AT&T pushing to keep iPhone exclusive through 2011
Having locked down the iPhone for at least three years, AT&T is now expected to take one more shot at an exclusive deal for the Apple handset and may keep it away from competitors until 2011.
Talking to the expected "people familiar with the matter," the Wall Street Journal hears that AT&T has a deal to keep the iPhone in its stable until 2010 and that negotiations are underway to have the device onboard for one more year.
Not surprisingly, there is no word from AT&T on the subject, and an Apple spokeswoman would only say that the two companies have a "great relationship."
The supposedly inside information echoes a report from last year that also said AT&T had struck a deal to keep the iPhone until 2010 and may provide insight into current talks. At the time, the cellular carrier reportedly agreed to allow iPhone 3G subsidies in exchange for a one-year extension of the iPhone's US exclusivity. Although the cost of discounting those phones has been severe -- as much as $1.3 billion to date, according to an estimate -- the agreement renewed interest in AT&T and gave it millions of users paying at least $60 per month (on grandfathered plans) for service.
Also, the iPhone gives AT&T a way of keeping customers from jumping ship to Verizon or another alternative at a time when the market is saturated and customers are more likely to have switched than sign up for the first time. The company added 1.9 million iPhone users just in the fall 2008 quarter alone and notes that many of these are less likely to give up on service than those who use other phones.
No matter how successful AT&T may be in lengthening its time spent with the iPhone, the firm is likely to maintain an inherent technological basis for holding the device close until two years later. As the only major US carrier with 3G using the HSPA standard on the 850MHz band, the iPhone as-is only supports its service for full data. Adapting the phone to T-Mobile USA would most likely require adding the 1,700MHz band, while switching to Sprint or Verizon would, for now, need a complete overhaul that swaps in CDMA calling and 3G access using EVDO; either of these is expected to gradually phase out.
Eventually, AT&T and Verizon will share the same network format when they both move to 4G using the Long Term Evolution format, but neither expects to have any significant networks until 2010, rendering any truly multi-carrier US iPhone impractical until the possible new expiry date for the agreement between AT&T and Apple.
Talking to the expected "people familiar with the matter," the Wall Street Journal hears that AT&T has a deal to keep the iPhone in its stable until 2010 and that negotiations are underway to have the device onboard for one more year.
Not surprisingly, there is no word from AT&T on the subject, and an Apple spokeswoman would only say that the two companies have a "great relationship."
The supposedly inside information echoes a report from last year that also said AT&T had struck a deal to keep the iPhone until 2010 and may provide insight into current talks. At the time, the cellular carrier reportedly agreed to allow iPhone 3G subsidies in exchange for a one-year extension of the iPhone's US exclusivity. Although the cost of discounting those phones has been severe -- as much as $1.3 billion to date, according to an estimate -- the agreement renewed interest in AT&T and gave it millions of users paying at least $60 per month (on grandfathered plans) for service.
Also, the iPhone gives AT&T a way of keeping customers from jumping ship to Verizon or another alternative at a time when the market is saturated and customers are more likely to have switched than sign up for the first time. The company added 1.9 million iPhone users just in the fall 2008 quarter alone and notes that many of these are less likely to give up on service than those who use other phones.
No matter how successful AT&T may be in lengthening its time spent with the iPhone, the firm is likely to maintain an inherent technological basis for holding the device close until two years later. As the only major US carrier with 3G using the HSPA standard on the 850MHz band, the iPhone as-is only supports its service for full data. Adapting the phone to T-Mobile USA would most likely require adding the 1,700MHz band, while switching to Sprint or Verizon would, for now, need a complete overhaul that swaps in CDMA calling and 3G access using EVDO; either of these is expected to gradually phase out.
Eventually, AT&T and Verizon will share the same network format when they both move to 4G using the Long Term Evolution format, but neither expects to have any significant networks until 2010, rendering any truly multi-carrier US iPhone impractical until the possible new expiry date for the agreement between AT&T and Apple.
Comments
Unbelievable. This is wrong. We need to start a movement online to tell Apple we are not happy and this is not acceptable. We need some fair competition.
Serious competition will only come when Verizon switches over to LTE UMTS. Currently, AT&T already does UMTS while Verizon is still using the old EVDO.
http://digg.com/apple/at_t_looks_to_...hone_exclusive
Although the cost of discounting those phones has been severe the agreement renewed interest in AT&T and gave it millions of users paying at least $60 per month (on grandfathered plans) for service.
I don't understand this sentence. It read to me that I could have gotten the cheaper iPhone data plan when i moved to the 3G iPhone because I had the original iPhone at the time. I'm sure this is not correct so what am I missing here?
Unbelievable. This is wrong. We need to start a movement online to tell Apple we are not happy and this is not acceptable. We need some fair competition.
What movement would that be? A movement to force Apple to engineer a second iPhone that works on CDMA-base networks and a third iPhone that works with T-Mobile's wonky cellular radio frequencies? A movement to force Apple to note have exclusive deals with carriers even though they existed long before Apple's foray into the cellular market and still exist today, the next major one being the Palm Pre on Sprint? Or would this be a movement to make Apple be a socialized company while all other companies can act normally within a free market?
You don't have to like it, but it normal business to have exclusive deals and it's completely legal. What is unusual is that handset is so successful that the carrier wants to extend the deal even longer despite the cost it incurs for maintaining this partnership. Though as the article stated, since there is no other viable non-MVNO carrier in the US that can handle Apple's GSM/UMTS-phone that is pretty universal in most major cell countries.
Verizons is much better but I doubt there will be a CDMA iphone.
The non-stockholder part of me hopes that Apple doesn't make a CDMA phone for China Unicom. When they do these forums will be filled with all sorts of new posters whining "why isn't Apple releasing it here".
I don't see a reason not to if they're going to be staying GSM only for the iPhone 3G. the 4G, however, should not have an exclusive deal.
I would think that it wouldn't be, but if AT&T offers to pay Apple enough and to add the network features that Apple wants then it might happen as it would surely set the iPhone apart even further and let Apple play in areas that other cellphone vendors don't get to play in. Without the carrier lock in there are many aspects of the iPhone that would never had seen the light of day from a carrier with subsidy and the data plan would never have started at $20. We'd have to buy it from Apple Store and their retailers at full price.
PS: @ Trapt, Buried your Digg link for being incorrect of your assessment of what competition is.
I'd love an iPhone not on AT&T. Their network sucks. Go to other carriers and I'll buy one.
Exactly.
The AT&T network around here completely sucks. Even the demo iPhones (As well as my own) always say "No Service" at Wal-mart. It is laughable. Apple needs to think about what would benefit the customer who buys their products.
I'd love an iPhone not on AT&T. Their network sucks. Go to other carriers and I'll buy one.
As has been said already, it's almost certainly not going to happen in the US until after 2010 when a carrier other than ATT migrates their network.
It's pointless to blame Apple, the cell market here in the US is wonky and it's not Apple's fault.
Tying a cell phone to one carrier is something consumers really should demand an end to. Imagine a computer that could only use cable internet and not DSL, or a TV that could only use one cable company, a car that was restricted to certain roads, etc. Yes, I'm aware that cell phones are subsidized. I'd like to see that end too. Bring on an era of truth in pricing.
Personally want to see US Cellular get the iPhone, but since they are such a small company I doubt it will anytime soon. Would be great if AT&T would buy US Cellular though. End of problem.
Exactly.
The AT&T network around here completely sucks. Even the demo iPhones (As well as my own) always say "No Service" at Wal-mart. It is laughable.
Let's consider your previous request. Let's say that no cellphone is allowed to be tied to a carrier in any exclusive deal. Now let's say that the iPhone can be yours and you can buy it outright at the full cost of $600-$800. What carrier would you choose and why would you choose them?
The CDMA tech with EVDO is actually much more mature than UMTS 3G. It uses synch CDMA and it is very power efficient as more reliable as the Verizon network indicates, especially in the lower frequencies. It is cheaper than UMTS to implement.
Companies like QCOM offer chipsets that can support both systems plus legacy GSM all in the same phone. Apple has a great product... the best. However, in tech there is always somebody trying to improve. 2011 is an eternity in tech.
I like the iPhone, and I have been to the ATT store thinking about switching over to ATT, but their onerous terms along with reported poor coverage was a bitter pill to swallow so I backed away.
Apple is just being insensitive to the consumer needs. It is not big deal to have phones offered to different carriers supporting different radio technologies and frequency bands. Black Berry products are offered across GSM, CDMA, etc.
RiM has been making cellphones for how long now? I don't think it's uncommon for a company to start small and eventually expand once it's outgrown its comfort zone. Despite the excellent first release of the iPhone — which is partly due to not only releasing on one carrier but have an exclusive agreement with the carrier that allowed them to try some new things to improve the user experience — there is plenty of evidence that Apple had some growing pains with the cellular aspect of their popular device. Even Palm with their long history is starting out with an exclusive Sprint contract with their Pre, just as other before and other after them will do.
But despite this long term experience that RiM has had with US cellular carriers what you state isn't exactly true. The BlackBerry Storm debuted exclusively on Verizon's network in the same way that Apple first debuted its iPhone exclusively with AT&T. The Storm is considered a true world phone in that it has CDMA/EV-D0 and GSM/UMTS radios in it (though oddly lacking WiFi), Yet despite this inclusion of GSM/UMTS, the only data that will work on US GSM-based carriers is GPRS and EDGE as the 3G radios are incompatible with N. America. That doesn't sound like RiM is supporting all US carriers like you say.
it's shameful shit
Unbelievable. This is wrong. We need to start a movement online to tell Apple we are not happy and this is not acceptable. We need some fair competition.
I have had no problems with AT&T, beyond those that one can experience with any carrier. In Chicago, AT&T 3G service has been terrific. I travel a great deal, and seldom have anything but the usual "transient" cell phone problems.
I accept that others can have problems elsewhere.
However AT&T have been a loyal partner with Apple, showing enthusiasm and opening up the whole cellphone world to a company (Apple) that most "experts" said would never break thru in the cell market.
Loyalty counts.
AT&T should of course be encouraged to make improvements and changes. But our whole experience will be degraded if any poor schmuck can offer iPhones.
Loyalty counts, and should be rewarded and encouraged, not abandoned at the first available opportunity.
I don't understand this sentence. It read to me that I could have gotten the cheaper iPhone data plan when i moved to the 3G iPhone because I had the original iPhone at the time. I'm sure this is not correct so what am I missing here?
If I remember correctly. Since the original iPhone was not subsidized by ATT, ATT offered all it's iPhone users an upgrade offer. They could get the iPhone 3G for $399 and keep their current contract for the rest of their 2 year contract. Which was the special $60/month voice/data plan for iPhones. However, I don't think you got 3G with it. You were restricted to the orginal EDGE network. After the two year contract is up, you got to switch over to the $70/month voice/data w/3G if you want to sign a contract.
Or they let you off your old contract, with no cacellation fee, if you sign up for a new 2 year contract with a subsidized iPhone 3G at $199.