Analyst: End Of AT&T iPhone Exclusivity Means Expensive iPhones

Oct 28 2009, 11:12am CDT | by , in News | Mobile Phones

Analyst: End Of AT&T iPhone Exclusivity Means Expensive iPhones
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After more than three years together, it's time for Apple and AT&T's exclusive relationship to end. While the arrangement still works out well for AT&T, it's only holding Apple and the iPhone back. That's why analyst Brian Marshall's prediction of an AT&T/Apple break-up isn't being viewed as a particularly bold one.

What makes his prediction (via AppleInsider) interesting is that he looks at an angle that most of us have overlooked. Tech bloggers have been writing about the likelihood of an end to exclusivity for a while, but you seldom hear anyone mention what that will do to the $450 subsidy AT&T pays for each iPhone.

Costs for the iPhone are as low as they are because AT&T eats the bulk of them. If Verizon picks the phone up, neither carrier is going to offer Apple a subsidy that large. This means that we're about to see a substantial boost in iPhone costs, to the tune of $300+ per phone. That could have a negative impact on Apple's bottom line.

Of course, anything is still possible at this point. VZW and AT&T could both agree to shell out $450 subsidies, or Apple could take care of part of the cost themselves. We won't know for certain until we hear the iPhone being announced for a new network.

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