The iPhone: Key To AT&T's Future

Jul 16 2009, 3:00pm CDT | by Robert Evans

Signing an exclusivity agreement with Apple for the iPhone will go down in corporate history as one of the wised decisions AT&T ever made. The millions and millions of iPhone sales have kept the carrier afloat through recessions and market contraction, and some estimates say that nearly 1/3rd of new AT&T members come for the iPhone. Unfortunately (for AT&T at least) their exclusivity agreement with Apple ends next year.

That means the iPhone will be able to open up on other carriers, which is great news for Apple and their legion of fans. AT&T, however, won't come out of the deal looking so pretty. Industry analysts are predicting sharp drops for the carrier's stock, as well as a substantial loss in revenue when their contract with Apple ends. It's no wonder their CEO is apparently in talks with Apple to extend the arrangement.

After all the problems Apple's had with AT&T in the recent past, I can't see that happening. The exclusivity agreement is an anchor weighing the iPhone down. AT&T crippled the iPhone's ability to tether, message, browse, and even launch properly. The analysts also predict that Apple will sign an agreement with Verizon, which is why they recommend buying Verizon stock and dumping AT&T stock.

It might not be Verizon that AT&T has to worry about, though. VZW just made the (rather silly) decision to open their own app market, and ban all other manufacturers from installing their own app stores on phones sold through Verizon. There is no way in hell that Apple will ever agree to something like that, which means that they're either going to have to cut a special deal or find another carrier for the iPhone. Maybe T-Mobile?

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Robert Evans
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.