AT&T’s exclusive contract to sell the iPhone was largely expected to expire on June 29, 2010. That being the case, many were hoping that a CDMA version of the device capable of running on Verizon, largely considered the most reliable and robust cellular network in the country, was just around the corner. Unfortunately, now comes word that customers who either refuse or are unable to migrate over to AT&T will have to wait just a little bit longer to get their hands on the iPhone – in early 2011 to be exact.
And, surprise surprise, this turnabout seems to have everything to do with the recently released iPad 3G.
When Steve Jobs first introduced the iPad, people were shocked, or at the very least disappointed, that the 3G data plan was being run through AT&T’s network. After all, despite pouring hundreds of millions of dollars into beefing up their 3G infrastructure, customer complaints about AT&T still abounded. In any event, people were somewhat relieved to find out that the data plans offered by AT&T were completely reasonable, affordable, and downright attractive. Under a pay as you go set up, users can pay AT&T $14.99/month for 250 MB a month, or $30 a month for unlimited bandwidth. Not too shabby, and in fact, that pricing is about 50% cheaper that AT&T’s normal wireless data plans.
Now it turns out that that affordable pricing scheme may have been the result of maneuvering on the part of AT&T in an effort to land the iPad and extend their exclusive right to sell the iPhone for 6 more months. According to BroadPoint AmTech analyst Brian Marshall, AT&T was negotiating hard for the iPad while Apple was naturally intent on making their new device as affordable as possible, both in terms of the base price and the data plan for the 3G model. Remember, pundits expected Apple’s mythical tablet to start anywhere from $800 to $999. Apple, though, blew away all expectations with its $499 price point for the entry wi-fi only model.
In any event, during the course of negotiations, AT&T agreed to offer Apple a deal on bandwidth rates for the iPad 3G in exchange for a 6 month extension on their expiring iPhone contract. A win for both sides, really. The iPad 3G gets a strong push out of the gate while AT&T gets to keep its coveted spot as the exclusive iPhone provider here in the US.
But is iPhone exclusivity really so important that AT&T would slash its typical wireless data rates in half? In a word, yes.
Remember, the number one priority for wireless carriers is to attract new customers, and the iPhone’s success in that regard is unparalleled. In the third quarter of 2009, for example, 64% of all new AT&T subscribers were iPhone users, attracting 1.28 million new users to Ma Bell. And just a few weeks ago, AT&T released their earnings for the Q1 of 2010 and reported that over 1/3 of their 2.7 million iPhone activations during the quarter were to customers new to AT&T.
All that said, Marshall now anticipates that the iPhone won’t hit Verizon until 2011, a sentiment echoed by other analysts as well.
Update: And in case you need more of a reason to be skeptical of so-called analysts, Marshall e-mailed Appleinsider today and said that his comments on AT&T’s iPhone contract were purely speculative. Still, Marshall’s assertion that the iPhone won’t be hitting Verizon this summer remains on point. Remember that the prototype iPhone Gizmodo purchased and plastered pictures of on the web came with a micro-sim slot. So unless Apple is quietly testing a CDMA phone somewhere, the iPhone 4G (which may hit stores as soon as early June) appears to be an AT&T exclusive.