Analyst: End Of AT&T IPhone Exclusivity Means Expensive IPhones

Posted: Oct 28 2009, 11:12am CDT | by , Updated: Aug 11 2010, 5:07pm CDT, in News | Mobile Phones

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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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<a href="/latest_stories/all/all/5" rel="author">Robert Evans</a>
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.
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