replaced in most countries around the world with new generations of 3GPP standards, just between those two potential new carriers in China and India, Apple has an addressable market for CDMA subscribers similar to that of Verizon in the US.
post #2 of 71
Looks like Apple made all the right moves.
post #3 of 71
Quote:
Originally Posted by iLoveStuff View Post

Looks like Apple made all the right moves.

They've been doing a lot of that recently.

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post #4 of 71
No company makes all the right moves.

Apple has done a splendid job compared with the rest of the S&P 500 though.

I am curious to know why the other 499 companies are paying their CEOs so much. Steve Jobs' annual salary is $1. Maybe the Google guys are getting paid that little, but everyone else is making a lot more money for less increase in shareholder value.
post #5 of 71
Don't forget the japanese on CDMA carrier au/KDDI. They may be far fewer than the potential customers in India and China, but on average each is likely more wealthy.
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post #6 of 71
I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!
post #7 of 71
So are they going to unlock AT&T existing iPhones upon the users request?!
post #8 of 71
Quote:
Originally Posted by NasserAE View Post

So are they going to unlock AT&T existing iPhones upon the users request?!

That is a great question. Somehow I doubt it though. I think this means you don't have to get stuck with AT&T, but once you choose your carrier your stuck with them for the duration. This does bode well for Sprint and T-Mobile coming soon though.
post #9 of 71
Maybe there is an obvious answer, but why would AT&T need to sign a new non-exclusive deal with Apple? I don't see the advantage to AT&T.

TIA
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post #10 of 71
Quote:
Originally Posted by shadash View Post

That is a great question. Somehow I doubt it though. I think this means you don't have to get stuck with AT&T, but once you choose your carrier your stuck with them for the duration. This does bode well for Sprint and T-Mobile coming soon though.

AT&T agreed in a lawsuit settlement to unlock all handset for which they have no exclusive agreement. At that time the AT&T and Apple had exclusive agreement for the iPhone. Now is a different story. I think people should start calling AT&T and demand explanation.
post #11 of 71
Quote:
Originally Posted by NasserAE View Post

AT&T agreed in a lawsuit settlement to unlock all handset for which they have no exclusive agreement. At that time the AT&T and Apple had exclusive agreement for the iPhone. Now is a different story. I think people should start calling AT&T and demand explanation.

I didn't know that. I'm calling tomorrow.
post #12 of 71
Quote:
Originally Posted by Natmac View Post

I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!

For now. I think what you got was a big indication that that will soon change.
post #13 of 71
Quote:
Originally Posted by Natmac View Post

I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!

He did not say that there are no countries with only a single carrier; he said there are no existing contracts which provide carrier exclusivity.
post #14 of 71
Quote:
Originally Posted by Natmac View Post

I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!

Softbank might be the only current carrier, but that doesn't mean they have an exclusive contract. Apple can sign with the other carriers.
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post #15 of 71
Quote:
Originally Posted by shadash View Post

I didn't know that. I'm calling tomorrow.

And you really think the lowly CSR is going to know an answer? Keep dreaming. If you dream hard enough, you'll get a gold iPhone.
post #16 of 71
Quote:
Originally Posted by cvaldes1831 View Post

No company makes all the right moves.

Apple has done a splendid job compared with the rest of the S&P 500 though.

I am curious to know why the other 499 companies are paying their CEOs so much. Steve Jobs' annual salary is $1. Maybe the Google guys are getting paid that little, but everyone else is making a lot more money for less increase in shareholder value.

Except he's not getting paid just $1. His earnings come though a bonus rather than salary, which I understand is taxed lower.
post #17 of 71
Quote:
Originally Posted by ChickenHawk View Post

Except he's not getting paid just $1. His earnings come though a bonus rather than salary, which I understand is taxed lower.

Oh, I don't think so. At least for 2011, bonus income (other than capital gain distributions from mutual funds) is taxed as ordinary income at your highest marginal tax rate.

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post #18 of 71
Quote:
Originally Posted by Natmac View Post

I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!

Nice first post.

But I am confident that Tim Cook knows more about what Apple is doing and where and with whom Apple is doing it.
post #19 of 71
Quote:
Originally Posted by city View Post

Softbank might be the only current carrier, but that doesn't mean they have an exclusive contract. Apple can sign with the other carriers.

Actually, Softbank is the EXCLUSIVE iphone carrier in Japan.
post #20 of 71
Quote:
Originally Posted by Natmac View Post

Actually, Softbank is the EXCLUSIVE iphone carrier in Japan.

No, they are currently the only carrier in Japan offering the iPhone. Cook made it very clear that there are no longer any contracts providing carrier exclusivity:
Quote:
Without going into details, Apple's chief operations officer Tim Cook described signing "a multi-year, non-exclusive deal with AT&T," before affirming that "we are not in a contractual exclusivity now in any country in the world; the last one was the US. We have moved away from those."
post #21 of 71
Quote:
Originally Posted by penchanted View Post

He did not say that there are no countries with only a single carrier; he said there are no existing contracts which provide carrier exclusivity.

I hear you, but Softbank is reported as the exclusive provider in Japan...
post #22 of 71
Apple signed a 5 year exclusive contract with AT&T, beginning in 2007. Apple can't possibly get out of that contract until 2012. People expecting a Verizon iPhone before then don't know what they are talking about.
post #23 of 71
Quote:
Originally Posted by Natmac View Post

I hear you, but Softbank is reported as the exclusive provider in Japan...

Old information. I quoted the new facts above.

Are you suggesting that Tim Cook lied during the earnings call?
post #24 of 71
Quote:
Originally Posted by penchanted View Post

Old information. I quoted the new facts above.

Are you suggesting that Tim Cook lied during the earnings call?

If you believe in the wrong information, does that make you a liar?
post #25 of 71
Quote:
Originally Posted by penchanted View Post

Old information. I quoted the new facts above.

Are you suggesting that Tim Cook lied during the earnings call?

Are you suggesting that he is incapable of making a mistake? Show me some information (other than what Mr. Cook said) that says otherwise and I'll beleive... All I know is that Softbank is reported as the "exclusive" provider in Japan, and I have not read anything to suggest otherwise.
post #26 of 71
Quote:
Originally Posted by Natmac View Post

Are you suggesting that he is incapable of making a mistake? Show me some information (other than what Mr. Cook said) that says otherwise and I'll beleive... All I know is that Softbank is reported as the "exclusive" provider in Japan, and I have not read anything to suggest otherwise.

I think Apple's COO is probably a more authoritative source of information on Apple's contracts that you and whoever your source is. It is highly unlikely that he would make such a gaffe during an earnings call without Apple issuing a correction for the news media.
post #27 of 71
> A reader reports that the state owned BSNL recently released a carrier
> settings update for his iPad, suggesting Apple may be bringing its tablet
> and newer iPhones to the country's largest carrier soon.

probably meant VSNL (now Tata).
I wonder what kind of typo/mishearing PCCW will bring us.
post #28 of 71
Quote:
Originally Posted by NasserAE View Post

So are they going to unlock AT&T existing iPhones upon the users request?!

Actually my 3G is getting old thus I would be happy to get a new iPhone unlocked. It is a big deal for people that travel.
post #29 of 71
Quote:
Originally Posted by ChickenHawk View Post

Except he's not getting paid just $1.

Yes he is.
Quote:
His earnings come though a bonus rather than salary, which I understand is taxed lower.

Since Steve has not collected a bonus since 2001 (Lear jet)), tax rate is irrelevant.
post #30 of 71
Quote:
Originally Posted by wizard69 View Post

Actually my 3G is getting old thus I would be happy to get a new iPhone unlocked. It is a big deal for people that travel.

AT&T offered me iPhone 4 upgrade on the main line on my family plan last July. So I bought two iPhone 4s from Canada unlocked and sold the older iPhones for $360 each on ebay in August.
post #31 of 71
Seriously people, let's not over think the meaning of exclusivity!

Yes, from the viewpoint of a consumer, Softbank is exclusively selling the iPhone.

However, from what Cook said, if all exclusivity is over, then they may be in discussions with Docomo and/or AU. "No more exclusivity" doesn't mean all carriers are going to come to a contractual agreement with Apple. Apple still has demands that some carriers don't like. So yep you can only officially buy an iPhone and get a plan at Softbank at the moment, but the possibilities are open. I'm really tired of Softbanks network slowdowns.
post #32 of 71
Quote:
Originally Posted by prosp View Post

Maybe there is an obvious answer, but why would AT&T need to sign a new non-exclusive deal with Apple? I don't see the advantage to AT&T.

TIA

Because the original deal between Apple and AT&T expired. Without a new deal, AT&T would not be able to get a supply of iPhones to sell to customers to get phone plan revenue.
post #33 of 71
Quote:
Originally Posted by urbansprawl View Post

Seriously people, let's not over think the meaning of exclusivity!

I'm really tired of Softbanks network slowdowns.

Amen, brother. Not to mention terrible coverage area...
post #34 of 71
Quote:
Originally Posted by Natmac View Post

Are you suggesting that he is incapable of making a mistake? Show me some information (other than what Mr. Cook said) that says otherwise and I'll beleive... All I know is that Softbank is reported as the "exclusive" provider in Japan, and I have not read anything to suggest otherwise.

KDDI’s AU will soon be the second japanese company carrying the iPhone4 - according to the source here.

http://en.akihabaranews.com/80854/le...oming-to-japan

and here:

http://thenextweb.com/apple/2011/01/...d-south-korea/

and here:

http://www.electronista.com/articles...eyond.verizon/

So no, Softbank may be the company currently offering the iPhone but they do NOT have an exclusive agreement with Apple for the iPhone. Tim Cook correct, Natmac, not so much.

[EDIT}: There is a very specific business meaning to exclusivity that you may be willfully ignoring or of which you may be ignorant. Since Tim Cook (like Peter Oppenheimer and Steve Jobs) is very specific about what he says in these meetings, this has ramifications for making that statement - which had it not been true would most likely been called out by one of the media reporters during the Q&A session. As they did not and given the specifics of exclusivity, it doesn't matter that a consumer "thinks" something is "exclusive", if in fact it simply is not.
post #35 of 71
The FCC showed last May the iPhone 4 is pentaband and contains the UMTS band for Japan’s largest carrier, NTT docomo. Obviously a deal hasn’t been struck with them, but why?
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post #36 of 71
Quote:
Originally Posted by LewysBlackmore View Post

KDDIs AU will soon be the second japanese company carrying the iPhone4 - according to the source here.

http://en.akihabaranews.com/80854/le...oming-to-japan

and here:

http://thenextweb.com/apple/2011/01/...d-south-korea/

and here:

http://www.electronista.com/articles...eyond.verizon/

So no, Softbank may be the company currently offering the iPhone but they do NOT have an exclusive agreement with Apple for the iPhone. Tim Cook correct, Natmac, not so much.

Ok, all those sources really just say is that the CDMA phone is coming to Japan. The coming to AU stuff is speculation.

However, I have found information that does indeed state that the contract with Softbank is NOT EXCLUSIVE. However, Apple and softbank have a "close tie" and Apple has aggreed to SIM lock the iPhone in Japan so that it can only be used by Softbank. So although the contract between Apple and Softbank is technically not "Exclusive", Softbank is still the "Exclusive " provider because Apple does not allow the iPhone to be used by other providers. This of course can be change by Apple.
So, Mr. Cook was correct in saying there are no exclusivity contracts. However, Softbank is still actually the "Exclusive" provider in Japan, as I stated.
post #37 of 71
Quote:
Originally Posted by Natmac View Post

Ok, all those sources really just say is that the CDMA phone is coming to Japan. The coming to AU stuff is speculation.

However, I have found information that does indeed state that the contract with Softbank is NOT EXCLUSIVE. However, Apple and softbank have a "close tie" and Apple has aggreed to SIM lock the iPhone in Japan so that it can only be used by Softbank. So although the contract between Apple and Softbank is technically not "Exclusive", Softbank is still the "Exclusive " provider because Apple does not allow the iPhone to be used by other providers. This of course can be change by Apple.
So, Mr. Cook was correct in saying there are no exclusivity contracts. However, Softbank is still actually the "Exclusive" provider in Japan, as I stated.

This is similar to the arrangement in the US and other countries. Locked does not mean exclusive though.
post #38 of 71
Quote:
Originally Posted by penchanted View Post

This is similar to the arrangement in the US and other countries. Locked does not mean exclusive though.

The contract with AT&T in the US was carrier exclusive. The contract with Softbank is not.

And what do you call it if no other carrier is allowed to offer the iPhone except Softbank?
Most other reports use the word "Exclusive" for this arrangement with Softbank.
(e.g.: http://asia.cnet.com/blogs/onebeats-...tm?id=63020412)

Enlighten us. What expression should we be using?
post #39 of 71
Quote:
Originally Posted by Natmac View Post

I guess Japan in not a "country in the world" because the iPhone is still exclusive to Softbank here.... He's the COO right? Shouldn't he know that!

Exclusive to one company doesn't now mean that Apple isn't negotiating with the others. They may also have to wait for the contract to end.
post #40 of 71
Quote:
Originally Posted by ChickenHawk View Post

Except he's not getting paid just $1. His earnings come though a bonus rather than salary, which I understand is taxed lower.

I don't know what you understand, because he's been getting $1 dollar a year since 2003. That includes bonus's, options and stock. He does get two things though. He gets reimbursed for the jet when used for corporate business, and a medical care plan.

And so you should know, no executive of Apple gets golden parachutes or termination pay.
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