Apple predicted to extend exclusive contract with AT&T

Posted:
in iPhone edited January 2014
While most predictions of late suggest Apple will end its exclusive iPhone arrangement with AT&T next year, a new analysis bucks that line of thinking.



In a new report filed Thursday, iSuppli Corp. predicts that Apple will extend its exclusive deal with AT&T next year, based on anticipated growth of High Speed Packet Access technology being adopted by the wireless carrier. The report states that HSPA subscribers are projected to hit 1.4 billion in 2012, while competing standard EVDO, used by Verizon, will have only 304.6 million users by 2013.



"Speculation is rife that Apple will end its exclusive U.S. iPhone service deal with AT&T when the current contract expires in June 2010 and begin to offer phones that work with the Verizon network," said Francis Sideco, principal analyst, wireless communications. "However, iSuppli doesn’t believe this will be the case."



But the same report questions whether extending the contract with Apple would be a good idea for AT&T. It states that the iPhone has been a "mixed blessing" for the wireless carrier, bringing new subscribers but creating bandwidth shortages across the network.



"Facing dropped calls, service interruptions and slow download speeds, iPhone users in certain markets are blaming AT&T," said Jagdish Rebello, director and principal analyst. "iPhone users are overloading AT&T’s network with data traffic generated by the download and usage of apps. However, the real problem is that AT&T has not found a way to monetize data traffic generated by the iPhone."







In recent weeks, AT&T has conceded that its network performance has been less than optimal. In response, the company has vowed to improve, and plans to invest more than $17 billion in the next year to improve its wireless service.



However, the report suggests that Apple could still strike a wireless data deal with Verizon -- but for a product other than the iPhone. The report states that there is no evidence that the current contract with AT&T would prevent Apple from going to Verizon for its long-rumored tablet device, a connected iPod touch, a netbook, or perhaps a new model of the iPhone.
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Comments

  • Reply 1 of 130
    Quote:
    Originally Posted by AppleInsider View Post


    However, the report suggests that Apple could still strike a wireless data deal with Verizon -- but for a product other than the iPhone. ... or perhaps a new model of the iPhone.



    Talk about waffling.
  • Reply 2 of 130
    The article states that Att will invest 17 billion in its wireless network. I believe what the Deathstar company actually said was it would invest 17 billion in its entire network which would include its land lines, dsl service, etc.
  • Reply 3 of 130
    The thing iSuppi is overlooking is Verizon's massive push to incorporate 4g technology into it's network, which will be HSPA compatible. Apple would be right to avoid an EVDO-based phone, and won't need it to work with Verizon come next year. The ATT iphone userbase is almost saturated, it would be completely asinine to extend an exclusivity deal with them, when they can sell many more iphones by opening up to Verizon 4G when that network comes to fruition next year.
  • Reply 4 of 130
    I don't doubt they'll continue to offer the iPhone through AT&T, but why on earth would they extend an exclusivity contract? Seems to me at least one other carrier out there must be willing to bend to Apple's demands to get a piece of the iPhone pie. AT&T would be crazy at this point to hit Apple with an exclusivity ultimatum.
  • Reply 5 of 130
    maybe part of that 17 billion will be a exclusive signing bonus to Apple??



    I can't see why Apple would extend the exclusivity, considering the current status of the saturated data network of AT&T.
  • Reply 6 of 130
    "AT&T has not found a way to monetize data traffic generated by the iPhone."



    Uhhh? so me paying $30 a month for my data plan is not monetizing? WTF?
  • Reply 7 of 130
    Quote:
    Originally Posted by tacojohn View Post


    "AT&T has not found a way to monetize data traffic generated by the iPhone."



    Uhhh? so me paying $30 a month for my data plan is not monetizing? WTF?



    No, it's not. At least, it's not monetizing demand for bandwidth. You pay $30 whether you look at a web page every now and then or whether you're streaming Pandora all day and night. Maybe it'd be more accurate to say that AT&T hasn't found a way to monetize the heavy usage that the iPhone has generated.



    At least they're smart enough to not try to limit data usage. Or maybe it's a contractual agreement with Apple that they won't. *That* would be the obvious, and totally disastrous, thing to do.
  • Reply 9 of 130
    Nooooo!



    I want choice and competition!
  • Reply 10 of 130
    Quote:
    Originally Posted by ranson View Post


    Apple would be right to avoid an EVDO-based phone, and won't need it to work with Verizon come next year.



    Only if they don't feel like selling iPhones to users in markets without full 4G coverage. Which will be nearly all of them.

    4G-only won't be a feasible solution for at least 2 years. Even with VZW throwing money at the problem the way they have been.



    Apple sticking with AT&T for another year would be a mistake.
  • Reply 11 of 130
    nagrommenagromme Posts: 2,834member
    iSuppli's guesswork has little relevance. They're promoting themselves and getting press attention--and I suspect that's about all this is worth.
  • Reply 12 of 130
    Quote:
    Originally Posted by BrooksT View Post


    No, it's not. At least, it's not monetizing demand for bandwidth. You pay $30 whether you look at a web page every now and then or whether you're streaming Pandora all day and night. Maybe it'd be more accurate to say that AT&T hasn't found a way to monetize the heavy usage that the iPhone has generated.



    At least they're smart enough to not try to limit data usage. Or maybe it's a contractual agreement with Apple that they won't. *That* would be the obvious, and totally disastrous, thing to do.



    Regardless? they're still making money from my plan price. If they're not? then they're stupid for offering that service at a price they couldn't afford to sustain.
  • Reply 13 of 130
    teckstudteckstud Posts: 6,476member
    Hmmmm- this comes the day after Apple opts not to include a mic in the camera-less iPod Touch?
  • Reply 14 of 130
    wingswings Posts: 261member
    Quote:
    Originally Posted by ranson View Post


    The thing iSuppi is overlooking is Verizon's massive push to incorporate 4g technology into it's network, which will be HSPA compatible. Apple would be right to avoid an EVDO-based phone, and won't need it to work with Verizon come next year. The ATT iphone userbase is almost saturated, it would be completely asinine to extend an exclusivity deal with them, when they can sell many more iphones by opening up to Verizon 4G when that network comes to fruition next year.



    Come next year? When Verizon's 4G will be in some (or even most) areas, what would a 4G Apple iPhone fall back on when in locations where 4G isn't available? Did you say CDMA? Everything I've read about Apple & CDMA says that ain't ever gonna happen. So if Apple ever does come to Verizon I think it won't be until Verizon's 4G is *everywhere* (i.e., long time, not next year).
  • Reply 15 of 130
    It seems illogical to me to compare world wide GSM/CDMA stats considering that:



    1. CDMA for the most part is not used outside of North America; and



    2. AT&Ts iPhone contract does not extend beyond the border of the U.S.A.
  • Reply 16 of 130
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by Wings View Post


    Come next year? When Verizon's 4G will be in some (or even most) areas, what would a 4G Apple iPhone fall back on when in locations where 4G isn't available? Did you say CDMA? Everything I've read about Apple & CDMA says that ain't ever gonna happen. So if Apple ever does come to Verizon I think it won't be until Verizon's 4G is *everywhere* (i.e., long time, not next year).



    That doesn't change anything re: extending exclusivity. It just means that only *some* Verizon customers could take advantage. There's no reason for Apple to throw away those customers for two years until the coverage is complete.
  • Reply 17 of 130
    john.bjohn.b Posts: 2,740member
    The minimum deal Apple should make is that AT&T should not be allowed to extend features like tethering, etc. to its subscribers who use crackberries without also allowing that option (at the same pricing) to iPhone users.



    AT&T's whining about investing tens of billions into their network every year is a red herring. They'd have to do that anyway, just to keep up with their peers. Even cash-strapped Sprint invests similar money in developing and upgrading their network.
  • Reply 18 of 130
    john.bjohn.b Posts: 2,740member
    Quote:
    Originally Posted by Wings View Post


    Come next year? When Verizon's 4G will be in some (or even most) areas, what would a 4G Apple iPhone fall back on when in locations where 4G isn't available? Did you say CDMA? Everything I've read about Apple & CDMA says that ain't ever gonna happen. So if Apple ever does come to Verizon I think it won't be until Verizon's 4G is *everywhere* (i.e., long time, not next year).



    Well said, and exactly right.
  • Reply 19 of 130
    I think they'll release the 'tablet' branded as the new iBook and 3G and/up upwards in speed will be sold through ATT, especially as a piggy back to your iPhone plan now. And they'll add books to iTunes as a service similar to Apps and books on the Kindle but using an open source format. Why on earth would I sign extended contracts with both Verizon and AT&T based upon my device. That's why ATT will continue to get exclusivity because the tablet will augment the already existing huge install base of iPhones, just like the iPhone took advantage of the install base of the iPod. Think about the whole line of Apple devices and their respective purpose: iPod (Music and Games), iPhone (Music, Phone, Web Lite), iBook (Books, Web w/Flash, Computing Lite), MacBook (Computing).
  • Reply 20 of 130
    Quote:
    Originally Posted by tacojohn View Post


    "AT&T has not found a way to monetize data traffic generated by the iPhone."



    Uhhh? so me paying $30 a month for my data plan is not monetizing? WTF?



    That's exactly what I felt when I read that. Pretty soon they will be charging as much as cable broadband for this lousy data plan.
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