AT&T Confronts The Unthinkable: Life Without An iPhone Exclusive


This fall is looming as AT&T's Waterloo, Armageddon, pick your end-of-the-world metaphor, with a Verizon iPhone reportedly arriving later this year that would end AT&T's exclusive deal for the Apple device going back to 2007.

The iPhone, of course, has been's the carrier's growth engine, driving new contract wireless sign-ups and giving it the lead in U.S. smartphone market share. In the fourth quarter of 2009 alone, AT&T reported 3.1 million iPhone activations, with more than one-third of those coming on as new subscribers.

So what's AT&T to do without a monopoly on its high-tech meal ticket? On the upside, sharing the iPhone to Verizon or any other operator would relieve AT&T of some of the data traffic that's overwhelmed its network and led to well-documented complaints by iPhone customers in New York and San Francisco.

What's more, handing the data-gulping Apple device to Verizon will finally put the carrier's vaunted network coverage to the test. Can it handle the iPhone's network demands without triggering a similar backlash from subscribers dealing with dropped calls and balky Web access? If not, AT&T could then unleash a new round of attack ads highlighting the problems and trying to puncture Verizon's reputation for reliability. Hopefully, no one would notice the hypocrisy.

Beyond that, AT&T still has its arrangement to be the U.S. 3G network provider for the iPad to fall back on (for customers that don't choose the Wi-Fi-only version of the Apple tablet). AT&T CEO Randall Stephenson has said he doesn't expect the iPad to bring in many new subscriptions because most iPad users will opt to use Wi-Fi instead.

But if the added network demand from the iPad proves more of a strain than expected, any lessening of iPhone traffic because of Verizon also getting the device would clear up more bandwidth for the iPad -- sure to be a data hog in its own right with a larger screen for game-playing and watching video.

Any new iPad subscriptions would also help make up for a decline in new iPhone customers. Analyst estimates for 2010 sales of the iPad range from nearly 3 million up to 10 million. So it's time for AT&T to stop worrying and learn to love the prospect of a Verizon iPhone.

1 comment about "AT&T Confronts The Unthinkable: Life Without An iPhone Exclusive".
Check to receive email when comments are posted.
  1. Matthew Snyder from ADObjects Inc, March 30, 2010 at 4:16 p.m.

    Yes- this was an inevitable reality for AT&T. Exclusivity is hard to maintain. Now that the honeymoon is over, what is the real business model for AT&T as they did not agree on a piece of the action of the App's store? Even if they build up there own App Store, the likes of platforms storefronts such as Google Marketplace and iTunes has definitely gained the mind share of users. As they supported and launched iPhone, it is going to be interesting how they move from #3 forward.... will they demand a tariff from the App stores moving forward?

Next story loading loading..