Apple to Extend AT&T’s iPhone Exclusivity Deal?
AT&T’s iPhone exclusivity deal with Apple is set to expire as early as next year, but that doesn’t necessarily mean it won’t be renewed–despite complaints about the carrier’s network. That’s the word from iSuppli, which predicts Apple will extend its agreement with AT&T because it has no reason not to.
“Speculation is rife that Apple will end its exclusive U.S. iPhone service deal with AT&T when the current contract expires in June 2010 and begin to offer phones that work with the Verizon network,” iSuppli analyst Francis Sideco said in a research note today. “However, iSuppli doesn’t believe this will be the case. The main reason Apple is likely to stick with AT&T beyond 2010 is the relatively wide usage and growth expected for the HSPA air standard used by the carrier for 3G data.”
As Sideco explains, “Cumulative global subscribers of HSPA wireless services, consisting of High-Speed Downlink Packet Access (HSDPA) and High-Speed Uplink Packet Access (HSUPA), are set to rise to 1.4 billion in 2012, up from 269.1 million in 2009. In contrast, cumulative subscribers for the EVDO standard used by Verizon will amount to 304.6 million in 2013, up from 145.2 million in 2009.”
A point worth noting, though it’s hard to imagine that Apple (AAPL) doesn’t harbor some resentment toward AT&T (T), which has undermined its carefully crafted iPhone experience. And if that’s the case, wouldn’t it make more sense for the company to extend its deal with AT&T, but not as an exclusive? That would allow Apple to hammer out a second deal with Verizon (VZ), which, according to some analysts, would more than double U.S. iPhone sales in the near term.
As Bernstein Research analyst Toni Sacconaghi noted this summer, “Verizon’s postpaid subscriber base is not only larger than AT&T’s, but more importantly, is untapped whereas we estimate more than 10 percent of AT&T’s postpaid users already have an iPhone.”