As Apple gets ready to launch their next generation iPhone in June this year, speculations over a possible end to Apple's network exclusivity with AT&T in US have been on the rise.
We have seen a few rumors in the past that indicate a possible CDMA iPhone to be in the works, which is expected to be offered by Verizon.
However, a recent report on Engadget notes that these rumors may have to be taken with guarded skepticism. This is because the original AT&T's iPhone exclusivity seems to have been signed for a far longer period than initially assumed. Engadget points out to an ongoing California class-action lawsuit where Apple is believed to have confirmed the existence of a five year exclusivity agreement with AT&T.
In the class-action suit, filed back in 2007, it was alleged that Apple and AT&T had offered their customers a two-year contract despite the fact that the exclusivity deal was actually for five years. The plaintiffs argued that this effectively meant that customers would have to remain locked to AT&T for an additional three years despite ending their contractual obligations. They had further pointed out that this was an illegal exertion of monopoly over the iPhone service.
In its defense, Apple is reported to have responded:
"The duration of the exclusive Apple-[AT&T] agreement was not 'secret' either. The [plaintiff] quotes a May 21, 2007 USA Today article – published over a month before the iPhone's release – stating, "AT&T has exclusive U.S. distribution rights for five years-an eternity in the go-go cellphone world."
"[T]here was widespread disclosure of [AT&T's] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years... Moreover, it is sheer speculation – and illogical – that failing to disclose the five-year exclusivity term would produce monopoly power..."
As Engadget points out, a five year exclusivity agreement does not necessarily rule out the launch of a CDMA iPhone this year since there has been a lot of change in the market realities since then. The extremely successful launch of the iPhone has resulted in congesting AT&T's network due to the 5000% increase in data traffic in the last three years. AT&T is yet to allow iPhone tethering, a feature that was introduced by Apple in iPhone OS 3.0 almost a year back.
We seem to have come to a point where AT&T doesn't seem to be able to independently cater to the huge data usage requirements from iPhone users without compromising on user experience, which is expected to increase exponentially with the launch of the next generation iPhone as it is likely to include a front facing camera for video chat feature. In fact, according to a report published last week, AT&T's customers had reported three times more dropped calls compared to Verizon.
Given these changes in the market since the Apple-AT&T agreement was signed, Apple might be within its rights to modify the agreement with AT&T to let one or more carriers offer the iPhone to US customers. What do you think?
[via Engadget]
Well it happened in the UK, O2 had it exclusive for around 2 or 3 years and now almost all major networks offer the iPhone.
hope att gets the phone still verison is crap to me but like some of there phones thou
Oh sure, when the world ends..
haha , well hey am fine with AT&T until they do something bad to piss me off ,since am getting iphone 4G here goes another 2 years to AT&T anyhow ,i prefer sim on cdma crap from verizon anyhow..
this sucks
Apple and AT&T are bound together in holy matrimony until the Mayan calendar ends and takes the world with it. Some are watching this game of legal Pong with drooling fascination, waiting to see if AT&T will have its ass handed to it in court. I am too busy watching my iPhone and waiting for a signal. Call me when Apple comes to its senses. Or when the world is ending. Whichever comes first.
do u guys really believe the world's gonna end?
Kiss your Asses Good Bye if you really beleive this.
Yes, Kid, the world will end. And so will Apple's exclusivity with AT&T.
I want to believe this however…I have to see whether it can really happen or not.
Drink up.
I hope the exclusivity ends. I have AT&T and will stay with them; but offering it to other carriers would reduce the congestion for everyone. I think that all parties would win. However I see that AT&T is more concerned with the money from iPhone sales (with exclusivity) over the customer satisfaction (iPhone spread across other carriers), so I don't really expect it to happen soon.
I keep reading about this nightmare situation with AT&T with calls being dropped every ten seconds and no 3G. Which kept me from getting an Iphone for almost two years. I decided to take a leap and get one anyway. Surprise, Surprise, I've had the phone for over three months, use it constantly and NO DROPPED CALLS not a one! 3G is available all the time and fast. Guess I'm in a good service area for AT&T. I read an article yesterday where the Droid phones are out selling Iphones at this point, all of my friends that left the Iphone for a Droid phone have gone back to the Iphone, some paying some substantial fees to do so, wonder if this fact was in their equation.
I don't hve many dropped calls but then again who makes phone calls anymore I rarely call when I can text … I forget that the iPhone is acutally a phone also haha.. And AT&T does have the faster network so I'm happy
Oh and one more thing it's funny how verizon came out with the Droid and countless of ads going against iPhone and now they wanna jump in the bandwagon… They don't deserve it