AT&T And Apple Extend Exclusive Contract - iPhone 4G Included

According to bloggers and analysts at Barclays Capital, Apple will most likely choose to extend the iPhone exclusivity agreement with AT&T for the coming fourth generation iPhone.

Analyst Vijay Jayant based this prediction upon Apple’s recent partnership with AT&T to offer exclusive iPad wireless service. This would suggest that Apple is confident in its relationship with AT&T and is content on continuing its partnership with the wireless provider. Recently, the tone that Apple has been using with respect to AT&T has been increasingly positive over the past few months, which would suggest their relationship hasn’t become sour.

“(The) launch of Apple’s iPad on AT&T’s network is a vote of confidence in AT&T’s network by the equipment maker,” Jayant wrote. “While iPad sales are unlikely to materially impact wireless revenues in the short term, selecting AT&T to launch its second major communications product reflects Apple’s bias for the global GSM platform and the prospects of AT&T’s network capability. Moreover, it could suggest the iPhone exclusivity may continue, at least through the end of 2010.”

Some people are hoping Apple would jump ship with AT&T and move to Verizon to take advantage of their evolving 4G LTE wireless network. This, however, isn’t a feasible idea because Verizon’s LTE network won’t be ready for at least another year and nationwide coverage is still a long time coming. Until then, there’s really no reason to dissolve a hugely successful relationship with AT&T. Apple currently gets a huge cut of a user’s monthly cell bill through AT&T and they’re unlikely to get anywhere near the royalty with any other carrier, even Verizon.

Even if they did switch to Verizon this summer when the next-generation iPhone is unveiled, Apple would have to create a completely different iPhone to work with Verizon’s antiquated CDMA network (AT&T uses GSM). This would create confusion for the user and multiple versions of the same device and Apple won’t do that because they (Steve Jobs) don’t like non-uniformity and complexities. They like their products simple and a no-brainer for users.  Lest we forget the other huge downside to CDMA: you cannot talk and send/receive data at the same time, which Apple wouldn’t tolerate.

Credit Suisse, another analyst firm that also agrees with the above assessment, and Barclays Capital both also believe that AT&T will eventually lose iPhone exclusivity, but not in 2010 and  2011 at the earliest.

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