Apple seen extending exclusive iPhone deal with AT&T
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.
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.
Comments
The only people who didn't see this coming are the Verizon fanbois...
You guys got that? Good, so shut up with your idiotic speculation and start using your brain.
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.
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.
It's just a shame that all the networks require specific frequencies/chips etc.
Riddle: What is functional, controlling and optional, but not commanding?
Answer: PageUp on a Macbook keyboard.
How is this intuitive ?
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
Next week: an article stating that AT&T will not retain exclusivity.
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
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.
In a decade all the US carriers will be using LTE, even Sprint after they're bought out
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.
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.
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.
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.
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.
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.
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.