AT&T iPhone exclusivity to last through 2012, confirmed in court

Posted by | 05/10/2010 | 6 Comments

Finally there is a faint glimmer of hope that all the chatter of a Verizon iPhone will end. Because a CDMA iPhone has been spotted? No, because Apple has argued in court that their exclusive deal  with AT&T was for five years.

Engadget has been following the arguments in a class action suit against Apple regarding exclusivity and dug up these tidbits.

“The duration of the exclusive Apple-[AT&T] agreement was not ‘secret’ either. The [plaintiff] quotes a May 21, 2007 USA Today article – published over a month before the iPhone’s release – stating, “AT&T has exclusive U.S. distribution rights for five years-an eternity in the go-go cellphone world.”
…
“[T]here was widespread disclosure of [AT&T's] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years… Moreover, it is sheer speculation – and illogical – that failing to disclose the five-year exclusivity term would produce monopoly power…”

There you go people. Five year deal signed in 2007 means there are two more years of iPhone exclusivity for AT&T. So if you’ve been holding out for the mythic Verizon iPhone, your wait continues. You can either have a great or even better phone on Verizon, or you can switch to AT&T for the iPhone. Unfortunately for Verizon, a lot of people are opting to switch.

Just to be clear, I’m not happy the deal is officially set to last through 2012; I’m just happy we can stop giving credibility to those rumors of Verizon getting the iPhone. Those rumors never made sense to me, primarily because they were never backed by anything. If they served any purpose, it was to keep Verizon’s stock price up and keep customers from leaving. I can only hope this revelation silences that noise for the next year (but I doubt it).

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Category: Mobile

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My name is Mark Sumimoto; I am Sumocat. I dabble in all areas of mobile computing, but my focus is Windows-based Tablet PCs and pen input. They’ve been part of my arsenal since 2004, and I’m proud to have pioneered the field of ink blogging, earning a spot as a Microsoft MVP for Touch and Tablets in the process. My current tools include a Fujitsu Lifebook T900, TEGA v2, and iPhone 4. Email me: sumocat [at] notebooks.com
  • Kupe

    Oops! Someone forgot to read the entire article. The “original” agreement was for 5 years, but much speculation remains about the subsequent agreements (iPhone 3G pricing model change, iPad 3G network service) and how that probably changed the original agreement. Back to the speculation drawing board. ;-)

  • http://www.segal.org/tablet Mickey Segal

    If Apple sticks to the exclusivity it could suffer in market share. But Apple could also sell iPhones without contracts, and non-AT&T carriers could offer pricing on service contracts that makes up for the difference.

    This approach could solve Apple’s problem and kill the subsidy distortions in the marketplace.

  • AP

    “Unfortunately for Verizon, a lot of people are opting to switch” Are you saying people are dumping verizon for AT&T. I seriously doubt that considering AT&T’s lousy wireless service.

    Any link to back this.

    Recent NPD study shows sales of android based phones have already overtaken iphones in short time android is been in existence. It will interesting to see how the gap widens once the sprint EVO is launched this summer. Ironic that Steve Jobs himself said during his war of words with Adobe that Open systems always win..

  • http://martymcpadden.com Marty McPadden

    AT&T works great for me so the length of exclusivity is not important to me. Even better if it had anything to do with the iPad 3G no contact access deal. $30 a month for true unlimited data on the iPad suits me just fine.

  • http://www.segal.org/tablet Mickey Segal

    http://www.wired.com/gadgetlab/2010/05/apple-att-verizon/ adds that “Apple is barred for that time from developing a version of the iPhone for CDMA wireless networks” so breaking free of AT&T is not so simple. But “in March … The Wall Street Journal, which has a solid track record for Apple rumors, was tipped about a CDMA-compatible iPhone scheduled for mass production in September. CDMA is the standard used by Verizon.”

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