Apple seen extending exclusive iPhone deal with AT&T

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 76
    docno42docno42 Posts: 3,326member
    Well duh!



    The only people who didn't see this coming are the Verizon fanbois...
  • Reply 2 of 76
    wingswings Posts: 261member
    Those analysts should have just asked me. I've said all along that Apple won't be on Verizon until they have very good 4G coverage. CDMA is near end-of-life.



    You guys got that? Good, so shut up with your idiotic speculation and start using your brain.
  • Reply 3 of 76
    well i won't play armchair CEO here...if they extend the exclusive with AT&T, limiting their growth by staying with only one carrier and ignoring the other 150 million potential customers with the other big 3 then they must have a good reason to do it. AT&T is probably paying a super "bribe" for Apple to determine that they'd rather keep their marketshare limited...



    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.
  • Reply 4 of 76
    sirozhasirozha Posts: 589member
    It's all good. Apple, please unlock the iPhone in the US. There is no competition to AT&T in the US (especially for 3G) as long as the current iPhone GSM frequency ranges are replicated in each new iPhone release. Additionally, we are already locked into our 2-year AT&T contracts. So, what's the harm in providing the official carrier unlock with the new OS release? It's not like we can use any other provider in the US. Well, ok, we could use T-Mobile, but we would have to continue to pay AT&T for the remainder of our contracts. Additionally, why would I want to change from a not-so-good coverage to the completely horrible coverage while paying to both companies? Moreover, I would not be able to get 3G from T-Mobile. I just don't see many people leaving AT&T to take their iPhones to T-Mobile even after their AT&T contracts expire.



    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.
  • Reply 5 of 76
    b747b747 Posts: 27member
    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.
  • Reply 6 of 76
    pxtpxt Posts: 683member
    Blah blah AnalystZZZZZZzzzzzz......



    Riddle: What is functional, controlling and optional, but not commanding?





    Answer: PageUp on a Macbook keyboard.



    How is this intuitive ?
  • Reply 7 of 76
    Quote:
    Originally Posted by DocNo42 View Post


    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
  • Reply 8 of 76
    Nooooooooo!!!! Why oh why Apple? Please bail on the sleezy, lying monopolistic AT$T. Since the day I stood in line for the very first iPhone, until now, I have had nothing but trouble and network issues with my iPhone and lies from AT$T whenever I tried to get them resolved. How about "it's not our networks fault..it's your fault, it's Apple's fault, it's the iPhone's fault. it's your tree's, it's your refrigerator, or it's your microwave." 3 bars to none in those years and even Apple replacing a phone to prove it wasn't them. Nooooooooooooo!!!!!!!
  • Reply 9 of 76
    solipsismsolipsism Posts: 25,726member
    Seems like the most common situation after the iPad announcement but I'd love another carrier to come on board to get AT&T to fight more for users, get the stock price jumping, and get posters to STFU about AT&T. T-Mobile seems the obvious next fit but the unlocked iPad doesn't have the 1700Mhz band.





    Next week: an article stating that AT&T will not retain exclusivity.





    Quote:
    Originally Posted by B747 View Post


    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 . By then there will likely be rules governing exclusivity and carrier locking. I can dream, can't I?
  • Reply 10 of 76
    benroethigbenroethig Posts: 2,782member
    Quote:
    Originally Posted by DocNo42 View Post


    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.
  • Reply 11 of 76
    when my two years are up in October I'll have to get an HTC or Palm or something if the iPhone's not on Verizon. What good would an AT&T iPhone be without reception.
  • Reply 12 of 76
    paxmanpaxman Posts: 4,614member
    Quote:
    Originally Posted by solipsism View Post


    In a decade all the US carriers will be using LTE, even Sprint after they're bought out . By then there will likely be rules governing exclusivity and carrier locking. I can dream, can't I?



    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.
  • Reply 13 of 76
    bdkennedy1bdkennedy1 Posts: 1,459member
    Well, one of two things are going to happen this year for me.



    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.
  • Reply 14 of 76
    The entire world uses GSM (except some US and Japanese carriers) ... why bother with a CDMA phone??
  • Reply 15 of 76
    Shoot... I live in the Dropped-Call capital of the USA, New York City. My iPhone contract is up in August and I was planning on getting another iPhone, as long as I could use the iPhone where live. Now I'll have to rethink the iPhone. I have zero faith in AT&T. I have had so much frustation...
  • Reply 16 of 76
    Quote:
    Originally Posted by KingOfSomewhereHot View Post


    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.
  • Reply 17 of 76
    roos24roos24 Posts: 170member
    First, we'll have to see if this is true. If so, I can live with it. AT&T has been very good to Apple and I can't stand the arrogance of Verizon.



    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.
  • Reply 18 of 76
    Quote:

    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.
  • Reply 19 of 76
    quadra 610quadra 610 Posts: 6,744member
    Apple is getting into the wireless biz.



    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.
  • Reply 20 of 76
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by paxman View Post


    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.
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