Analyst: AT&T Will Lose Apple iPhone Exclusivity In 2010


The research note by Piper Jaffray analyst Gene Munster indicates that Apple will branch beyond AT&T come summer 2010, according to a report from Apple watchers AppleInsider.

"For various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model," Munster said, according to AppleInsider. "In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements."

Essentially, Munster is illustrating that Apple would enjoy stronger sales and deeper penetration by ditching its AT&T exclusivity in favor of a multicarrier model in the U.S.

Munster isn't the only one thinking that next year could see Apple ditch its iPhone exclusivity with AT&T next year. There have been several rumors indicating that Apple is building an iPhone that will operate on Verizon Wireless for a 2010 launch, though none have been confirmed.

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For its part, however, AT&T is clinging to Apple, hoping to renew its iPhone exclusivity through 2011, which would mean four years of AT&T-only iPhones in the U.S. AT&T has retained its iPhone exclusivity in the U.S. since the launch of the first-generation Apple iPhone in 2007 despite user complaints over AT&T's network performance and the cost of smartphone data plans.

The iPhone has been a major revenue driver for AT&T, and if it were available on more carrier networks, AT&T would be the big loser. In its second quarter, AT&T added 1.4 million net subscribers and activated more than 2.4 million Apple iPhone smartphones. In addition, more than a third of AT&T's newly signed iPhone users were new to AT&T as well. Losing iPhone exclusivity would hurt AT&T, which saw its best sales day ever in its retail and online stores on the June 19 launch of the Apple iPhone 3G S.

Munster's research note also comes as the Federal Communications Commission (FCC) investigates exclusive agreements between carriers and smartphone makers and how that impacts the competitive landscape.