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AT&T Extends iPhone Exclusivity?AT&T Extends iPhone Exclusivity?
If you were waiting for the iPhone to be available on a carrier besides AT&T -- <a href="http://www.information.com/news/personal_tech/iphone/showArticle.jhtml?articleID=209100524">officially</a>, that is -- be prepared to wait a bit longer. According to a <a href="http://www.usatoday.com/tech/wireless/phones/2008-07-31-att-iphone-stephenson-apple_N.htm">report</a> in <i>USA Today</i>, Apple's exclusive agreement has been extended a year.
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If you were waiting for the iPhone to be available on a carrier besides AT&T -- officially, that is -- be prepared to wait a bit longer. According to a report in USA Today, Apple's exclusive agreement has been extended a year.If you recall, AT&T had an agreement with Apple where it would be the exclusive carrier of the company's so-called Jesus phone. As part of this sweetheart deal, Apple also got a monthly cut from iPhone customers.
This is unusual in the mobile space, and this revenue-sharing demand is thought to be the reason why Verizon Wireless turned down the chance to be the sole iPhone carrier.
AT&T got tired of giving Apple a monthly chunk, and moved to the standard agreement of buying the phones up front, and subsidizing them to customers. This allowed the carrier to offer the phone for a potentially cheaper price, as well as give Apple a boatload of money up-front.
Buried in a long USA Today interview with AT&T's CEO Randall Stephenson is this interesting tidbit:
In exchange for its payout, AT&T got a year extension, into 2010, on its exclusive distribution deal with Apple, people familiar with the matter say. Sources asked to not be named because the terms are confidential.
Under the original iPhone contract, Apple had the right to offer the device to other carriers beginning in 2009. If Apple exercised that clause, AT&T would have lost one of its biggest points of leverage with customers -- exclusive access to the iPhone.
Reps from AT&T gave me the standard, "We do not disclose terms of our agreement with Apple." But, it's a safe bet that they'd be bending over backward to keep this thing exclusively on their network, especially since the iPhone 3G sold a million units in the launch weekend.
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