Apple, regarding AT&T exclusivity—just say no

Posted by Dennis Sellers Apr 16, 2009 at 2:00am

As reported yesterday, AT&T CEO Randall Stephenson is allegedly involved in discussions with Apple to extend the carrier’s exclusive iPhone contract into 2011. I hope that doesn’t happen.

I’d love to see iPhones work with Verizon and Sprint’s CDMA-based services, though part of this is selfish—I’m a Verizon user since it offers better wireless service than AT&T in my neck of the woods. Still, choice is good, whether that choice is AT&T, Verizon, Sprint or T-Mobile.

I can understand why AT&T wants to re-up the deal. Though it beefed up its 3G network mainly to support the iPhone, it and Apple sold 4.3 iPhones in the second half of 2008. And when the iPhone OS 3.0 debuts, doubtless along with new iPhone models, I suspect sales will skyrocket again.

That’s good for Apple. However, my favorite tech company could sell more iPhones if Verizon, Sprint and T-Mobile were also carriers. More distributors would also help the iPhone achieve world domination. Well, okay, if not that, ever higher penetration of the smartphone market.

Admittedly, there are technical problems. If the iPhone is to access T-Mobile’s 3G network, Apple would have to create a new version of the device with 1700MHz AWS support. Ditto for CDMA-based services.

But the risk is worth it. As Barron’s notes: “The exclusivity had its benefits, it had many switching to ATT to use the iPhone at a time when there was absolutely no competition in the Smart phone business. The story is completely different now, the competition is out in full force and the exclusivity will only hurt Apple.”

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