What Will AT&T Do When It Loses iPhone Exclusivity? What Can it Do?

Discussing AT&T’s latest quarterly results on a conference call this morning, CFO Richard Lindner casually mentioned that the company has in its pipeline some “new products and product refreshes we’re excited about.”

He didn’t name any of them, but it’s a safe bet that at least one of the devices to which he referred is Apple’s next-generation iPhone, perhaps the last for which AT&T will have an exclusive.

As much as the debut of that device bodes well for the AT&T (T), the carrier’s dependency on it as a profit driver is becoming a worrisome vulnerability.

Consider this: In its first quarter, AT&T activated 2.7 million Apple iPhones. A third of those, about 891,000, were purchased by new subscribers. Which means, as Bernstein Research analyst Craig Moffett observed today, that the iPhone drove about 174 percent of AT&T’s post-paid net additions (the company had about 512,000 post-paid net adds).

That’s an astonishing percentage. But what would AT&T’s post-paid numbers look like if the company loses iPhone exclusivity and Verizon (VZ) begins selling the device, as some believe it soon might?

My guess: They would be quite a bit smaller. And that’s the concern some analysts are voicing today. As Moffett wrote in a note to clients this morning, “The question of what AT&T will do if and when they lose iPhone exclusivity is hard to escape.” Indeed. By some estimates nearly a third of AT&T’s post-paid customers are sticking with the company primarily because of iPhone exclusivity.

But ultimately, what can AT&T do? Not much, unless it manages to score a similar exclusivity deal on another device that rivals the iPhone in popularity. Other than that? Gird itself for the inevitable blow, I suppose. Continue to improve its network, do its best to hold on to the iPhone owners it has and continue signing up new ones.

The truth is that AT&T has known all along that its exclusive relationship with Apple (AAPL) would change someday and has undoubtedly already factored this into its plans.

As Linder told Reuters today, “…at some point [Apple] will, as they have in other countries, make the decision to broaden [iPhone] distribution and move to a non-exclusive arrangement. When that occurs at some point, I fully expect we’ll continue to be a good partner with them, and continue to carry a full range of Apple devices.”