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Is Apple Just That Into AT&T -- Fact Checking the Carrier Relationship

att_iphone_3g_s_hate_you_cant_leave

On the heels of a Bloomberg TV interview with Brian Marshall [YouTube link] Turley Muller of Financial Alchemist puts foot to assumptions, and figures the following:

  • AT&T likely subsidizes the iPhone to the tune of $400
  • If AT&T loses exclusivity (i.e. if Verizon gets the iPhone), the subsidy probably won't change. (Not a revelation to the rest of the world where multiple carriers hasn't changed the subsidy or pricing...)
  • iPhone users are 14% of AT&T's wireless customer base.
  • iPhone exclusivity with AT&T may terminate at the end of 2010 but only Apple and AT&T know for sure.

Disclosure, he's long on Apple, but short on Marshall, it seems. Anyone really, truly surprised by any of the above?

Footnote: 

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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There are 33 comments. Add yours.

iphoneduke says:

im pretty sure back in 07 att didnt only sign up for 3 years of exclutivity. and im sure after seeying the first year sales they extended how ever long that contract was to something alot more. never before has a phone brought this much attention and revenue to att. so now they pump more money into their network to imporove it and more money into apple to keep it on att.

appleking says:

there is no way in hell verizon is getting the iphone if apple jus took shoots at verizon on behalf of at&t. Now verizon is goin at sprint about being dependable 3g network. Fuck verizon.

Roamingrican says:

When did apple take shots at Verizon? As far as I knew those were AT&T ads and apple was staying out of it ( I love their smug confidence) but if the sleeping giant has awoke I'd like a YouTube link like NOW

d.allen says:

@Roamingrican..
Scroll down a couple posts here on tipb.. Apple has also made commercials.. and for the first time ever, had AT&Ts logo at the end of the clip.. As for this though.. wow, this guy is a genius.. how did he ever come to all this wonderful speculation all on his own..?

Use google rican says:

Just google it, TiPb keeps deleting the underscores from the link, so it prob won't work.

brownat89 says:

Even if verizon did get the iPhone, if the esclusivity end at the end of 2010 they wouldn't release an iPhone esclusive to verizon until June 2011 beacause they aren't going to make two separate cycles for the iPhone releases. I could see it going more toward tmobile so the phone itself doesn't have to be changed, it would just need a different sim card.

fastlane says:

@d.allen

Apple has also made commercials.. and for the first time ever, had AT&Ts logo at the end of the clip.

:shock: Almost all iPhone commercial have the AT&T logo at the end. The last one I remember not having it was the "Break In" commercial announcing the 3GS.

Jfelipe83 says:

Verizon sucks and if they ever have the iPhone I'll bet you anything that it would be the same cuz verizon like to change things around for they on good. That is why apple end up going to AT&T. Because verizon wanted to use their Vcast shit, etc. And another thing verizon would pay apple the money that AT&T pays them. That is for sure.
I was a verizon customer an I change to AT&T to be able to ge the iPhone and belece me I'm happy with AT&T. The service is good. Yeh something you do get drop calls but it's not a big deal for me cuz most of the time I text

T-Dog says:

5 Year Deal between Apple and iPhone...that puts it into 2012.http://www.wired.com/cultofmac/2007/05/apples5yearde/

d.allen says:

@fastlane.. sorry, I was just going off of what someone said in the apple commercial post, I don't watch the tube often, and never see the commercials.. I should have known better then to go by hear say though.. thanks.

T-Dog says:

Google: Apple’s 5-year Deal With AT&T is Annoying,
Strategic Wired and Cult of Mac have an article on this.

WatersWest says:

@ Alex ... It wouldn't simply be a matter of swapping sim cards in order to use the iPhone on T-mobile. T-mobile uses a different 3G technology than does ATT. Therefore, unless users wanted to be stuck on Edge, Apple would have to make a new version of the phone with a different 3G radio in it, just like they would have to do to bring it to Verizon.

Josel says:

Granting iphone finally reaches the big red turtle (VZW), it's going to be worse. For a data-guzzling device, you need the fastest speed you can get out of a network, at least handle voice and data (apps or browser) simultaneously. I've had my share of frustration everyday while I was still with the big red turtle in San Diego.
Sure I can have drop calls, lucky I never did, or spotty coverage. But I will not compromise on speed anymore. AT&T's 3G is like waking up from a long nightmare of timed-out browsing, cached google map, non-global phone, and geriatric BB OS.

BigMeat says:

AT&T is the greatest... If you don't like it shut the fuck up and unlock you iPhone and go to tmobile or get that shitty droid

AgBand says:

@ jfelipe83 (post #10): WTF? That was some of the most incoherent typing I have ever read. I can't say whether I agree with your post or not, because I have no idea what he heck you were even trying to say.

Louis Wheeler says:

The technology is unready for Apple to go anywhere.
Verizon is built on CDMA technologies and AT&T and Apple are on GSM. It will be three to five years before there will be chips to handle all techs and frequencies and the ISP's are built up to provide 4G services.
So, anyone expecting change is out of luck for a while.

iDavey says:

@Jfelipe83
I thought that all over the interwebs and such...it has been stated that Verizon is the one that turned down Apple. Not vice versa. It may have been a dumb decision, but they did indeed turn down Apple.
With Verizon and Apple though, if the iPhone will be exclusive for almost another 2yrs. Wouldn't LTE be out and about? And won't LTE support simultaneous data/voice the same as GSM 3G?
AT&T's commercials are directly attacking Verizon. Nothing else. Same as Verizon's are attacking AT&T and nothing else.
All Apple's commercials are attacking is the CDMA network and the limitations of its 3G.
That said...the possibility of Apple and Verizon is still there. Neither Apple nor Verizon has attacked each other. So there really is no defining factor showing that it won't come to Verizon after exclusivity. If it does, it could possibly take time to make it happen, but it's still possible.

desjones4ever says:

The part I'm not understanding is that ATT and Verizon will nth be up and running with the LTE. they will both be running on the same networks. They are really cousins. Both coming from MaBell. Something crazy with both companies will happen in when the exclusivity ends.

frog says:

CDMA is end of life, I can't see Apple releasing one for Verizon. Maybe when LTE comes along.

commentor says:

While apple didn't attack verizon directly, I don't think apple will be too inclined to go with Verizon after the Droid "iDon't" commertials.

Samson says:

I have heard, and I believe that T-Mobile has positioned themselves very well. They are a better option than verizon. Due to their network technologies, and their great customer service. Apple has seen the results of opening up to multi carriers in other countries. I cant beleive that they wouldn't do it here.

SpiceRak2 says:

I just don't see how T-Mobile or Sprint can handle the iPhone. Coverage will be an issue if things are as they are now. Apple does not want to deal with poor performance on a multi-tiered US scale. AT&T dropped calls and service loss are damaging enough. As for Verizon, it really feels like a bridge is smoldering (if not burned) between Apple and them.

fassy says:

It does not matter if Verizon attacked Apple, or if Apple attacked Verizon. They are not petulant schoolkids who refuse to play with the kids who teased them at recess yesterday. They are large, successful companies looking out for themselves and their shareholders. If they can make more money working together, they will. If either one finds it more profitable to stay separate, they will remain at odds.
While they are apart, they will preen, pump themselves up, and talk down about the other's weaknesses right up to the point they announce a partnership, at which point all those weaknesses will vanish, never to be spoken of again. There is nothing personal or profound here, just large businesses conducting their business.

Pimp Lucious says:

Some of you read way too much into a few commercials. At the end of the day business is business and the dollar trumps all slights, percieved or real.

jbrandonf says:

Fassy's got it. Businesses don't have hurt feelings when it comes to making more money.

Limegrntaln says:

Business don't have hurt feelings? I guess you don't know much about Steve Jobs.

Zachary says:

I honestly think they will be keeping the exclusivity to AT&T for a lot longer than 2010.. Think about all the money they are making together and to have an iPhone on AT&T most of us pay a minimum of 105 a month, if lets say T-Mobile got a hold of the iPhone we could all switch to them and only pay the $60... I can very well bet you AT&T is paying Apple very well to keep the phone with them.

iphoneduke says:

like i said before lol, regardless of what the first iphone-att deal was, i GUARANTEE u that att extended it to a much longer time. they arent dumb. the iphone is att's star athlete. the iphone is kobe and att is LA. and kobes not going anywhere anytime soon lol

Dean wys says:

Please apple get these things onto multiple carriers ! It’s a move that would benefit everyone actually including AT&T as well since it would relieve their already strained and stained network. Who knows maybe AT&T will stop dumping money on luke Wilson and put it into fixn the dropped NYC calls.

Monroe Bardach says:

I'll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this gives you enough info to make an informed decision of the Zune vs players other than the iPod line as well.)Have you tried the ipad? you can get one free at FreshGiftCard.com