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AT&T Looks To Extend iPhone Exclusivity

Company profits nicely from phone's massive popularity

By Mark Huffman
ConsumerAffairs.com

April 16, 2009

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It's the elephant in the room that no one's talking about. Will AT&T be the exclusive network for Apple's iPhone after next year?

The question is relevant to consumers considering an iPhone purchase because, to get one, you have to sign a two year AT&T contract. But as it now stands, AT&T exclusive rights to the iPhone is reportedly set to expire in 2010.

Apple isn't saying much on the matter, telling the Wall Street Journal this week that "we have a great relationship with AT&T." The question consumers want to know, though, is will they have a great relationship after next year?

The Journal article raised the issue as it profiled Randall Stephenson, the 48-year old CEO of AT&T. Stephenson took the company's reins right after it locked up the iPhone contract and has ridden on its success.

At about the same time the company changed its name from Cingular to AT&T, and the iPhone has helped the company reposition its brand. It's also been pretty good for sales. AT&T says it added 4.3 million new customers in the second half of last year and about 40 percent of them were iPhone users.

Technology Web sites were buzzing over the Journal article this week, with AppleInsider noting that Apple might have some technology-related reasons to stick with AT&T. Adapting the iPhone to work on other networks, it says, would require several modifications to the iPhone.

For all the millions of consumers who love their iPhones, there are a few who regret being seduced by the sexy, but notoriously delicate device. David, a self-described 60-year old who was happily using a pre-paid GoPhone recently bought an iPhone, a decision he now describes as a mistake.

"The phone lasted about two months," he told ConsumerAffairs.com. "I plugged it in to charge before going to bed and the next morning it would not turn on. I went back to the AT&T store and they examined the phone and said it was defective, I was told to take it to the Apple Store down the street where they would exchange it for me."

It turns out it wasn't that easy. David said he was told at the Apple Store that there was water damage and that he was responsible. He said his options were to buy a new phone at full price, $400, or buy an ordinary phone.

"I am still stuck with the two year contract and wound up with another $90.00 flip phone, little different than my original GoPhone," he said.

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